On Sunday, December 27, 2020, President Trump signed legislation that provides government funding and a long-anticipated coronavirus relief package (the “Law”). The broad bill contains a number of key provisions that will impact employment in the public and private sector in 2021. Of particular importance to employers is that:
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The bill does not extend the mandates of the Emergency Medical and Family Leave Expansion Act (“EFMLEA”) or the Emergency Paid Medical Leave Act (“EPSLA”) enacted under the Family Coronavirus Response Law (“ FFCRA ”).
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The bill allows employers tax credits for “FFCRA-like” paid leave benefits paid to employees until March 31, 202
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The bill does not provide economic incentives for public employers to continue with FFCRA paid leave benefits.
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The bill extends the previously enacted CARES Act and provides for continued federal assistance for unemployed workers with additional weekly benefit payments of $ 300 and an extension of the maximum benefit period.
The FFCRA license becomes optional after December 31, 2020
The FFCRA has granted up to 80 hours of paid sick and family leave under the EPSLA, along with up to 10 weeks of partially paid family and medical leave under the EFMLEA for eligible employees who were unable to work due to certain COVID-related reasons -19. For private employers, the requirement to provide these paid FFCRA leave has been offset by dollar-for-dollar tax credits for salaries paid to employees on paid leave. These FFCRA provisions are scheduled to expire on December 31, 2020 and the bill does not contain an extension of these provisions.
However, the bill allows private employers the opportunity to claim dollar-for-dollar tax credits on salaries paid to employees who are on leave consistent with the existing FFCRA structure between January 1 and March 31, 2021 under the employer’s paid leave policy. In effect, the FFCRA’s paid leave clauses will be optional after December 31, 2020. Tax credits are available until March 31, 2021, as long as the employer’s paid leave is available, as “it would be required to be paid if [the FFCRA] have been applied. “
If you continue to offer paid vacations under the FFCRA in 2021 it is something that employers need to evaluate and plan for before the end of the year. Each employer has their own concerns and a multitude of factors to be considered when making a decision. For example, private employers who have staffing problems or are in financial difficulty may consider the right to future tax credits of little value to continue to provide paid vacation under the FFCRA structure. Most public sector employers are likely to come to a similar conclusion regarding the economy, as they are ineligible to claim tax credits under the FFCRA. On the other hand, private employers who decide to continue offering paid leave benefits now based on receipt of tax credits for the eligible amounts paid may determine that the positive effect on employee morale and retention justifies the decision to continue offering paid holidays due to illness and family.
Employers subject to the FFCRA will need to evaluate their options for 2021 and decide on an approach that best suits their individual circumstances. Regardless of the decision reached, employers will need to review, update or eliminate existing FFCRA paid leave policies in light of the mandatory FFCRA components that expire on December 31, 2020. It will also be important for employers to notify employees in advance of any changes in paid leave policies, including any impact that such changes will have on your rights and opportunities for leave under those policies.
Improved unemployment benefits
In view of the historical levels of unemployment and the federal unemployment emergency programs established by the CARES Law that expired on December 26, 2020, another significant component of the bill is the expansion of unemployment benefits. The bill extends the period of time that unemployed workers can receive unemployment insurance benefits for another 11 weeks. The CARES Act extended the unemployment insurance period by 13 weeks for individuals receiving unemployment insurance through their state programs, as well as for those who are entitled to receive benefits through the Pandemic Unemployment Assistance Program. The additional 11 weeks of benefits extend to 24 weeks, the extended period of eligibility for unemployment.
The bill also reinstates the supplemental federal unemployment benefit provided by the CARES Act, albeit at a lower weekly rate than before. Previously, the federal government supplemented state unemployment insurance benefits of $ 600 per week for eligible individuals. Supplementary federal benefits expired in July. The bill provides for additional federal unemployment benefits of $ 300 per week for unemployed workers who are eligible for benefits from their state unemployment programs and / or Pandemic Unemployment Assistance Program. In the absence of an extension by Congress, federal unemployment benefits will expire on March 14, 2021.