The U.S. Department of Labor has provided much-needed updated guidance addressing questions about COVID-19 emergency paid sick leave provisions. On December 31st, 2020, the Department’s Wage and Hour Division (WHD) announced additional coronavirus-related guidance that provides information about the current status of protections and relief offered by the Families First Coronavirus Response Act (FFCRA). The FFCRA’s emergency paid sick leave and expanded family and medical leave requirements, however, expired the same day of the release. While the recent spending bill approved by Congress extends certain tax credits into 2021, the new DOL guidance clarifies that paid sick leave allotments under the FFCRA have not been officially extended.
Contents of the Guidance
The new information released came in the form of Frequently Asked Questions (FAQs) added to an already published list. Available on the WHD’s website, the new questions address the following:
- Can workers who did not use their FFCRA leave entitlement in 2020 use such leave after December 31st, 2020?
- Additionally, will the WHD maintain enforcement authority over employers’ leave responsibilities, even after the FFCRA’s leave entitlements have expired?
Relationship to the Consolidated Appropriations Act, 2021 (CAA)
Before the FFCRA’s expiration, on December 27th, 2020, President Donald Trump signed the Consolidated Appropriations Act of 2021 (CAA) into law. (More information about the CAA is available in a recent Personnel Concepts blog post.) Among other numerous Acts included, the CAA contains the COVID-Related Tax Relief Act of 2020 (COVIDTRA). The COVIDTRA contains numerous tax provisions and extenders for individuals and businesses.
Tax Credits Under the CAA
Specifically, under the COVIDTRA, employer tax credits for paid sick and expanded family and medical leave are available until March 31st, 2021. In spite of this, the CAA overall does not extend employees’ entitlement to FFCRA leave beyond December 31st, 2020. It is up to the employer whether to offer COVID-related paid sick or expanded family and medical leave to employees after January 1st, 2021.
Previously, under the FFCRA, tax credits were available to businesses with fewer than 500 employees to provide paid leave. This leave could apply to the employee’s own COVID-19-related health needs or to care for family members. According to the DOL, extending these tax credits allows workers to not have to choose between paychecks or public safety.
In conclusion, even though the FFCRA’s paid sick and family and medical leave requirements have expired, employers can still grant similar time off. This time off, however, is now voluntary under purview of the employer and does not need to occur at all. (Note: Some states may still require some form of emergency paid sick leave in 2021). Accordingly, if the employer does allow FFCRA leave they can now apply for related tax credits until March 31st, 2021.