On December 21, 2020, Congress passed a second pandemic relief bill. The relief bill did not renew the employee paid leave provisions of the Families First Coronavirus Response Act (“FFCRA”) – the Emergency Family and Medical Leave Expansion Act and Emergency Paid Sick Leave Act – which are set to expire December 31, 2020. However, the bill does permit employers to claim tax credits through March 31, 2021 for providing paid sick leave or paid family and medical leave for the same reasons set forth in the FFCRA. Employers who provide this covered paid leave are eligible to receive the same tax credits for eligible wages paid to eligible employees as specified under the FFCRA.
There are a few practical takeaways for employers to keep in mind with the passage of this new bill:
- Employers are not required to provide leave itself under the FFCRA after December 31, 2020; however, employers must still continue to consider other applicable leave laws.
- If employers choose to provide paid sick leave or paid family and medical leave like that specified in the FFCRA after December 31, 2020, those employers will be eligible for tax credits through March 31, 2021.
- The amount of the employer’s total tax credit depends on the type of paid leave and is limited in scope by the FFCRA.