On Sunday, December 27, 2020, President Trump signed legislation that provides government funding and a long-awaited coronavirus (the “Bill”) relief package. The comprehensive bill contains a number of key provisions that will have an impact on public and private sector work in 2021. Of particular importance to employers is that:
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The bill does not extend the mandates of the Emergency Extension of Family and Medical Leave Act (“EFMLEA”) or the Emergency Sick Leave Act (“EPSLA”) issued under the Families First Coronavirus Response Act (“FFCRA” ) not.
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The bill allows tax credits to employers for paid leave benefits paid by FFCRA until 31 March 202
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The bill provides no economic incentive for public employers to continue with the paid leave benefits of FFCRA.
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The bill extends to the previously enacted CARES Act and provides for continued federal assistance to unemployed workers with additional weekly benefits of $ 300 and an extension of the maximum benefit period.
FFCRA leave becomes optional after 31 December 2020
The FFCRA provided up to 80 hours of paid sickness and family leave under the EPSLA along with up to ten weeks of partially paid family and medical leave under the EFMLEA to eligible employees who were unable to work due to certain COVID-19 reasons not. For private employers, the requirement to provide this paid FFCRA leave is offset by tax-for-dollar tax credits for wages paid to employees taking paid leave. These FFCRA provisions will expire on 31 December 2020 and the bill does not contain any extension of these provisions.
However, the bill does provide the opportunity for private employers to claim tax credits between 1 January and 31 March 2021 on wages paid to employees who take leave in accordance with the existing FFCRA framework. In effect, the terms of the paid leave of the FFCRA are optional after 31 December 2020. The tax credits are available until 31 March 2021, provided that the employer paid leave is available, as’ it would be required if [the FFCRA] applied. ”
Whether they should offer paid leave in 2021 that is in line with the FFCRA is something employers need to evaluate and plan for before the end of the year. Every employer has its own concerns and a multitude of factors to decide with to make this decision. For example, private employers who are experiencing staffing problems or are struggling financially may consider the value of future tax credits of little value to continue with paid leave under the FFCRA framework. Most employers in the public sector are likely to come to a similar conclusion as far as the economy is concerned, as they are not eligible for tax credits under the FFCRA. On the other hand, private employers who decide to continue to offer paid leave benefits, depending on the receipt of tax credits for the eligible amounts, may determine that the positive effect on the morale and retention of employees justifies the decision to continue to deal with the payment of paid sickness and family leave.
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 taken, employers will need to review, update or eliminate the current FFCRA-paid leave policy in light of the mandatory components of the FFCRA that expire on December 31, 2020. It is also important for employers to notify employees in advance of any changes to paid leave policies, including the impact such changes will have on their rights and the leave options under those policies.
Improved unemployment benefits
In light of the historical unemployment levels and with the federal emergency unemployment programs instituted under the CARES Act that expired on 26 December 2020, another important component of the bill is the extension of unemployment benefits. The bill extends the time that unemployed workers can claim unemployment insurance benefits by an extra 11 weeks. The CARES Act extended the unemployment benefit period by 13 weeks for individuals receiving unemployment benefits through their government programs, as well as those eligible to receive benefits through the Pandemic Unemployment Benefit Program. The additional 11-week benefits extend to 24 weeks during the extended period of unemployment.
The bill also reintroduces the supplementary federal unemployment benefit under the CARES Act, albeit at a lower weekly rate than before. Previously, the federal government supplemented state unemployment insurance benefits amounting to $ 600 per week for eligible individuals. The supplementary federal benefits expired in July. The bill provides for additional federal unemployment benefits of $ 300 per week to unemployed workers who are eligible for benefits from their state unemployment programs and / or the Pandemic Unemployment Benefit Program. Absent by Congress, the supplementary federal unemployment benefits will expire on March 14, 2021.