FFCRA Tax Credits for Paid Sick Leave and Emergency Family Leave Extended Through September 2021
March 17 2021
The American Rescue Plan Act of 2021 (“ARPA”) was signed by President Biden on March 11, 2021. Part 5 of the ARPA provides for additional credits to employers whose choose to grant paid sick leave and emergency family leave to eligible employees under the FFCRA.
To be clear, the ARPA does not require employers provide FFCRA leave to employees. That mandate expired on December 31, 2020. However, the continuation of certain tax credits for employers who voluntarily provide FFCRA leave has been extended from March 31, 2021 until the end of September, 2021.
Additionally, the ARPA made some other changes to expand employee eligibility (reasons) for taking FFCRA leave, reset the cap on the total amount of paid sick leave an employee can take, and increased the cap on wages paid for emergency family leave. Below is a summary of some of the main changes made by the ARPA.
- The revisions to the FFCRA provisions regarding tax credits shall apply only to wages paid with respect to the period beginning on April 1, 2021, and ending on September 30, 2021.
- In addition to the reasons already contained in the FFCRA, paid sick leave may be taken when an employer requests the employee take a COVID-19 test or obtain a diagnosis; when the employee is obtaining immunization related to COVID-19; or when the employee is recovering from any injury, disability, illness, or condition related to such immunization after a medical diagnosis.
- The amount of available paid sick leave under the FFCRA shall be applied separately for each calendar year after 2020, and with respect to calendar year 2021, without regard to the first quarter thereof. This means that as of April 1, 2021, a new allotment of 10 days of paid sick leave under the FFCRA shall be available for eligible employees if employers choose to provide it and seek the applicable tax credit.
- The amount of qualified emergency family leave wages has been increased so that it is up to $200 for any one day, and an aggregate (cap) of $12,000, which is $2,000 more than the original cap of $10,000 under the FFCRA.
- Emergency family leave under the FFCRA may now be taken for the same reasons as FFCRA paid sick leave, rather than just to care for a child due to school or day care closures as originally provided for under FFCRA.
- No tax credit shall be allowed for either FFCRA paid sick leave or FFCRA emergency family leave if an employer discriminates in the granting of FFCRA leave in favor of highly compensated employees, full-time employees, or other employees based on employment tenure.
The ARPA also makes some modifications to the FFCRA provisions dealing with self-employed individuals. The details regarding the ARPA’s revisions to the FFCRA can be obtained at Text – H.R.1319 – 117th Congress (2021-2022): American Rescue Plan Act of 2021 | Congress.gov | Library of Congress
The Labor and Employment attorneys at Weintraub Tobin have years of experience assisting employers in employment law compliance, including the administration of their leave of absence and sick leave policies. Feel free to reach out to one of them if we can be of assistance. Stay safe!