Beginning April 1, 2020, the Families First Coronavirus Response Act (FFCRA) has provided employees with 80 hours of paid sick leave for specified reasons related to COVID-19 and up to 10 weeks of paid leave for employees who are unable to work due to the need to care for a child. This bill was set to expire on December 31, 2020. As the new year approaches, Congress decided to not extend the FFCRA, but instead allow employers to decide if their company will continue to provide paid leave until March 31, 2021.
Employers need to promptly consider whether extending the paid leave previously required by the FFCRA will be beneficial for their company. Congress has provided an incentive for companies to choose to extend paid leave by offering payroll tax credit. Any amount of paid sick or family leave paid until March 31, 2020, that would have been covered by the FFCRA is eligible for tax credit. If a company opts to continue to provide paid sick and family leave, employees are not entitled to more sick leave starting the new year, but may carry over any unused time. Conversely, the amount of family leave an employee has available in the new year depends on how much of the 10 weeks they had already taken. Employers will not receive any tax credits for any amount of leave they provide employees that exceeds the amount of time afforded by the FFCRA.
The first question an employer must ask is whether the company is capable of providing both paid sick leave and paid family leave equally to all of their employees through March 31, 2020. Without the means to do so, a company should not attempt to spread themselves thin or only offer the benefit to some full-time employees. If the company has the resources to continue to provide leave for their employees, the company should determine how they will provide notice of the extension to employees and keep track of leave that would have fallen under FFCRA and therefore is eligible for tax credit.
With the expiration of FFCRA does not come the expiration of COVID-19 related workplace issues. Regardless of whether a company chooses to provide the same leave that was previously mandatory under the FFCRA, every company needs to have a plan in place for when similar issues of extended sickness and heightened family obligations arise for their employees. The attorneys at Simpson, Jensen, Abels, Fisher & Bouslog, P.C. are experienced in handling complex business issues. Contact us at (515) 288-5000 to discuss your COVID-19 employee leave plan with our firm.
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