COVID-19 & Paid Leave Updates

February 8, 2021

While the new year and a new administration have arrived, the global pandemic continues to be front and center. In the United States, even as vaccination programs are (haltingly) rolled out, COVID-19 has claimed over 400,000 American lives and infected millions of others. It’s clear this crisis and the attendant challenges will be with us for some time. So as 2021 gets underway, here are some COVID-related leave developments and a peek at the Biden administration’s American Rescue Plan:

FFCRA Leave is now optional: Mandatory paid leave obligations under the FFCRA expired on December 31, 2020. The new stimulus bill (Consolidated Appropriations Act, 2021), signed on December 27, 2020, did not extend the mandatory benefits but does permit an employer to take the federal tax credit through March 31, 2021, to cover leave costs if the employer chooses to offer leave under some or all of the FFCRA programs.

Here are some important points for employers to keep in mind relative to these non-mandatory FFCRA benefits. First, employees are not entitled to a new bucket of leave entitlements. If an employee had previously used some or all of their emergency paid sick leave allotment, or their expanded FMLA leave due to school or daycare closures, only the remaining amount of leave is available to use through March 31, 2021.

For example, if a full-time employee used 40 hours of their 80-hour allotment of emergency paid sick leave in 2020, the employee would only have only 40 hours remaining to use by March 31, 2021 (should the employer opt to allow the use).

Second, the new stimulus bill did not change the qualifying reasons for leave, the caps on the amount of pay that employees are entitled to receive, or the FFCRA documentation requirements. Hence, if the employer allows employees to use their remaining FFCRA leave in the new year and seeks tax credits to cover the cost of that leave, leave must be administered (and documented) on the same terms and conditions as before. An employer cannot take advantage of the tax credits for leave that is granted for reasons beyond the initial authorized purposes, or for more hours or more pay than authorized under the initial statute.

Finally, in absence of further guidance from the DOL or IRS, it appears that employers have some latitude in managing FFCRA leave in 2021. For example, an employer may choose to allow an employee whose leave was approved in 2020 to remain on leave in 2021, but not approve any new FFCRA leave in the new year. Likewise, the employer may choose to permit leave for some reasons specified under FFCRA but not other reasons. The employer may also opt to approve FFCRA leave when business circumstances allow but deny FFCRA leave at other times when staffing needs dictate. Or, the employer may choose to allow emergency paid sick leave for authorized reasons, but not allow leave under the expanded FMLA. As always, the employer should be consistent in dealing with employee leave requests to avoid claims of discrimination.

What to expect under the American Rescue Plan: President Biden recently submitted the $1.9 trillion American Rescue Plan to Congress for consideration. In addition to $1,400 stimulus checks, extended unemployment benefits, and money to speed vaccine distribution and expand testing, the plan seeks to extend paid leave benefits to 106 more million employees, by:

  • Reinstating and expanding emergency paid sick leave for all employers – not just government employers and those with 500 or fewer employees. The plan would require employers with 500 or more employees to provide FFCRA leave and would eliminate exceptions for employers with fewer than 50 employees and for healthcare workers and first responders.
  • Expanding maximum paid leave from 12 to 14 weeks “to help parents with additional caregiver responsibilities when a child or loved one’s school or care center is closed; for people who have or are caring for people with COVID-19 symptoms, or who are quarantining due to exposure; and for people needing to take time to get the vaccine.”
  • Increasing the maximum paid leave benefit to $1,400 per week; employers with 500 or fewer employees would be reimbursed for the cost of leave through continued tax credits, but employers with more than 500 employees would not be eligible for reimbursement.
  • Extending leave measures through September 30, 2021.

As with all proposed legislation, the final plan will most likely look different than President Biden’s opening wish list. Associated Industries is monitoring these developments and will keep members informed as Congress works through the details of the plan.