Update – New Stimulus Bill’s Impact On FFCRA Paid Leave

The Consolidated Appropriations Act, 2021 (CAA) signed into law by President Trump on December 27, does not extend the paid leave requirements of the Families First Coronavirus Response Act (FFCRA) but does extend the tax credits. If employers choose to continue providing paid sick leave and emergency FMLA under the FFCRA, they can continue to take a tax credit for payments made through March 31, 2021.

You will remember that Congress passed the FFCRA in March 2020. This law amended the FMLA to provide 12 weeks of public health emergency leave for certain employees and required 2 weeks of emergency paid sick leave for employees who were unable to work because of COVID-19. These new types of leave were effective, however, only until December 31, 2020.

Section N, Title II, Subtitle B of the CAA contains the COVID-related Tax Relief Act of 2020 (CTRA). This Act does not extend the paid leave requirements of the FFCRA. As of December 31, employers are no longer obligated to provide the paid leave mandated by the FFCRA. But the CTRA did extend the tax credits available to employers for providing such paid leave to March 31, 2021; as such, employers who choose to continue to make these benefits available to employees can continue to seek a tax credit for payments made through March 31.

We encourage employers to review the tax credit language which can be found in Sections 286-288 of the CTRA. KZA attorneys are available to assist you with any questions you may have about this new law.

KZA Employer Report articles are for general information only; they are not intended and should not be construed to be legal advice. Reading or replying to such articles does not establish an attorney-client relationship. In addition, because the subject matters and applicable laws discussed in Employer Report articles are often in a state of change and not always applicable to every type of business entity or organization, readers should consult with counsel before making decisions based on the same.