The latest COVID-19 stimulus bill — the Consolidated Appropriations Act, 2021; signed into law on December 27, 2020 and retroactive to April 1, 2020, when FFCRA became effective —extends the dollar-for-dollar tax credits for employers that choose to allow employees to continue to take existing FFCRA sick leave and extended FMLA leave through March 31, 2021. The FFCRA, which requires certain employers to provide employees with up to 80 hours of paid sick leave or 12 weeks of expanded FMLA leave for specified reasons related to COVID-19, and its mandates expire on December 31, 2020. Section 286 of the new stimulus bill does not extend the FFRCA’s mandate to provide paid sick leave or expanded FMLA leave, but provides an incentive for employers to continue to allow employees to take FFCRA leave for COVID-19–related reasons through March 31, 2021. Under the new extension, employers that continue to allow employees to take FFCRA’s original 80 hours of paid sick leave and 12 weeks of expanded FMLA leave are eligible for tax credits under the same terms as FFCRA provided in 2020.
What does this mean for employers?
As with the previous requirement, this new incentive focuses on providing leave for employees who must remain out of work due to COVID-19, but also permits businesses to plan and provide for their day-to-day operations and policies. Businesses should consider the benefits of providing sick leave, including that made available through the FFCRA, during the pandemic to promote and maintain a healthy and safe work environment. Unlike passage of the FFCRA in 2020, which provided no notice or time for planning, this new bill gives businesses time to consider their options, consult with legal and tax advisors, and determine the best path forward for the business and its employees.
This summary is just part of the overlapping web of issues and legislation facing businesses as a result of the COVID-19 pandemic. In addition to extending tax credits for paid leave provided under the FFCRA, the Consolidated Appropriations Act, 2021 contained many provisions affecting employers in multiple industries. Nixon Peabody is keeping abreast of these changes and has provided the following alerts that address other provisions of the law:
Our Nixon Peabody team will continue to analyze the new law, monitor new developments and regulations as they are made available, and provide updates on other issues facing employers and solutions to assist them in navigating through these turbulent times.
The foregoing has been prepared for the general information of clients and friends of the firm. It is not meant to provide legal advice with respect to any specific matter and should not be acted upon without professional counsel. If you have any questions or require any further information regarding these or other related matters, please contact your regular Nixon Peabody LLP representative. This material may be considered advertising under certain rules of professional conduct.
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