RECENT FEDERAL COVID LEGISLATION: EMPLOYEE LEAVE OPTIONS & EMPLOYER TAX CREDIT ELIGIBILITY
By John B. Moenk, Associate
In the spring of 2020, Congress passed the Families First Coronavirus Response Act (FFCRA). The law required emergency paid sick leave or emergency paid family and medical leave for those unable to work due to the effects of COVID-19 for most employers. (The second protection effectively operated as an extension to FMLA leave concepts to employers with less than 50 employees). These mandated protections, however, expired on December 31, 2020.
Late in December 2020, Congress approved the Consolidated Appropriation Act (CAA), 2021, which was signed into law on December 27, 2020. This Act extended the credit against payroll taxes associated with FFCRA to covered employers. This means that if an employee had not already used all their paid time as allowed under FFCRA, they may still use this time upon the approval of the employer, and the employer would then be entitled to a tax credit for the leave time taken. Whereas the FFCRA required mandated leave for the employee, leave time under the CAA is at the employer’s discretion. If an employer elects to take advantage of this option, however, they should do so in a consistent manner for all eligible employees to avoid potential claims of discrimination.
The CAA did not provide for a new allotment of funds to cover any of this 2021 leave. Employers that continue allowing employees to take leave available under FFCRA, should ensure that those employees have not already exhausted their available FFCRA leave time, they may be ineligible for the tax credit.
Unless Congress or the State of Ohio enact new legislation, which seems unlikely, employers may continue to offer the leave benefit through March 31st to take advantage of the tax credit, or adopt their own COVID-19 leave policy. Should an employer decide to create a new leave policy, the policy should clearly articulate what the leave time may be used for, whether it is paid time off, and whether employees are required to exhaust all available paid-leave time prior to utilizing a “COVID Leave” benefit.
For more information about NGC’s employment law practice, please contact John at: [email protected].