On December 27, 2020, the President signed into law a new COVID-19 stimulus package. Notably, the bill declines to extend the Families First Coronavirus Response Act (“FFCRA” or the “Act”) and, as a result, does not extend an employer’s obligation to provide emergency paid sick leave or emergency paid family leave for specific COVID-19 related reasons beyond December 31, 2020. Employers that nevertheless voluntarily provide paid emergency sick leave and paid emergency family leave will be entitled to a tax credit for qualifying payments made through March 31, 2021. A summary of the main changes in the legislation is set forth below.
A. Paid Sick Leave and Paid Family Leave Requirements Expire December 31, 2020.
Beginning January 1, 2021, employers with fewer than 500 employees will no longer be required to provide paid sick leave or family leave for COVID-19 related reasons under the FFCRA.
B. Payroll Tax Credit Extended Until March 31, 2021.
Beginning January 1, 2021, employers may elect to voluntarily provide emergency paid sick leave and emergency paid family leave to qualifying employees and claim the FFCRA’s payroll tax credit for payments made through March 31, 2021. Gunster’s prior alert providing more details on the payroll tax credit can be found here: Families First Coronavirus Response Act – Tax Alert.
C. Limitations to Claiming Tax Credit.
There are some limitations to the tax credit available:
- Employers can only claim the tax credit if the leave they provide would have been required under the FFCRA.
- To remain eligible for the tax credit, employers must not discipline, discharge, or discriminate against an employee who seeks to take, or who takes, the emergency paid sick leave or emergency paid family leave.
- Employers cannot receive tax credits for any amount of leave provided in excess of the FFCRA’s statutory limits or for employees who would not qualify under the FFCRA.
What Employers Should Keep in Mind: Employers who elect to voluntarily continue the emergency paid sick leave and emergency family and medical leave should continue to evaluate whether an employee is eligible for leave and maintain records to support any tax credit sought. Employers should review past guidance on the FFCRA in determining how to comply with the new legislation and should consider any updated guidance that may be published by the Department of Labor.
If you need assistance with your leave policies, please direct any questions to Gunster’s Labor and Employment practice group.
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This publication is for general information only. It is not legal advice, and legal counsel should be contacted before any action is taken that might be influenced by this publication.
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Gunster, Florida’s law firm for business, provides full-service legal counsel to leading organizations and individuals from its 13 offices statewide. Established in 1925, the firm has expanded, diversified and evolved, but always with a singular focus: Florida and its clients’ stake in it. A magnet for business-savvy attorneys who embrace collaboration for the greatest advantage of clients, Gunster’s growth has not been at the expense of personalized service but because of it. The firm serves clients from its offices in Boca Raton, Fort Lauderdale, Jacksonville, Miami, Naples, Orlando, Palm Beach, Stuart, Tallahassee, Tampa Bayshore, Tampa Downtown, Vero Beach, and its headquarters in West Palm Beach. With more than 280 attorneys and consultants, and over 290 committed professional staff, Gunster is ranked among the National Law Journal’s list of the 500 largest law firms and has been recognized as one of the Top 100 Diverse Law Firms by Law360. More information about its practice areas, offices and insider’s view newsletters is available at www.gunster.com.
