The Consolidated Appropriations Act 2021 did not extend the Families First Coronavirus Response Act (FFCRA) – but there are several considerations employers should keep in mind regarding leave and the FFCRA.

Background

The Families First Coronavirus Response Act (H.R. 6201) was signed into law March 18, 2020, and generally became effective April 2, 2020.

The FFCRA provided expanded family leave (provided under an amendment to the federal Family and Medical Leave law) and paid sick leave.

Under the FFCRA, covered employers (those with less than 500 employees) were required to provide leave to their employees for one six qualifying reasons:

• When the employee is subject to a federal, state, or local quarantine or isolation order related to COVID-19.

• When the employee has been advised by a health care provider to self-quarantine related to COVID-19.

• When the employee is experiencing COVID-19 symptoms and is seeking a medical diagnosis.

• When the employee is caring for an individual subject to a quarantine order or who is advised to self-quarantine.

• When the employee is caring for a child whose school or place of care is closed due to COVID-19 related reasons.

• When the employee is experiencing any other substantially-similar condition specified by the U.S. Department of Health and Human Services.

The length of leave and the amount paid to an employee was specified within the text of the FFCRA.

The FFCRA also provided a refundable tax credit for employers to offset the costs associated with the expanded family leave and sick leave. The refundable tax credit for employers is equal to 100% of qualified public health emergency leave wages and qualified paid sick leave wages required to be paid by the employer under FFCRA for each calendar quarter through the end of 2020.

The credit itself is actually a credit against the employer’s portion of Social Security taxes (6.2% of wages paid by an employer) that the employer submits for the quarter in which the qualifying wages are paid.

The FFCRA also provided that the tax credit available is increased for the “qualified health plan expenses” allocable to the qualified public health emergency leave wages or the sick leave wages (as applicable) for which a credit is allowed.

Both for profit and nonprofit employers are eligible, but governmental employers are not.

The Extension

On Dec. 27, 2020, the Consolidated Appropriations Act 2021 (Act) became effective.

The Act did not extend the FFCRA. The FFCRA mandated leave expired on Dec. 31, 2020. In 2021, covered employers can choose to continue to provide the same paid sick leave and paid family leave, but they are not required to do so.

If an employer chooses to extend the leave for their employees, they can still take the tax credit under the FFCRA. Under the Act, employers can provide these benefits and take the tax credit for leave taken through March 31, 2021.

The Act does not provide any new FFCRA leave in 2021. Thus, the 2021 voluntary option only applies to employees who did not use their FFCRA allotment in 2020.

For example, an employee had 40 hours of FFCRA paid sick leave left as of Jan. 1, 2021. On Jan. 2, she experiences COVID-19 symptoms, such that she needed leave to stay home and await her test. Her employer could either 1) allow the employee to use her remaining 40 hours of paid FFCRA leave and take the tax credit, or 2) inform the employee it is not extending FFCRA, and treat her absence in accordance with its current policies.

What Does This Mean for Employers?

Although the FFCRA leave is no longer mandatory, employers who do not extend FFCRA to all employees with remaining leave, may open themselves up to litigation, such as a discrimination claim, if they are granting or denying the leave based on a protected class.

Further, if employers extend the leave to benefit from the tax credit, they must follow the FFCRA regulations to provide the paid sick leave and paid family leave.

On Jan. 28, 2021, the IRS updated its FAQs in light of the Act. Within the overview of this update, the IRS said that:

the FFCRA tax credits are available for paid leave an Eligible Employer voluntarily provides between Jan. 1, 2021, and March 31, 2021, only to the extent that leave would have satisfied the requirements of the EPSLA and Expanded FMLA.(Emphasis added).

Thus, modifying the leave in any way will jeopardize an employer who wants to receive the tax credit.

Other Impacts: FMLA

Beyond the tax credit extension, the FFCRA will impact other aspects of the employment relationship.

Under the federal Family and Medical Leave Act (FMLA), eligible employees are entitled to take up to 12 work weeks of unpaid leave during any 12-month period if they work for an employer who employs 50 or more employees within a 75-mile radius of the worksite.

The eligibility requirements for FMLA are objective. The employee must have been employed with the company for 12 months and must have worked at least 1,250 hours prior to the start of FMLA.

At the time an employee requests leave under FMLA they must have actually worked 1,250 hours for the employer within the previous 12 months.

Under FMLA, the term actually worked is as defined in the Fair Labor Standards Act (FLSA), including all time the employee must be on duty or any additional time the employee is “suffered or permitted” to work. The Department of Labor has made it very clear in its FAQs that “paid leave and unpaid leave, including FMLA leave, are not included.”

Employees who were furloughed or who took paid or unpaid leave in 2020 – under the FFCRA or otherwise – must still meet the 1,250-hour requirement to be eligible for FMLA.

Whether an employee’s 2020 leave affects their 2021 FMLA will be easier to calculate for hourly employees. However, employers with exempt employees must remember that, under 29 C.F.R. 825.110(c)(3), they carry the burden of showing that the employee has not worked the requisite hours, unless an employer maintains accurate records of hours worked by that exempt employee.

This article was originally published on the State Bar of Wisconsin’s Labor & Employment Law Section Blog. Visit the State Bar sections or the Labor & Employment Law Section web pages to learn more about the benefits of section membership.