By Rob Gilmore & Alexis Preskar
The new COVID-19 relief bill, the Consolidated Appropriations Act, eliminated the mandatory paid leave under the Families First Coronavirus Response Act (FFCRA). However, even though paid leave is voluntary in 2021, employers can continue to claim a tax credit for providing leave, subject to certain rules.
Under the CARES Act, employers with fewer than 500 employees were required to provide paid leave to employees for certain coronavirus-related reasons. The leave was capped at 80 hours under the FFCRA, and expanded family leave to 12 weeks. As of 2021, employers are no longer required to provide paid leave, but may continue to provide leave and claim the payroll tax credit. The tax credit ends on March 31, 2021 – unless extended by Congress – and is capped at 80 hours of leave (the same as originally provided under the FFCRA).
The Department of Labor recently clarified that employees are not entitled to use any prior time granted under the FFCRA that they did not use last year. So, if an employee only took 40 hours of FFCRA leave in 2020, they are not entitled to “roll” the remaining 40 hours into 2021. Further, if an employee used all 80 hours of FFCRA leave in 2020 and the employer claimed all available tax credits, the employer cannot claim additional credits in 2021, even if they offer additional leave.
After considering factors like taxes, employee morale and availability, employers should decide whether they plan to offer paid leave in the first quarter of 2021 and apply the policy consistently. Failing to offer the same benefits to all workers could lead to claims of discrimination; for example, if an employer does not offer paid leave to women for child care duties, but offers the benefit to similarly situated men, it can lead to allegations of disparate treatment, even if that wasn’t the employers’ intent.
In addition to liability for discrimination issues, employers should ensure they have properly paid out any leave taken in 2020. The DOL confirmed that if an employee used time in 2020 and was not fully compensated for it, the employer is still liable for up to two years from the date of the violation (or three if the violation was willful).
If you have questions about the Consolidated Appropriations Act or the new FFCRA regulations, please reach out to Rob Gilmore at rsg@kjk.com or 216. 736.7240, Alexis Preskar at avp@kjk.com or 614.427.5748, or any of our Labor & Employment professionals.