The Families First Coronavirus Response Act (FFCRA) was one of the first major laws enacted in response to the COVID-19 pandemic. It allows employees paid sick time and paid family leave time to care for themselves or loved ones during the ongoing health crisis. As of January 1, 2021 employers are no longer required to offer paid sick or family leave time but still remain eligible for a payroll tax credit.
FFCRA paid leave has been subject to various guidance over the past year, and the rules have changed yet again under the recently signed American Rescue Plan Act (ARPA). Changes under ARPA apply to amounts paid during calendar quarters beginning after March 31, 2021. Here are some of the pertinent highlights:
- The FFCRA paid sick time and paid family leave credits have been extended from March 31, 2021, through September 30, 2021; however, offering paid sick or family leave time is no longer mandatory as mentioned above.
- In addition to the reasons listed in the original Act regarding when an employer could claim the credit, the paid sick and family leave credit can now also be claimed by employers who provide paid time off for employees to:
- obtain the COVID-19 vaccination,
- recover from an illness related to the immunization or
- await the results of a COVID-19 test.
- The 10-day limitation on the maximum number of days for which an employer can claim the paid sick leave credit with respect to wages paid to an employee has been reset as of April 1, 2021. This means an employee who has previously taken up to 80 hours of paid sick leave prior to April 1, 2021 is now eligible to take an additional 80 hours if the employer continues to offer it. For the self-employed, the 10-day reset applies to sick days after January 1, 2021.
- An employer offering the additional 12 weeks of paid family leave no longer needs to make the first two of those weeks unpaid; the full 12 weeks is now eligible for the credit. The additional 12 weeks of paid family leave can now also be taken for all COVID-related reasons listed in the original Act (click here to access our webinar for a refresher…you’ll find the information at the 13:15 mark) as well as the new ones mentioned above. The additional 12 weeks is capped at 2/3 the rate of regular pay not to exceed $200 per day. Previously, this 12 weeks was only eligible for child care issues related to COVID-19.
- The amount of wages for which an employer may claim the paid family leave credit in a year has increased from $10,000 to $12,000 per employee.
- The paid sick and family leave credit has been increased by the cost of the employer’s qualified health plan expenses.
- A nondiscrimination requirement has been established whereby no credit will be permitted to any employer who discriminates in favor of highly compensated employees (as defined under the tax code), full-time employees or other employees on the basis of employment tenure.
A reminder that employers should continue to require written notice by the employee including dates and qualifying reasons the employee is requesting the leave. Depending on the reason the employer may wish to request additional information. Please refer to this article which outlines the original Act’s documentation requirements.
The paid leave originally introduced under the FFCRA and now updated under the ARPA remains an important relief measure for employers and employees alike. Please contact your DunlapSLK team member with any questions you may have.