The New $1.9 Trillion Stimulus Bill Impacts Extends the FFCRA Through September 2021
By now, everyone has heard that Congress passed, and President Biden signed the $1.9 trillion COVID-19 American Rescue Plan earlier this week. Not so widely publicized are the provisions of the Plan that impact the Families First Coronavirus Response Act (FFCRA).
Most importantly, the Rescue Plan does not require employers to continue offering FFCRA leave. However, the Plan does extend the FFCRA’s payroll tax credit for employers who voluntarily offer FFCRA leave through September 30, 2021. The Rescue Plan also expands the qualifying reasons for FFCRA leave for employers who choose to offer it.
Here are most of the relevant FFCRA provisions of the Plan:
The reasons for FFCRA leave, and hence to claim the payroll tax credit, have been expanded beyond the existing six reasons to include leave allowed for an employee to: (1) obtain a COVID-19 vaccine; (2) recover from any illness or condition related to the COVID-19 vaccine; or (3) seek or await the results of a COVID-19 diagnosis or test if either the employee has been exposed to COVID-19 or the employer requested the test or diagnosis.
The COVID-19-related payroll tax credit that was set to expire on March 31, 2021, was extended through September 30, 2021, for employers who voluntarily decide to provide employees with FFCRA-qualified leave.
The Plan zero’s-out the 80 hour/10-day limit for emergency paid sick leave under the FFCRA on April 1, 2021. If an employer decides to continue to voluntarily provide emergency paid sick leave under FFCRA, the employer can claim a payroll tax credit to offset up to 80 hours/10 days of wages paid as qualified emergency paid sick leave from April 1 to September 30, 2021, even if the employee had previously exhausted their emergency paid sick leave entitlement.
Previously, tax credits taken by employers to cover the cost of providing emergency FMLA leave were generally available if the employee was unable to work (or telework) to care for their child whose school or place of care has been closed or was unavailable due to the public health emergency. The Plan revises this provision so that employers may now claim tax credits for emergency FMLA leave arising from any of the reasons contained in the FFCRA (including the two new reasons). The Rescue Plan also removes the two-week waiting period on emergency FMLA leave and raises the aggregate cap on emergency FMLA leave from $10,000 to $12,000.
Adds non-discrimination rules to provide that no tax credit is available if the employer, in determining availability of the paid leave, discriminates against highly compensated employees, full-time employees, or employees on the basis of tenure with the employer.