The coronavirus relief package passed by Congress last week was signed by President Donald Trump on Sunday, December 27, 2020. The new law does not extend the paid leave mandates enacted under the Families First Coronavirus Response Act (“FFCRA”), which are set to expire on December 31, 2020. Next year employers will no longer be required to provide paid sick or family leave for employee absences caused by coronavirus-related reasons. However, Congress provided an incentive for private employers to voluntarily act as if the paid leave provisions of the FFCRA have been extended. Between January 1, 2021 and March 31, 2021, employers who voluntarily continue to offer paid sick and family leave benefits consistent with the framework of the FFCRA will be able to take dollar-for-dollar tax credits for the amount of paid leave benefits used by eligible employees. Public employers are not eligible for the tax credits. Voluntarily acting as if the FFCRA continues to apply does not reset or otherwise affect the statutory limits on the amount of paid leave benefits individual employees may receive (or the tax credits employers may take) under the FFCRA. We expect the Department of Labor to update its guidance.
Every employer needs to decide whether to continue offering FFCRA paid leave benefits to employees through March 31, 2021, and then revise, update, or terminate FFCRA leave policies accordingly.