On March 10, 2021, Congress passed its landmark $1.9 trillion COVID-19 relief bill, and President Biden signed the bill into law on March 11. The bill does not require employers to continue offering Families First Coronavirus Response Act (“FFCRA”) leave, but it extends the FFCRA’s payroll tax credit provisions for employers who choose to offer such leave through September 30, 2021. The bill also expands the qualifying reasons for FFCRA leave for employers who choose to offer it.
Here are the key FFCRA-related provisions in the March 2021 stimulus bill for employers to be aware of:
The requirement that employers provide emergency paid sick leave or expanded family medical leave under the FFCRA expired on December 31, 2020. The new law does not change that; providing FFCRA leave is now optional.
The new law expands the types of leave for which a payroll tax credit can be claimed to include leave taken when an employee is (1) obtaining a COVID-19 vaccine; (2) recovering from any illness or condition related to the COVID-19 vaccine; or (3) seeking or awaiting 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 Tax Relief Act of 2020 had extended through March 31, 2021 the tax credit to reimburse employers for the cost of providing paid FFCRA leave. The new law continues that payroll tax credit through September 30, 2021 for employers who voluntarily decide to provide employees with FFCRA leave.
The new law resets the 10-day limit for emergency paid sick leave under FFCRA, starting 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 10 days of wages paid as qualified emergency paid sick leave from April 1 to September 30, 2021, even if employees previously exhausted their emergency paid sick leave entitlement.