On March 6, 2021, the Senate passed an amended American Rescue Plan Act of 2021. The amended bill will now go back to the House of Representatives for a vote, before heading to President Biden for signature where it will become law.
The American Rescue Plan covers a wide range of areas. This blog focuses on the FFCRA Leave, specifically the Emergency Paid Sick Leave for employees, and what obligations (if any) employers have.
BOTTOM LINE: FFCRA Leave Remains Optional
The Rescue Plan maintains that FFCRA leave is optional for employers in 2021. Providing COVID Paid Sick Leave and Emergency Family Leave under the FFCRA is not mandatory.
However, employers may provide such leave and receive the full tax credit (up to the statutory maximums) for any leave provided through September 30, 2021.
…Let’s start with Paid Sick Leave
(Again, this blog focuses solely on Paid Sick Leave. The next blog will focus on Expanded Emergency Family Medical Leave.)
Employers may decide to provide Paid Sick Leave in 2021 as if the FFCRA was still in effect. The Rescue Plan explains that employers may choose to provide FFCRA Leave and thereby receive the tax credit for any leave provided through September 30, 2021.
So, if an employer decides to provide the Paid Sick Leave under the FFCRA in 20201, the employer will receive the tax credit for 100% of the wages paid for FFCRA Paid Sick Leave. Remember, the tax credit has thresholds of up to $500 per day when the employee is absent due to their own sickness, or $200 per day when the employee is absent to care for others (see below).
QUICK RECAP…WHEN AND WHY CAN AN EMPLOYEE TAKE PAID SICK LEAVE?
Under the FFCRA individuals are entitled to Paid Sick Leave for 7 reasons. The Rescue Plan maintains the same entitlements for the leave as the FFCRA, but includes one revision that seems to bring the bill to the current situation as it relates to COVID testing and vaccination. Under the FFCRA as amended by the Rescue Plan, an employee is entitled to Paid Sick Leave where the employee is:
- Subject to a Federal, State, or local quarantine or isolation order related to COVID-19,
- Been advised by a health care provider to self-quarantine due to concerns related to COVID-19.
- Experiencing symptoms of COVID-19 and seeking a medical diagnosis.
(A) the employee is seeking or awaiting results of a diagnostic test for, or a medical diagnosis of, COVID-19; and
(b) such employee has been exposed to COVID-19, or the employee’s employer has requested such test or diagnosis, or the employee is obtaining immunization related to COVID-19, or recovering from any injury, disability, illness, or condition related to such immunization
- Caring for an individual who is subject to a Federal, State, or local quarantine or isolation order related to COVID-19.
- Caring for an individual who has been advised by a health care provider to self-quarantine due to concerns related to COVID-19.
- Caring for a son or daughter if the school or place of care of the son or daughter has been closed, or the child care provider of such son or daughter is unavailable, due to COVID-19 precautions.
- The employee is experiencing any other substantially similar condition specified by the Secretary of Health and Human Services in consultation with the Secretary of the Treasury and the Secretary of Labor.
IT IS A NEW YEAR…How Much Paid Sick Leave Can an Employee Take?
Unlike the Consolidated Appropriations Act passed in December, the Rescue Plan gives every employee a clean slate for Paid Sick Leave. As we know, the FFCRA provides 80 hours (10 days) of Paid Sick Leave for full time employees, and the average number of hours the employee works in a two week period.
Interestingly, the Rescue Plan explains that the aggregate number of days where an employer can claim the tax credit for the Paid Leave shall not exceed, “10 [days], over…the aggregate number of days so taken into account during preceding calendar quarters in such calendar year (other than the first quarter of calendar year 2021).” What does this mean?
…Under the Rescue Plan, an employee can take 10 days of Paid Leave, in addition to the leave the employee had already taken, even in 2021. Once the bill becomes law, every employee gets a fresh round of leave. Now, that does not mean that the employees can roll over unused time from the previous quarter, it is just that the employee gets a fresh start for the second quarter of 2021.
NOTE: The Rescue Plan is silent with respect to part-time employees; and whether they receive less leave. The Act calls on the DOL to issue regulations, that may clarify this issue.
EMPLOYERS TAKE NOTE
The Rescue Plan is clear: Employers who decide to extend the FFCRA leave in 2021, must abide by all facets of the Act. This means, in order to obtain the tax credit, employers must be sure to obtain all necessary documentation from their employees.
WHAT DOES THIS MEAN?
This optional extension of the Paid Sick Leave tax credit helps employers navigate this summer. Until now, employers could not obtain a tax credit for employees seeking and presenting for a COVID-19 test. Now, employers can recoup that money. Employers should assess whether they are extending the FFCRA leave in advance of the bill becoming law.
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