As relayed in our late December piece titled: “It’s Official, the FFCRA Expires This Year. Tax Credits Available to Employers that Voluntarily Provide Paid Leave for COVID-19 Absences,” mandated FFCRA paid leave expired on December 31, 2020; however, per the federal government’s new stimulus bill (The Consolidated Appropriations Act, 2021 referred as the “Act”), as of January 1, 2021, covered employers may voluntarily continue to provide emergency paid sick leave or emergency paid FMLA Leave under the FFCRA and take the tax credit associated with those payments for leave taken through March 31, 2021.
As we noted in our prior piece, the Act does not appear to give employees additional paid leave; it just allows them to use any leftover paid FFCRA leave they had until March 31, 2021 instead of December 31, 2020. We had hypothesized that this would apply equally to emergency FMLA leave, even if an employer’s FMLA policy resets every calendar year, and on December 31, 2020, the Department of Labor amended its FFCRA Q&A Guidance. Ultimately, however, the Guidance fell short as it pertained to leave taken after December 31, and largely reiterated what was clear from the stimulus bill, stating: “The Consolidated Appropriations Act, 2021, extended employer tax credits for paid sick leave and expanded family and medical leave voluntarily provided to employees until March 31, 2021. However, this Act did not extend an eligible employee’s entitlement to FFCRA leave beyond December 31, 2020.” (Q.104). The guidance did make clear though, that even if an employee did not take any or all of the FFCRA leave that they were entitled to prior to December 31, 2020, they are not entitled to use it come January 1, 2021. The guidance then referred employers with questions about claiming the refundable tax credits to the IRS’ previous guidance, last updated in November of 2020.
Again, hopefully, more guidance on this is to come. But for now, we’re still left with our previous hypotheses: there is no new bucket of leave available for tax credit. For example, if an employee used all 80 hours of their emergency paid sick leave last year, they are not entitled to more emergency paid sick leave come January 1, and their employer cannot take tax credit for additional emergency paid sick leave provided to that employee in 2021. But, the verdict is still out on whether emergency paid family and medical leave can reset.
The Department of Labor also included a FAQ indicating that it will enforce the FFCRA for leave taken or requested during the effective period of April 1, 2020, through December 31, 2020, if the complaints are made within the statute of limitations—two years from the date of the alleged violation (or three years in cases involving alleged willful violations). (Q.105). This means that if an employer did not properly pay an employee for FFCRA time that they were entitled to through December 31, 2020, or otherwise allegedly violated the FFCRA, an employee may file a complaint with the Wage and Hour Division within two (or potentially three) years of the last action believed to be in violation of the FFCRA. There also may be a private right of action for alleged violations. Therefore, employers beware an employee’s ability to sue for enforcement of or non-compliance with the previous FFCRA leave mandates did not expire. In other words, you are not off the hook for any pre-December 31, 2020 FFCRA violations, and you must still pay your employees for the FFCRA leave they took before the mandate ended.
And, as a reminder, employers should still review and comply with their state’s COVID-19 leave laws, if any.
About the Author: Chelsea Canaday is an attorney in Dickinson Wright’s Columbus office. She focuses her practice primarily in the areas of education and employment law. Chelsea can be reached at 614-591-5496 or email@example.com and you can visit her bio here.