The Consolidated Appropriations Act of 2021 (the Act) was signed into law on December 27, 2020. Among its many extenders, the Act provides employers the option to continue paid leave through March 31, 2021 and receive a tax credit for amounts paid.

In the alternative, employers can discontinue required paid leave ending December 31, 2020 and forego the associated tax credit. Pending further guidance, it appears any continued paid leave would need satisfy the original terms of the FFCRA (e.g. qualified reasons for leave).

Takeaways

1. The Act does not extend the mandates of the Emergency Family and Medical Leave Expansion Act (EFMLEA) or the Emergency Paid Sick Leave Act (EPSLA) enacted under the Families First Coronavirus Response Act (FFCRA);
2. The FFCRA provided up to 80 hours of paid sick and family leave under the EPSLA along with up to 10 weeks of partially paid family and medical leave under the EFMLEA to eligible employees who were unable to work because of certain COVID-19-related reasons;
3. The Act allows tax credits to employers for “FFCRA like” paid leave benefits paid to employees through March 31, 2020; and
4. The Act does not alter state law imposing a separate requirement that paid leave be provided.

Continued Mandatory Leave under State Law

Some employers have questioned whether the extended tax credit will be available for amounts paid in satisfaction of continuing mandatory paid leave requirements under state law. While further guidance is forthcoming, the language of the Act does not appear to support such a reading. Section 286 of the Act amends the meaning of “Qualified Sick Leave Wages” as wages paid through March 31, 2021: “which are required to be paid by reason of the Emergency Paid Sick Leave Act, or which would be so required to be paid if such Act were applied…” There is similar treatment for the EFMLEA component.

Other Relief

The Act expands upon the previously enacted CARES Act and provides for continued federal assistance to unemployed workers with supplemental weekly benefit payments of $300 and an extension of the maximum benefit period.

The Act continues the Paycheck Protection Program (PPP). Businesses with 300 or fewer employees (previously 500) who can document at least a 25% decrease in gross revenues from previous 2019/ 2020 quarters can receive additional PPP monies, up to $2 million. As before, PPP monies do not have to be repaid if primarily used for payroll purposes.

The Act provides direct payments to Individuals of $600 making up to $75,000 a year/ families up to $150,000 per year.

Further Guidance Expected

As with previous legislation, clarification is needed and expected. We will provide additional information as it becomes available.