Earlier this month we reported that under the latest stimulus bill, the Families First Coronavirus Response Act (FFCRA) mandatory leave requirements expire on December 31, 2020. However, the bill, which was signed into law on December 27, does include the option for employers to voluntarily continue to provide employees with FFCRA leave – and in turn to receive a tax credit for such qualified leave – through March 31, 2021. Companies should note that while the deadline to take advantage of the tax credit is extended, the statutory limits on hours of leave and the amount of pay eligible for the credit remains the same. We’ve previously reported on these limits here. Additionally, employers who opt to take advantage of the extended tax credit period may not discriminate against employees who take FFCRA leave.
On its face, the FFCRA extension appears to be a good opportunity to offer employees with leave benefits that do not impact a company’s bottom line. That said, whether a company decides to voluntarily offer employees FFCRA sick or family leave may depend on a number of factors, including company size, industry, and the state of operation. Many states, including Colorado and New York, as well as the District of Columbia and other localities, have passed COVID-19 related paid sick leave requirements that often extend into 2021 and that, until now, overlapped with FFCRA requirements. These state and local obligations can be costly, as they have not generally offered employers a credit such as FFCRA provides. Companies operating in such states may wish to continue providing employees with FFCRA leave since this can offer them an opportunity to recoup the cost of the leave.
