COVID-19 Deal Extends FFCRA Tax Credits, Not Leave Mandate

By William Pokorny - Franczek P.C.

December 22, 2020

As Congress debated the new COVID-19 relief package in the weeks since the election, there was a great deal of speculation as to whether the legislation would extend the leave mandates of the Families First Coronavirus Response Act (“FFCRA”) beyond their current expiration date of December 31, 2020. Now that a deal has been reached, it looks like we have the answer to that question: the FFCRA emergency sick leave and expanded FMLA leave mandates will indeed expire on December 31, 2020. However, covered private sector employers that allow employees to take leave that would have been mandated by the FFCRA if the law had remained in effect through March 31, 2021 may continue to claim a tax credit to cover the cost of the leave.

What this means for employers

- Employers may, but are not required to, continue providing paid leave that would have been required by the FFCRA from January 1, 2021 forward.
- Private-sector employers currently covered by the FFCRA who continue to provide paid leave can continue to claim a tax credit to cover the cost of voluntarily providing FFCRA leave through March 31, 2021.
- The amendment does not increase the total amount of the tax credit available to pay for leave for any single employee. FFCRA sick leave or expanded FMLA leave taken before December 31, 2020 will still count against the total amount of any tax credits that can be claimed for leave taken through March 31, 2021.
- Government employers, including school districts and municipalities, were not eligible for the FFCRA tax credits to begin with and will remain ineligible under this new legislation.
- Even though FFCRA leave will no longer be mandatory, employers must still comply with the ADA, FMLA, and leave mandates under state and local law.
- Employers with unionized workforces must also be mindful of contract and bargaining obligations related to any changes in their leave policies.
- Things could still change. It seems unlikely that federal lawmakers would reach the current deal and then later go back to extend the leave mandate. However, that could change if control of the Senate changes hands after the Georgia runoff elections. Additionally, the new legislation may encourage states and local governments to adopt their own mandates while private employers can still take advantage of federal tax credits to cover the cost.