Employer Alert: Nemeth Law on effect of COVID relief bill on paid leave obligations
Last night, President Trump signed a $900 billion pandemic relief package containing stimulus funding for Americans and businesses (including unemployment benefits of $300 per week) , but no extension to the mandated paid sick and family medical leave provisions of the Family First Coronavirus Response Act (FFCRA), which will expire this Thursday, December 31, 2020.
Under the Act, the mandated Emergency Paid Sick Leave (EPSL) and Emergency Family Medical Leave Act (EFMLA) provisions of the FFCRA will expire as scheduled on December 31, 2020. This means that going forward, employers are not required to provide EPSL or EFMLA leave.
However, as of January 1, 2021, covered employers may voluntarily provide EPSL or EFMLA leave to employees (as previously under the FFCRA) and still claim a tax credit associated with the leave. The Act does not create a new bucket of FFCRA leave for employees, but only extends the tax credit for an employee’s use of his original allotment of FFCRA leave through March 31, 2021.
Keep in Mind
- If you choose to voluntarily provide EPSL leave through March 31, 2021, employees will still only have the 80 hours of paid sick leave as originally allotted from April 1, 2020.
- If an employee has already used the full 80 hours, you cannot claim a tax credit for additional hours in the new year, but can claim the credit for anyone who has not already exhausted the 80 hours.
- The 80 hours are in addition to what an employer would otherwise provide under its regular policies. As such, the tax credit could not be claimed for what is normally provided under written PTO policies. This is voluntary additional leave and must be offered before requiring employees to use their regular PTO.
- As for paid FMLA, because the Act is an amendment to the FMLA and not a stand-alone entitlement, employees may qualify for an additional 12 weeks of FMLA leave under the FFCRA beginning January 1, 2021, but only for those employers that use a “calendar year” to determine FLMA eligibility.
- This creates options for employers that will require careful review of their existing PTO, vacation, and sick leave benefits, as well as the calculation of their FMLA leave year.
- The Act does not alter any obligations employers have under Michigan law (Paid Sick Leave) or their written PTO policies.
Remember that Nemeth Law is here to help you navigate through of all us. Let us know if you need help, and stay well and safe. And Happy New Year!