Employers May Voluntarily Extend Unused FFCRA Leave Benefits and Receive a Tax Credit Through March 2021

The latest coronavirus relief bill has been signed into law, and it answers a long-awaited question many employers had, which is whether the emergency paid sick leave and expanded family and medical leave benefits under the Family First Coronavirus Response Act (“FFCRA”) will continue beyond 2020? The short answer is that FFCRA leave ends on December 31, 2020, but employers may voluntarily extend their existing FFCRA programs and receive a tax credit for leave taken through March 31, 2021. Specifically, as a result of the relief bill:

• Covered employers’ obligation to provide FFCRA paid leave ends on December 31, 2020;

• Beginning on January 1, 2021, covered employers may voluntarily continue FFCRA-related paid leave to their employees and still claim a tax credit until March 31, 2021; and

• Employees are not able to reload their FFCRA leave banks in 2021. Rather, employees who did not utilize available FFCRA leave in 2020 can carry-over unused leave into 2021, but only if voluntarily permitted by their employer.

• The relief bill does not extend the FFCRA tax credit into 2021 for public employers.

As noted, the relief bill does not modify the total amount of the FFCRA leave available to employees. Therefore, employees who exhausted their FFCRA leave in 2020 do not receive a new “bank” of leave in 2021. The relief bill suggests that this holds true even if employers provide employee leave benefits based on a calendar year and choose to continue providing FFCRA leave benefits into 2021.

As a result of these changes, employers should immediately consider whether they will continue to provide paid sick and family leave to employees until March 31, 2021. Employers who discontinue their FFCRA leave program should remove them from their policy documents. Employers who voluntarily continue their FFCRA leave program should notify employees of the new March 31, 2021 expiration date.

While the FFCRA’s paid sick leave requirements end with the new year, employers should be mindful of their continuing obligations under the American with Disabilities Act (“ADA”), FMLA, or applicable state or local law (such as in New York, which has a COVID-19 paid sick leave requirement which does not sunset on December 31, 2020).

If you have any questions about the FFCRA or related employee leave issues, please contact your local Quarles & Brady attorney or:

• Chris Nickels: (414) 277-5519 / christopher.nickels@quarles.com
• Tyler Roth: (414) 277-5765 / tyler.roth@quarles.com