Mandatory FFCRA Leave Payments Ride off into Year-End “Sunset,”
but Employers Can Opt to Voluntarily Continue FFCRA Payments
and Receive Payroll Tax Credits through March 31, 2021.
The Families First Coronavirus Response Act (“FFCRA”)—a federal law passed in March 2020 at the outset of the Coronavirus pandemic—created new categories of temporary paid leave entitlements for many employees who, for one reason or another, were prevented from working due to the impact of COVID-19. From the outset, these paid leave provisions were always scheduled to expire (or “sunset”) on December 31, 2020.
Starting January 1, 2021, employers who were subject to the paid leave provisions of the FFCRA (i.e. “Emergency Family and Medical Leave” and “Emergency Paid Sick Leave”) are no longer required to provide their employees with those forms of paid leave.
However, if an employer voluntarily elects to continue providing employees with the paid leave benefits created by the FFCRA, it may certainly do so. To help incentivize this result, at least during the next few winter months, the new bill passed by Congress extends the available payroll tax credits through March 31, 2021. Thus, while employers are no longer being forced to provide employees with FFCRA leave after the end of 2020, if an employer chooses to voluntarily provide these same leave benefits during the first three months of 2021, it can still receive payroll tax credits for the leave that has been provided—just like it did in 2020.
NOTE: This extension of the payroll tax credit does not “refresh” or “renew” an employee’s previously allocated allotment of leave. In other words, if an employee has already used up his or her balance of Emergency Paid Sick Leave and/or Emergency Family and Medical Leave, then he/she would have no additional time available under the FFCRA. Rather, this “extension” covering the first quarter of 2021 only applies to: (1) employers who choose to continue providing its employees with FFCRA leave; and (2) employees who have not yet used up their balance of FFCRA leave.