On December 27, 2020, President Trump signed the Consolidated Appropriations Act, 2021 into law, which provides $900 billion in coronavirus relief and $1.4 trillion to fund the government. Below is a summary of the bill’s many provisions that will affect employers.
- Payroll credit for paid sick and family leave: The Families First Coronavirus Response Act (FFCRA) provided a refundable tax credit for the mandated paid sick leave and family leave for private-sector employers with under 500 employees. The bill does not extend the FFCRA provisions that required private and public sector employers (state and local government entities) to provide emergency paid sick and family leave. Instead, this bill extends the tax credit through March 31, 2021, for private-sector employers that voluntarily continue to offer paid sick and family leave to their employees for the same as available under the FFCRA. Importantly, the bill does not create additional leave entitlements, employees still only have the original 80 hours of paid sick leave and 12 weeks of expanded family and medical leave (of which, the first two weeks are unpaid by default). Employers will not receive tax credits for any amount of emergency paid sick and family leave that is provided in excess of the FFCRA’s statutory limits. Additionally, to be eligible for the tax credits, employers may not discharge, discipline, or discriminate against any employee who seeks to take emergency paid sick and family leave.
- Payroll Tax Deferral: Workers whose payroll taxes have been deferred since September would be given until Dec. 31, 2021, to pay back the government, instead of through April 30, 2021, as originally directed by the Treasury Department.
- CARES ACT: Extends and expands the CARES ACT employee retention tax credit (ERTC). Extends the date by which state and local governments must make expenditures with CARES Act Coronavirus Relief Fund (CRF) awards from Dec. 30, 2020, to Dec. 31, 2021.
- Unemployment Benefits: Extends the Federal Pandemic unemployment Compensation (FPUC) program through March 14, 2021, providing $300 per week for all workers receiving unemployment benefits.
As of January 1, 2021, the emergency paid sick and family leave under the FFCRA will become voluntary to employers. Employers should determine whether it will continue to offer paid sick and family leave consistent with the FFCRA. Employers will need to revise and update their existing leave policies and practices.
The attorneys at Walter | Haverfield are here to help you navigate your obligations under local, state, and federal laws.