Stimulus Bill Extends FFCRA Tax Credits but Not Leave Mandate

An appropriations bill, which was signed into law on Dec. 27, 2020, does not extend the leave mandates created by the Emergency Family and Medical Leave Expansion Act (EFMLA) and the Emergency Paid Sick Leave Act (EPSLA), which expire on Dec. 31, 2020.

As a result, the requirement for employers to provide employee paid sick leave and expanded family and medical leave under the Families First Coronavirus Response Act (FFCRA) will end on that date.

However, the bill does extend the time limit for employer tax credits for employee leave required by those laws. Specifically, the tax credits will continue to be available for employers that offer EFMLA and EPSLA leave through March 31, 2021.

Tax Credits for Paid Leave Under FFCRA

The EFMLA and the EPSLA were passed as part of the FFCRA. The FFCRA also created tax credits for employers to cover certain costs of the employee leave required by the law: employee wages, health plan expenses allocable to those wages, and the employer’s portion of the Medicare tax related to the wages.

The new bill does not change the FFCRA’s original limits on the number of leave days and amount of wages eligible for tax credits.

FFCRA Paid Leave

The FFCRA requires businesses with fewer than 500 employees to provide employees up to 80 hours of paid sick leave for their own COVID-19-related health needs or to care for others. The Act also requires an additional 10 weeks of paid family leave to care for a child whose school or place of care was closed, or child care provider was closed or unavailable, due to COVID-19. The law’s paid leave requirements sunset on Dec. 31, 2020.