The Continued Assistance Act became law on December 27, 2020 and extends tax credits for the Families First Coronavirus Response Act (FFCRA). The FFCRA:
created a new type of mandatory COVID-19-related paid leave (called Emergency Paid Sick Leave), and
expanded the existing Family Medical Leave Act (FMLA) to include paid leave for COVID-19-related child care because of closed schools and daycare (called Expanded Family Medical Leave).
The FFCRA treated these two categories of leave slightly differently. For example, taking time off from work to care for a healthy child who is out of school because of COVID-19 counts toward limits in the FMLA, while taking off work because you or someone else is sick with COVID-19 does not.
The FFCRA mandatory leave requirements expired on December 31, 2020. However, on December 27, 2020, President Donald J. Trump signed into law the Continued Assistance Act, which extends the unemployment benefits claim programs created under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). This new legislation includes the option for employers to voluntarily continue to provide employees with FFCRA leave – and in turn to receive a tax credit for such qualified leave – through March 31, 2021.
Companies should note that while the deadline to take advantage of the tax credit is extended, the statutory limits on hours of leave and the amount of pay eligible for the credit remains the same. Additionally, employers who opt to take advantage of the extended tax credit period may not discriminate against employees who take FFCRA leave.
The FFCRA extension appears to be a good opportunity to offer (to employees with leave) benefits that do not impact a company’s bottom line. Companies may wish to continue providing employees with FFCRA leave since this can offer them an opportunity to recoup the cost of the leave.