By Lee W. Cotugno, Esq.
The mandatory paid leave programs created under the Families First Coronavirus Response Act of 2020 (“FFCRA”) ended on December 31, 2020. However, the Consolidated Appropriations Act, 2021 (“2021 Act”), signed into law on December 27, 2020, allows for voluntary paid leave and tax credits for employers for a limited period of time and makes other changes that will affect the workplace for all employers, including nonprofits.
As has often been the case with COVID-19 legislation, many questions remain regarding how the new law will operate. Most of the questions will likely be answered through Department of Labor and Internal Revenue Service guidance.
As mentioned above, the two types of mandatory paid leave established by the FFCRA (Emergency Paid Sick Leave (“EPSL”) and Expanded Family and Medical Leave (“Expanded-FMLA Leave”)) expired on December 31, 2020. (To review the basics of the FFCRA, please see my post here.)
As a reminder, EPSL is a new category of paid leave created by FFCRA § 5102 for employees who are experiencing COVID-related symptoms or caring for a dependent with such symptoms. In contrast, Expanded-FMLA leave, created by FFCRA § 3101, is not a new type of paid leave, but rather an additional basis for which an employee can take leave under the existing Family and Medical Leave Act. Notably, Expanded-FMLA does not extend the time period for which leave is available, it simply expands the list of reasons for which an employee can be eligible to take FMLA leave.
Under Section 286(a) of the 2021 Act, covered employers (in general, those with fewer than 500 employees) can voluntarily grant both EPSL and Expanded-FMLA leave through March 31, 2021 and continue to receive FFCRA §§ 7001-7005 tax credits under certain conditions.
Specifically, employers can still receive tax credits for voluntary paid leave if the employee taking such leave has not exhausted his or her paid leave caps under the FFCRA. These paid leave caps for full-time employees were 80 hours for paid EPSL and 10 weeks for paid Expanded-FMLA leave.
With respect to EPSL, under the 2021 Act, if an employee did not hit the EPSL paid leave caps prior to January 1, 2021, the employer can provide voluntary paid leave to that employee through March 31, 2021 and earn FFRCA § 7001 tax credits for those hours of paid leave remaining within the caps.
Expanded-FMLA Leave works a bit differently. Because Expanded-FMLA Leave is a function of the standard FMLA (rather than an extension of it), the employer’s eligibility for FFCRA § 7003 tax credits for Expanded-FMLA Leave will depend on whether an employee has any remaining regular FMLA leave available.
If an employee has exhausted his 12 weeks of regular FMLA leave, no further paid Expanded-FMLA Leave can be granted. (This result may change based upon future DOL Guidance.)
However, if a new 12-month FMLA period has opened, and an employee has not used all of the 10 weeks of paid Expanded-FMLA Leave in the new period, additional voluntary paid Expanded-FMLA Leave can be granted (until the 10-week cap is exhausted). Whether a new 12-month FMLA period has opened will depend on which 12-month standard for FMLA the employer uses. Common standards include calendar year, fiscal year, 12-month period measured forward or rolling 12-month period measured backwards.
Section 201 of the 2021 Act also extended the amount of unemployment benefits authorized by CARES Act § 2102 in two ways. First, the time that unemployed workers can collect unemployment benefits was increased by 11 weeks (it previously had been extended by 13 weeks). Second, supplemental federal unemployment benefits, which had expired in July, were reinstated, this time in the amount of $300 per week. These extended benefits will expire on March 14, 2021.
The interpretation of the 2021 Act may be modified as updated guidance is provided. Employers should regularly check the DOL’s “FFCRA: Questions & Answers” page for the latest guidance.
Family and Medical Leave Act Guidance
Families First Coronavirus Response Act (Divisions C, E, and G)
Consolidated Appropriations Act, 2021 (Sec. 286)
Department of Labor FFCRA: Questions & Answers Page
Lee W. Cotugno obtained his law degree from the University of California at Berkeley in 1977 where he was a Member of the Moot Court Board and graduated summa cum laude from the University of Minnesota in 1973. Prior to joining his present firm, Mr. Cotugno worked for a prominent Los Angeles law firm and litigated a variety of complex business and commercial cases. He has tried numerous jury and court trials and has been lead trial and appellate counsel in unfair competition, banking, labor and real estate actions. A substantial portion of Mr. Cotugno’s current practice is in the area of employment law, representing small to medium sized companies as well as corporate officers, employees and workers who have claims for wrongful termination, discrimination, harassment, and other violations of state and federal civil rights laws. Mr. Cotugno also advises and represents companies that seek to comply with state and federal employment laws in order to avoid litigation.
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