On March 6, 2021, the Senate passed an amended American Rescue Plan Act of 2021. The amended bill will now go back to the House of Representatives for a vote, before heading to President Biden for signature where it will become law.
The American Rescue Plan covers a wide range of areas. This blog focuses on the FFCRA Leave, specifically the Paid Family Leave and what obligations (if any) employers have.
BOTTOM LINE: FFCRA Leave Remains Optional
The Rescue Plan maintains that FFCRA leave is optional for employers in 2021. Providing COVID Paid Sick Leave and Emergency Family Leave under the FFCRA is not mandatory.
However, employers may provide such leave and receive the full tax credit (up to the statutory maximums) for any leave provided through September 30, 2021.
…Let’s look at the Emergency Family Leave…
(Again, this blog focuses solely on Paid Family Leave. The previous blog focused on Paid Sick Leave.)
Employers may decide to provide Emergency Family Medical Leave (EFMLA) in 2021 as if the FFCRA was still in effect; however, as explained below the Act includes a broad range of reasons for EFMLA.
Employers may choose to provide FFCRA Leave and receive the tax credit for any leave provided through September 30, 2021.
If an employer decides to provide the EFMLA under the FFCRA in 2021, the employer will receive the tax credit for 100% of the wages paid for FFCRA Paid Sick Leave. The tax credit thresholds of up to $200 per day and $12,000 in the aggregate with respect to all calendar quarters.
QUICK RECAP…WHEN AND WHY CAN AN EMPLOYEE TAKE EXPANDED EMERGENCY PAID FAMILY LEAVE?
Under the FFCRA as amended by the Rescue Plan, an employee is entitled to 2/3 the regular rate of pay for leave under EFMLA. An employee may take EFMLA leave for when an employee is unable to work due to a Qualifying Need Related to a Public Health Emergency.
Now way back in 2020, the Qualifying Need was to care for a child under the age of 18. Let’s check out the old text…
The term “qualifying need related to a public health emergency”, with respect to leave, means the employee is unable to work (or telework) due to a need for leave to care for the son or daughter under 18 years of age of such employee if the school or place of care has been closed, or the child care provider of such son or daughter is unavailable, due to a public health emergency.
The new language retains the original language, but includes additional language that greatly expands the definition of a Qualifying Need.
It will look like this:
The term “qualifying need related to a public health emergency”, with respect to leave, means the employee is unable to work (or telework) due to a need for leave to care for the [child] under 18 years of age of such employee if the school or place of care has been closed, or the child care provider of such son or daughter is unavailable, due to a public health emergency, ‘or any reason for leave described in section 5102(a) of the Families First Coronavirus Response Act, or the employee is seeking or awaiting the results of a diagnostic test for, or a medical diagnosis of, COVID-19 and such employee has been exposed to COVID-19 or the employee’s employer has requested such test or diagnosis, or the employee is obtaining immunization related to COVID–19 or recovering from any injury, disability, illness, or condition related to such immunization’ after ‘public health emergency’,
This is interesting…
When read carefully, the Rescue Plan provides that an employee can take EFMLA for the following reasons:
- To care for a child under the age of 18 if their school has been closed.
- To care for a child under the age of 18 if their place of care has been closed.
- To care for a child whose child care provider is unavailable due to a public health emergency.
- Any reason under 5102(a) [FFCRA] (See last blog that outlines the FFCRA Reasons)
- The employee is seeking or awaiting the results of a diagnostic test for, or a medical diagnosis of, COVID-19 and such employee has been exposed to COVID-19 or the employee’s employer has requested such test or diagnosis, or
- The employee is obtaining immunization related to COVID–19 or recovering from any injury, disability, illness, or condition related to such immunization’ after ‘public health emergency
NOTE: The last three bullet points broaden this EFMLA tremendously. Essentially, it allows employees to take EFMLA leave for all of the reasons that they could take Paid Sick Leave. Once the Rescue Plan becomes law, EFMLA will allow employers to provide paid leave and take a tax credit for leave not to just care for one’s child, but also a family member, or the individual themself.
The Rescue Plan instructs the DOL to proffer regulations. We can anticipate regulations to clarify this amendment and hopefully explain the relation between Paid Sick Leave and the EFMLA. As written today, an employee could be eligible for Paid Sick Leave and EFMLA. Employers should consult with counsel to distinguish these unclear issues..
(1) EMPLOYEES DO NOT NEED TO WAIT 10 DAYS TO OBTAIN EFMLA
As discussed in my previous blog on the Emergency Family Medical Leave, the FFCRA originally provided that the first 10 days of the EFMLA leave would be unpaid (unless their qualifying reason for EFMLA was also a qualifying reason for Paid Sick Leave).
Interestingly, the Rescue Plan strikes that language from the statute. So what does this mean? This means that employees can take EFMLA leave immediately and get paid 2/3 the regular rate of pay, without having to take 10 days of unpaid EFMLA.
(2) TAX CREDIT THRESHOLD INCREASED
The FFCRA originally provided that an employer is not required to pay more than $200 per day or $10,000 in the aggregate. The Rescue Plan increases the aggregate threshold to $12,000. The daily $200 threshold remains.
EMPLOYERS TAKE NOTE
The Rescue Plan is clear: Employers who decide to extend the FFCRA leave in 2021, must abide by all facets of the Act. This means, in order to obtain the tax credit, employers must be sure to obtain all necessary documentation from their employees.
WHAT DOES THIS MEAN?
At this juncture, pre regulations, EFMLA is greatly expanded. This expansion allows employers to provide paid leave and receive a tax credit. Employers should assess whether they are extending the EFMLA leave in advance of the bill becoming law.
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