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Congress Extends FFCRA Paid Leave Tax Credits.

Congress Extends FFCRA Paid Leave Tax Credits

December 23, 2020

In our last E-Alert, we reminded you that, absent any last-minute action by Congress, the mandated paid sick leave and expanded paid FMLA were both scheduled to expire on December 31, 2020.  With that expiration the tax credits available to employers to cover the cost of the mandated paid leave would also lapse.

As expected, Congress did not extend the requirement that employers provide paid sick leave and expanded paid family medical leave benefits.  However, as part of the final bill sent to President Trump, and which is still awaiting his signature, Congress did extend the availability of tax credits for employers who voluntarily provide the FFCRA paid sick leave and/or expanded paid family medical leave.  Employers that voluntarily offer the previously mandated COVID-related paid sick leave and/or expanded paid family medical leave to parents caring for children whose school or childcare facilities are closed, will be entitled to a payroll tax credit for wages paid as a result thereof  through the first quarter of 2021.  Please note that the extension of tax credits through the first quarter of 2021 does not include an expansion of the amount of paid leave available to employees.  The tax credit will not be available to employers for paid leave to employees who have already exhausted their available COVID-19 related sick leave or parental FMLA leave.  Of course, all of the above is contingent on President Trump signing the bill into law.  Although the bill sailed through both houses of Congress with veto-proof majorities the first time, it is unclear what will happen in the event of a presidential veto.

As noted in our prior E-Alert, all employers should be mindful of state mandated paid leave laws.  Please contact Peter Bennett (pbennett@thebennettlawfirm.com) or Rick Finberg (rfinberg@thebennettlawfirm.com) with any questions regarding paid leave and available tax credits.

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