COVID-19 What Businesses Need to Know Update No. 36

FFCRA Extended Through September 30, 2021

The Families First Coronavirus Response Act (FFCRA) went into effect on April 1, 2020, with a built-in sunset provision of December 31, 2020. The Act was later extended through March 31, 2021. As explained below, it has now been extended again, through September 30, 2021.

Generally, the FFCRA requires employers with less than 500 employees to:

• Provide up to eighty hours paid sick leave at the employee’s regular rate of pay where an employee is quarantined and/or experiencing COVID-like symptoms and seeking a medical diagnosis; OR
• Provide up to eighty hours of paid sick leave at two-thirds the employee’s regular rate of pay due to a bona fide need for the employee to care for a qualified individual (this includes a child whose school or place of daycare is closed for reasons related to COVID-19).

Additionally, a covered employer must provide an extra ten weeks of paid expanded family and medical leave at two-thirds the employee’s regular rate of pay where an employee is unable to work due to a bona fide need to care for a child whose school is closed for COVID-related reasons.

On January 1, 2021, FFCRA paid leave became optional to employers, however, continued participation earned an employer tax credits for payments made to employees on leave for qualifying reasons. An eligible employer is entitled to a fully refundable tax credit equal to the required paid sick leave and the employer’s share of Medicare tax imposed on those wages. In California, concurrent Cal-OSHA requirements regarding paid leave due to COVID exposure in the workplace have resulted in many employers opting into FFCRA for the continued dollar for dollar tax breaks.

The recent American Rescue Act Plan of 2021 included language extending the FFCRA as an option for eligible employers through September 30, 2021. See DDWK Update No. 35  for more details on the available relief. Any employer that voluntarily pays for FFCRA benefits during this time frame will receive tax credits. Employers need to be aware that opting in will broaden the scope of the FFCRA’s qualifying reasons. Specifically, in addition to the above reasons, FFCRA leave is now available to:

• Employees unable to work because they are obtaining a COVID-19 vaccine, or are recovering from the side effects of receiving the vaccine; OR
• Employees unable to work because they are seeking or waiting for the results of a diagnostic test or awaiting a medical diagnosis.

Additionally, the FFCRA increased the number of weeks available to employees for paid leave from ten to twelve, and resets employees’ FFCRA sick leave rights to zero on April 1, 2021. This means if an employee took FFCRA leave prior to April 1, 2021, it does not count against a right to take leave thereafter.

Employers should decide whether continuing to provide FFCRA leave is right for them. Some may not, for fear of employees exploiting the benefit. Others may choose to encourage employees to stay home and quarantine in the event of a COVID-19 exposure, placing priority on safety in the workplace and tax relief.