“What really mattered last week?” we like to ask here at Ramseur Maultsby, LLP.
Last week, veto threats and overrides finally ended with a coronavirus relief package. This time, however, Congress omitted and did not extend a key provision of 2020’s CARES Act package of laws–paid leave for Covid-related reasons under the Families First Coronavirus Response Act. Under the FFCRA, employers of fewer than 500 employees (you know who you are) owed pay to employees if they were out of work for one of several reasons. The most common reasons were Covid-positivity (theirs or an immediate family members’ under their care) and school closure forcing the employee-parent to be home. The law required such pay through December 31, with ways for employers to recoup what they spent by deducting it from their tax bills.
All done. Congress specifically decided not to extend the pay requirements into 2021.
Going forward, though, employers may elect to pay employees for leave that would have been required under the FFCRA and still collect the tax reimbursement for that leave, through March 31, 2021. But, to do so, the whole program must be extended and made available to all employees who would have qualified in 2020. Employers cannot pick and choose when to grant paid leave and when to withhold it.
Likewise, employers who elect not to extend the FFCRA program, cannot then seek a tax reimbursement when an employee gets paid while absent for reasons that would have qualified for FFCRA pay. Say an employer does not extend the program and an employee, sick in January with Covid, uses standard paid sick leave (or vacation days) to cover the time away from work. Even though the employee presents a situation the FFCRA covered, and even though the employer gives the employee paid leave, the employer acts under its regular paid time-off policies, not under the FFCRA. Therefore, the employer cannot recover that pay through a tax reimbursement.
So, what do you want to do as an employer?–because you can choose. Extend or do not extend? Obviously, benefits are popular with employees, and the government has helped offset some of the costs with the tax reimbursement. On the other hand, the leave rule was creating pockets of abuse and was pressuring companies to juggle duties among workers. There is no one right answer that applies to everyone.
But at least you have the choice.