On Dec. 21, 2020, Congress passed the Consolidated Appropriations Act, 2021 (the Act), which provides additional COVID-19 relief to individuals and businesses. The Bill does not extend the mandatory Families First Coronavirus Response Act (“FCRA”) leave. The FFCRA “sunsets” on December 31, 2020.
Importantly, the FFCRA only applied to employers with fewer than 500 employees. The FFCRA provided for emergency paid leave in certain circumstances from April 1, 2020 through December 31, 2020. Private-sector employers were generally afforded a tax credit equal to the value of the paid leave required under the FFCRA. The tax credit did not apply to the federal government, the government of any state (or political subdivision thereof), or any agency or instrumentality of any of the foregoing. School districts were included in the exclusion category. Governmental employers were given limited relief in the form of not requiring governmental employers to pay the 6.2% employer share of Social Security taxes on the FFCRA paid leave.
As of January 1, 2021, covered private employers may voluntarily provide emergency paid sick leave or emergency paid FMLA Leave under FFCRA (as adopted earlier this year) and take the tax credit associated with this leave. The tax credit may only be taken for leave through March 31, 2021. If the bill is signed, it is anticipated that guidance will be issued from the Department of Labor as to whether the limited relief in social security tax payments will be extended to governmental employers who voluntarily extend the period for use of emergency paid sick leave and emergency paid FMLA leave under FFCRA.