CARES Act Update and 2021 Predictions
by Sarah Stuart
Just prior to the end of the year, Congress provided new economic relief in response to the COVID-19 pandemic that modified the mandates and benefits available for employers and employees alike through the CARES Act. We look here to what expired and what was extended from two key programs—leave through the Families First Coronavirus Response Act (FFCRA) and expanded unemployment insurance benefits.
Voluntary FFCRA Leave
Significantly, the new relief package did not mandate an extension of the FFCRA into 2021—meaning employers are no longer mandated to provide emergency paid sick leave or expanded family and medical leave for COVID-19 related reasons. As a compromise, Congress extended the employer payroll tax credit through the first quarter of 2021 for any leave voluntarily provided under the same provisions as the FFCRA. Simply put, while the FFCRA is no longer mandated, employers may voluntarily continue to offer paid sick leave and expanded FMLA leave and obtain full reimbursement by taking advantage of the payroll tax credit through the first quarter of this year.
Without the obligation to continue to provide paid leave, employers may wonder whether to provide any leave entitlement to their employees. Employers considering whether to take advantage of the voluntary tax credit in the first quarter of 2021 for paid leave should consider a few key issues:
- Time taken under voluntary FFCRA leave in the first quarter of 2021 will not count toward the employee’s federal FMLA entitlement.
- For the payroll tax credit, an individual’s maximum entitlement to paid leave remains 80 hours paid sick leave and 10 weeks of expanded FMLA between April 2020 through March 2021. No additional tax credit is available for leave provided to individual employees that exhausted FFCRA leave in 2020.
- Regardless of whether the employer opts into paid leave, federal and state obligations remain, including considering whether the employee otherwise qualifies for FMLA leave or may be eligible for accommodations for lingering symptoms under the Americans with Disabilities Act.
- Employers will need the same documentation for reimbursement for voluntary FFCRA leave as under the mandatory FFCRA leave.
The Department of Labor has cautioned employers to ensure payment is made on any wages owed on all FFCRA leave from April 1, 2020 through December 31, 2020. Employees that are out on FFCRA leave should receive clear communication if the employer is going to decline to opt into the voluntary refundable employer payroll tax credit in the first quarter of 2021.
Finally, employers should consider that opting into voluntary FFCRA leave will assist in avoiding spread of COVID-19 in the workplace and assist employees in recuperating and safely returning to work, particularly as COVID-19 cases continue to rise and many school programs return to or remain virtual.
Unemployment Insurance Programs
In the new stimulus package, the federal government also extended previous supplemental unemployment benefits. Specifically, the bill authorized an additional 11 weeks of unemployment eligibility, through March 14, 2021. The CARES Act previously provided an extra 13 weeks of unemployment eligibility through December 31, 2020, ordinarily capped at 26 weeks per 12 month period. Thus, claimants who have exhausted unemployment insurance benefits in 2020 will have an additional 11 weeks of benefits available to them in 2021.
The bill also authorized a federal supplement of $300 per week in unemployment benefits in addition to state benefits, at no cost to employers. Finally, the bill extended through March 14, 2020 the Pandemic Unemployment Assistance (PUA) program, which has temporarily expanded regular eligibility for unemployment insurance to self-employed workers, independent contractors, part-time employees, and other individuals who are unavailable to work due to “COVID-19 related reasons.” These provisions are simply an extension of the prior expanded eligibility rules for unemployment benefits under the CARES Act.
Possible Upcoming Developments
With the administration change in the federal government, we anticipate that additional changes and legislation for economic assistance may develop. For example, the new Congress will likely take up the matter of additional stimulus payments directly to qualifying individuals, and we will likely see legislation extending unemployment benefits further. Bipartisan consensus is also developing around requiring employers to accommodate pregnant employees by, for example, providing more frequent breaks, and creating a national paid leave program similar to the FFCRA. Changes to the makeup of federal agencies like the EEOC and the NLRB are already taking place, with the resulting rollback of previous positions in favor of ones that are more employee- and union-friendly. We can also expect the Department of Labor to go back to the drawing board on regulations defining who is a joint employer and who is an independent contractor.
As always, the attorneys at Burch, Porter & Johnson, PLLC will keep you informed of new developments in employment and labor law.