Extension of FFCRA Tax Credit
Last week, President Joe Biden signed the American Rescue Plan Act of 2021. The Act extends the $300.00 per week federal unemployment benefits through September 6, 2021.
Additionally, the Families First Coronavirus Response Act (FFCRA) has been extended through September 30, 2021.
Last year, employers with fewer than 500 employees were required to provide paid leave to employees covered by the FFCRA. The mandate expired on December 31, 2020 and paid leave under the FFCRA became voluntary; employers who chose to continue offering these benefits would be eligible to receive certain tax credits through March, however this has now been extended until September 30th. .
Employers who choose to offer the voluntary FFCRA benefits should be aware of the expanded provisions. To encourage testing and vaccination, there are now two additional reasons that employees can qualify for leave under the FFCRA; effective April 1, 2021:
“Employee is seeking or awaiting the results of a diagnostic test for, or a medical diagnosis of, COVID-19 and such employee has been exposed to COVID-19 or the employee’s employer has requested such test or diagnosis”
“The employee is obtaining immunization related to COVID-19 or recovering from any injury, disability, illness, or condition related to such immunization.”
Effective April 1, 2021, the Act “resets” EPSL balances to zero under the FFCRA. This means employees get a new entitlement of 10 days of EPSL from April 1, 2021 through September 30, 2021, even if they used all their EPSL (or had EPSL remaining) at any time before April 1, 2021. For the 10 days of EPSL, employees will receive either 100% (max of $511/day) or two-thirds (max of $200/day) of pay, depending on the reason for leave. As of Day 11 (when EFML begins), employees receive two-thirds of their pay with a max of $200/day.
Last, the Act also increased the number of weeks of paid family leave available (Expanded Family & Medical Leave or EFML) to employees under the FFCRA from 10 weeks to 12 weeks (in addition to the two weeks of Emergency Paid Sick Leave (EPSL) available to eligible employees). It increases the limit on the tax credit for EFML wages, allowing the credit on up to $12,000.00 in paid family leave wages (currently, the tax credit for EFML is limited to $200.00 per day, and $10,000 total per employee).
For more information, please contact us.
CDF Labor Law