Labor Secretary Will Face These Challenges shrm.org - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from shrm.org Daily Mail and Mail on Sunday newspapers.
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Extension of Credit for Paid Leave Provided When There Is No State or Local Law Mandating Such Paid Leave
The Consolidated Appropriations Act, 2021 (the “Act”) amended many provisions. It amended the employer credit under code section 45S(i), which provides a credit to an employer for providing paid family and medical leave to employees who are not eligible for the federal Family and Medical Leave Act. The credit ranges between 12.5% and 25% of the amount paid towards a paid leave. This is a tax credit added by the Tax Cuts and Jobs Act (TCJA), and it does not count paid leave that was mandated by any state or federal government. It does not apply to an employer who is subject to the federal Family and Medical Leave Act. It applies to employees who have been employed for one year or longer, and who in the preceding year had not had compensation greater than 60% of the highly compensated employee compensation limit for
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Though employers have been enforcing their COVID-19 Preparedness and Response Plans for many months, recent legislation and public health guidance necessitate an update and provide some unexpected room for employer discretion.
The sources of change:
The Centers for Disease Control and Prevention (“CDC”) empowered local and state public health agencies to endorse shortened quarantine periods;
Enrolled Senate Bill 1258 amended Enrolled House Bill 6032, adjusting Michigan law to permit employers to take advantage of the shortened quarantine and isolation periods and loosening the close contact screening inquiry; and
The Consolidated Appropriations Act, 2021, extended the availability of the payroll tax credit to employers who continue to approve paid leaves of absence for the reasons described in the Families First Coronavirus Response Act (“FFCRA”).
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The Families First Coronavirus Response Act (FFCRA) established two limited federal mandates to protect employees of employers with fewer than 500 employees who needed to be absent from work for reasons related to the COVID-19 pandemic. The Emergency Paid Sick Leave Act mandated two weeks of paid sick leave under various circumstances, and the Emergency Family and Medical Leave Expansion Act mandated an additional 10 weeks of partially paid leave to care for children whose school or daycare arrangements were disrupted due to the pandemic. The federal government fully subsidized the payments required under these programs through tax credits or tax refunds. Both laws were set to expire December 31, 2020.
Wednesday, December 30, 2020
On December 27, 2020, President Donald Trump signed into law House Bill 133, an expansive spending bill that provides economic relief, extends unemployment insurance benefits, and expands the Coronavirus Aid, Relief, and Economic Security Act’s Paycheck Protection Program.
The bill
did not extend the mandatory paid leave provisions of the Families First Coronavirus Response Act’s (FFCRA) Emergency Paid Sick Leave Act (EPSLA) and Emergency Family and Medical Leave Expansion Act (EFMLA), both of which will expire on December 31, 2020. However, the bill does provide employers the
option to continue providing FFCRA leave and receive a tax credit through March 31, 2021.
Stated more simply, employers may choose to continue providing paid leave to employees consistent with the FFCRA requirements and claim related tax credits until March 31, 2021, but employers are not required to do so.