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The Impact of the COVID-19 Stimulus Bill on FFCRA and California SPSL

On April 1, 2020, the United States Department of Labor (“DOL”) announced the passage of the Emergency Paid Sick Leave Act and Emergency Family and Medical Leave Expansion Act, both part of the Families First Coronavirus Response Act (“FFCRA”). The FFCRA required employers with 500 or fewer employees to provide their eligible employees with emergency paid sick leave and expanded family and medical leave for specified reasons related to COVID-19 – as discussed in our previous blog. However, these paid leave provisions expired on December 31, 2020.

The FFCRA helped mitigate the effects of COVID-19 in the workplace by reimbursing covered employers with tax credits for the cost of providing employees with paid leave taken for specified reasons related to COVID-19. The FFCRA enabled employers to keep their workers on their payroll, while at the same time ensuring that workers were not forced to choose between their paychecks and the public health measures needed to combat the virus.

What Happens to Paid Leave Under the FFCRA After December 31, 2020?

In late December 2020, Congress agreed on a new $900 billion coronavirus relief bill (the “Bill”) that provided clarity as to whether the paid leave provisions under the FFRCA will extend into 2021. The current version of the legislation (signed by President Trump on December 27, 2020) results in the following:

  • Required paid leave under FFCRA ended on December 31, 2020.
  • As of January 1, 2021, covered employers may voluntarily provide emergency paid sick leave or expanded family and medical leave under FFCRA to continue receiving the tax credit benefits associated with this leave. The tax credit may only be taken for leave through March 31, 2021.

Therefore, effective January 1, 2021, paid leave under the FFCRA will no longer be required. Covered employers who voluntarily provide paid leave benefits under the FFCRA through March 31, 2021, will remain eligible to receive tax credits for the paid leave. It should be noted, the Bill does not seem to provide a new set of tax credits or leave. In other words, if an employee has already taken 80 hours of emergency paid sick leave in 2020, then the employee would not be entitled to new emergency paid sick leave in 2021. With respect to the expanded family and medical leave provisions, presumably, if the employer’s 12-month period for FMLA resets under the employer’s policy, the employee would be entitled to paid FMLA again. It is not clear whether that was the DOL’s intent or whether future guidance will provide otherwise.

How Does the Bill Impact California’s Supplemental Paid Sick Leave?

Although larger employers, with 500 or more employees, were not governed by the FFCRA, California enacted its own supplemental paid sick leave law (“CA SPSL”) to account for time off due to COVID-19-related reasons for such larger employers. In California, covered employers are required to provide SPSL to their eligible employees through: (i) December 31, 2020, or (ii) an extension of the FFCRA. It does not appear the paid leave provisions under the new federal Bill, given its voluntary nature, would constitute as an “extension.” Therefore, absent further guidance or a statutory extension of the CA SPSL by state lawmakers, it appears covered employers will no longer be required to provide paid sick leave under the CA SPSL to their eligible employees after December 31, 2020.

Employer Takeaways

  • Under the FFCRA, covered employers were only required to provide paid leave until December 31, 2020.
  • Effective January 1, 2021, covered employers under FFCRA may voluntarily provide paid leave to take the tax credit associated with this leave through March 31, 2021. Covered employers should be mindful that employees who have previously used, or exhausted emergency paid sick leave under the FFCRA are not eligible for additional leave. Such employers who voluntarily provide paid leave under the FFCRA until March 31, 2020 should update communications to employees to reflect that the expiration date is now March 31, 2021. We recommend this be done in an updated addendum to the Employee Handbook.
  • While covered employers under the FFCRA are no longer required to provide paid leave under federal law as of January 1, 2021, they should remain mindful of other paid leave requirements under state and local laws (e.g., San Francisco, Oakland, San Jose, and San Mateo have all enacted supplemental paid sick leave ordinances).
  • In California, while employers with more than 500 employees were only required to provide paid sick leave under the CA SPSL through December 31, 2020, it is possible it will be extended, though it has not been extended yet. Keep an eye out on this.

Contact Garcia & Gurney today

We will continue to monitor the situation and post updates as soon as more information is released.  If you have any questions or would like guidance on how to proceed feel free to contact us.

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