On December 28, 2020, President Trump signed into law a $2.3 trillion dollar Omnibus Spending Bill. The massive Omnibus Spending Bill contains several Acts, including the Continued Assistance to Unemployed Workers Act (“CAUWA”), mainly focusing on the expansion of federal unemployment relief and worker entitlements.
One of the highlights of CAUWA is the extension of the Families First Coronavirus Response Act (“FFCRA”) tax credit for employers through March 2021, without a corresponding extension of the mandated leave entitlements. When FFCRA was first enacted, it required employers with 500 or fewer employees to provide both paid sick leave (“EPSL”) and paid family medical leave (“EFMLA”) in specific COVID-19 related circumstances. Employers were then eligible for a dollar-for-dollar tax credit on amounts paid under the EPSL and EFMLA mandates. FFCRA’s tax credit and mandate were set to expire on December 31, 2020.
As noted above, the CAUWA now gives employers the option to provide EPSL and EFMLA benefits and claim the dollar-for-dollar tax credit. Employers should be mindful that the extension of the tax credit does not seem to renew the EPSL time off entitlements. Therefore, an employee who used all available EPSL time prior to December 31, 2020 would likely not be eligible for additional time off between January 1, 2021 and March 31, 2021 and the employer would likely not be eligible for a tax credit for additional hours taken.
On the face of the legislation, the EFMLA entitlements also do not seem to be extended. However, the creation of EFMLA is tied to the existing FMLA structure giving rise to some concern that the EFMLA entitlements may reset if an employer’s underlying FMLA policy has also reset. At this time, no guidance has been issued by the DOL or IRS on this point.
Employers who choose to extend the available FFCRA benefits should consider if they will offer only EPSL or EFMLA or both. Any decision to extend one or both of the FFCRA benefits must apply to all employees.
Other benefits provided under CAUWA are extensions of Pandemic Unemployment Assistance, Federal Pandemic Unemployment Compensation (with a reduction in the weekly benefit from $600 to $300), and Pandemic Emergency Unemployment Compensation. These extensions are effective through March 14, 2021; however, in limited circumstances some eligible individuals may be able to extend their benefits through April 5, 2021. CAUWA also clarifies that business expenses paid with Paycheck Protection Program (“PPP”) funds are still eligible to be claimed on tax returns.
Any employer seeking to craft a policy to address the FFCRA benefits should consult with their legal team. The Labor and Employment team at Carmody is here to assist with these questions and any other employment questions your business may have.
Stephanie E. Cummings practices with Carmody’s Labor and Employment team and has experience in a variety of additional areas such as corporate law, personal injury, real estate, trust and estates and general civil litigation.
This information is for educational purposes only to provide general information and a general understanding of the law. It does not constitute legal advice and does not establish any attorney-client relationship.