The Consolidated Appropriations Act and Its Implications on Paid Leave

By Susie Cirilli, Offt Kurman

On 27 December 2020, President Trump signed the Consolidated Appropriations Act, which was passed by Congress on 21 December 2020. This Act has major implications, as it allows certain US employers to allow the federal paid leave to expire on 31 December 2020.

Quick Background

The Families First Coronavirus Response Act (“FFCRA”) required employers with less than 500 employees to provide two types of paid leave for employees: Emergency Paid Sick Leave and Emergency Family Medical Leave.

Emergency Paid Sick Leave

The Emergency Paid Sick Leave requires US employers with less than 500 employees to provide up to two (2) weeks of full paid sick leave to employees for any of the following reasons:

  1. Subject to a federal, state, or local quarantine or isolation order related to COVID-19;
  2. Been advised by a health care provider to self-quarantine due to concerns related to COVID-19;
  3. Experiencing symptoms of COVID-19 and seeking a medical diagnosis;
  4. Caring for an individual who is subject to a federal, state, or local quarantine or isolation order related to COVID-19;
  5. Caring for an individual who has been advised by a health care provider to self-quarantine due to concerns related to COVID-19;
  6. Caring for a son or daughter if the school or place of care of the son or daughter has been closed, or the childcare provider of such son or daughter is unavailable, due to COVID-19 precautions;
  7. The employee is experiencing any other substantially similar condition specified by the Secretary of Health and Human Services in consultation with the Secretary of the Treasury and the Secretary of Labour.

Emergency Family  Medical Leave

The Emergency Family Medical Leave requires employers with less than 500 employees to provide employees with paid leave (2/3 the regular rate of pay) for any of the following reasons:

  1. Care for the son or daughter under 18 years of age of such employee if the school has been closed due to a Public Health Emergency.
  2. Care for the son or daughter under 18 years of age of such employee if the Place of Care has been closed due to a Public Health Emergency.
  3. The Child Care Provider of such son or daughter is unavailable due to a Public Health Emergency.

Employers who provided this leave would get a tax credit for the monies paid out in leave.

Sunset Provisions

Both statutory leaves had a sunset provision of 31 December 2020. In other words, according to the Paid Sick Leave Act, and the Emergency Family Medical Leave Expansion Act, as written, these leaves are not available come 01 January 2021.

Consolidated Appropriations  Act, 2021

The Consolidated Appropriations Act (“Stimulus”) addresses the tax credit and the sunset provisions of the Paid Sick Leave and the Emergency Family Medical Leave (collectively “COVID Leave”).

Paid Sick Leave

The Stimulus states that the Paid Sick Leave Act ceases to be mandatory for all covered employers (less than 500 employees) on 01 January 2021. However, businesses can choose to provide Paid Sick Leave and receive the tax credit through 31 March 2021.

Let’s break it down.

  1. All covered employers must abide by the Paid Sick Leave Act through 31 December 2020. Any leave provided to employees through 31 December 2020, will get reimbursed through a tax credit.
  2. Now, starting 01 January 2021, employers can choose if they want to provide Paid Sick Leave, as defined by the Paid Sick Leave Act. If the employer chooses to provide the Paid Sick Leave, then they will receive a tax credit on money paid for the leave through 31 March 2021. (NOTE: Employers who choose to provide the leave through 31 March 2021, must abide by every section of the Paid Sick Leave Act to get the tax credit.)
  3. Carry-Over – At this juncture, it does not appear that Employers who decide the extend the Paid Sick Leave in 2021 need to offer employees an additional two weeks of Paid Sick Leave in the New Year. As we know, the Paid Sick Leave Act was set to completely expire on 31 December 2021. Section 5102(b)(3) of the Paid Sick Leave Act explicitly stated that Paid Sick Leave would not carry over from one year to the next.

However, Section 286 of the Appropriations Act strikes that provision for employers who choose to extend the leave period. This means that employees who work for a company that extends the Paid Sick Leave Period through 31 March 2021, can carry-over their Paid Sick Leave from 2020. The Act is silent on whether employers must or may provide any additional leave for the employees who may have exhausted their Paid Sick Leave in 2020.

This is a big deal. This means that starting 01 January 2021, US businesses are not required to provide Paid Sick Leave for employees. While Employers can provide this leave and get the tax credit through 31 March 2021, it is completely optional. So, if any employee gets COVID in the New Year, their employer is not required to provide paid leave.

NOTE: There are some states that have state-specific COVID leave laws. This means that, regardless of the federal law, state laws can still require paid leave. Prudent employers should consult with counsel to ensure compliance with state leave laws.

Emergency Family Medical Leave

The Stimulus states that the Emergency Family Medical Leave also ceases to be mandatory for all covered employers (less than 500 employees) on 01 January 2021.

However, businesses can choose to provide Emergency Family Medical Leave and receive the tax credit through 31 March 2021.

This means that:

  1. All covered employers must abide by the Emergency Family Medical Leave through 31 December 2020. Any leave provided to employees through 31 December 2020 will be reimbursed through a tax credit.
  2. Now, starting 01 January 2021, employers can choose if they want to provide Emergency Family Medical Leave as defined by the Emergency Family Medical Leave Act. If the employer chooses to provide the Emergency Family Medical Leave, then they will receive a tax credit on money paid for the leave through 31 March 2021. (NOTE: Employers who choose to provide the leave through 31 March 2021, must abide by every section of the Emergency Family Medical Leave Expanded Act to get the tax credit.) Just as explained above, this is a huge deal. This means that starting 01 January 2021, businesses are not required to provide Emergency Family Medical Leave for employees. Employers can provide this leave and get the tax credit, through 31 March 2021. However, providing the federal Emergency Family Medical Leave from 01 January through 31 March 2021, is completely optional. It follows that if an employee needs to take time off for COVID-related childcare issues, employers are not required to provide them with paid time off.

What Does This Mean for Employers

Employers need to assess what makes sense for their business in 2021. Employers can provide one leave over the other for the period of 01 January 2021 through 31 March 2021. For instance, an employer can opt-in to continue providing Emergency Family Medical Leave through 31 March 2021, and not continue the Paid Sick Leave, and vice versa. Of course, employers can choose to continue both COVID leaves through 31 March 2021. Regardless of whether a company decides to continue the leave through 01 January 2021 or 31 March 2021, it is imperative that businesses plan for the New Year. Prudent employers must:

  • Identify the state leave laws for the localities where their employees are working. Many employers have gone almost completely virtual, which resulted in employees living in various jurisdictions and working remotely. It is crucial for these companies to assess the local state leave laws where their employees reside (and thereby work). As mentioned above, there are many states and cities that have their own local sick leave laws that incorporate COVID leave.
  • Prepare a leave policy that is workable for conducting business beyond whichever date the employer decides to cease the federal paid leave.

Businesses should consult with counsel to ensure that leave policies are being implemented in a non-discriminatory way.


Susie Cirilli

Susie Cirilli

GGI member firm
Offt Kurman
Law Firm Services
More than 10 offces throughout the US
T: +1 267 338 1376
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Published: GGI Insider, No. 111, January 2021 l Photo: Georgii - stock.adobe.com

 

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