On Sunday, December 27, 2020, President Donald Trump officially signed into law Congress’ most-recent major stimulus package, aimed at blunting the continuing economic effects of on-going COVID-19 pandemic. Earlier this year, Congress passed a larger series of similar measures, including the $2.2 trillion Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), as well as $104 billion Families First Coronavirus Response Act (“FFCRA”). This most recent stimulus package totals $900 billion, and was signed in conjunction with a separate $1.4 trillion government funding bill.
The December 2020 stimulus package provides continued funding for a wide range of governmental assistance programs initiated earlier this year—including the Paycheck Protection Program and expanded unemployment assistance. One question most HR and employment professionals had concerning the December 2020 stimulus package was what, if any, impact it would have on the fate of the FFCRA.
The Families First Coronavirus Response Act (FFCRA)
Signed into law on March 18, 2020, the FFCRA contained two principal mandates: (1) the establishment of new, paid sick leave rights for workers impacted by COVID-19 and those serving as caregivers for others with COVID-19; and (2) the establishment of new, enhanced leave entitlements under the Family Medical Leave Act (FMLA), including limited paid leave rights. Over the past nine months, human resources professionals have worked hard to interpret and implement these new leave provisions.
The December 2020 Stimulus Package’s Impact on the FFCRA
One key feature of the FFCRA was the fact that it was set to automatically expire on Thursday, December 31, 2020. Many experts felt that Congress would use the December 2020 stimulus package as an opportunity to extend the obligations/benefits of the FFCRA. However, the final text of the December 2020 stimulus package does not extend the paid sick leave and paid family and medical leave requirements of the FFCRA. Therefore, an employer’s obligation to provide paid leave under the FFCRA will cease at the end of the year. (Note: It is possible that the employee could be entitled to normal unpaid leave under the FMLA even after the FFCRA expires, if they still have weeks available under the FMLA.)
Congress did take the opportunity to extend the tax credit contained for both the Emergency Paid Sick Leave and the Emergency Family and Medical Leave contained within the FFCRA. So, while employers are not required to provide paid leave under the FFCRA after December 31st, if they voluntarily elect to do so (and assuming covered employees have eligible leave remaining), these employers can continue to claim the payroll tax credit for those payments through March 31, 2021.
Despite Congress’ decision not to extend the FFCRA with the December 2020 stimulus package, we strongly encourage employers to continue to monitor this issue into early 2021, as President-elect Biden has already discussed plans to pass an even larger stimulus package once both he and the “new” Congress take office. It is possible that this legislation could expand/enhance the FFCRA.