Within the past few days, employers now have greater clarity on whether they will be required to provide their employees emergency paid sick and paid FMLA leave.
The latest news boils down to this:
Employers with 500 or more employees: Breathe easy – it seems apparent you will have no federal mandate to provide paid leave.
Employers with fewer than 500 employees: Think status quo.
What’s the Update?
This past weekend, the U.S. House of Representatives again plugged away at emergency paid sick leave for American workers by passing a slimmed-down portion of the American Rescue Plan.
In the end, the House modified and extended the payroll tax credits for employer-provided paid sick and paid FMLA leave. But don’t mistake my use of the term “modified” here to suggest significant changes are on the way. On the contrary, Congress is poised to simply extend FFCRA leave provisions on a voluntary basis, just as we have now.
The version passed by the House includes the following:
- FFCRA leave continues to apply only to employers with fewer than 500 employees.
- Continues FFRCA solely as a tax credit program. Employers are not required to provide paid sick and FMLA leave, but if they do within the parameters of FFCRA, they would be entitled to tax credits.
- Extends employer payroll tax credits for paid sick and paid FMLA leave through September 30, 2021.
- Provides a new 10-day bucket of emergency paid sick leave starting April Fools’ Day 2021.
- Expands the paid sick and paid FMLA tax credits to allow for leave taken to obtain a COVID-19 vaccine or recover from any injury, disability, illness, or condition related to the COVID-19 vaccine.
- Expands the definition of qualifying paid family leave to allow family leave payroll tax credits to be claimed for all qualifying uses of paid sick time, including for leave provided if the employee is subject to a quarantine or isolation order due to COVID-19 or is caring for someone in a similar situation.
- Increases the limit on the tax credit for paid family leave wages, allowing the credit on up to $12,000 in paid family leave wages. (Currently, the tax credit for paid FMLA is limited to $200 per day, and $10,000 total per employee.)
- Adds a nondiscrimination rule to the paid leave payroll tax credits, establishing that employers could not claim the tax credits if paid leave provided to employees discriminates in favor of highly compensated employees or full-time employees, or discriminates on the basis of employment tenure with the employer.
- Currently, government employers, including state and local government employers, are not allowed to claim paid leave payroll tax credits. The House’s version would provide that certain state and local governments, as well as 501(c)(1) federal government entities, are tax-credit eligible.
Early this week, the Congressional Research Service (CRS) released an 18-page report outlining the provisions of the House version, including the FFCRA leave provisions. As always, my colleague, Sebastian Chilco, kept me up to speed on what was contained within the House bill. (Thanks, Sebastian, and everyone within our Littler Workplace Policy Institute!)
The Senate is taking up the American Rescue Plan this week, so we will know within the upcoming week what the final FFCRA package looks like.
Jeff Nowak is a Partner at the law firm of Littler Mendelson and has been named as one of Illinois’ top “40 Attorneys Under 40” to watch in 2012. Jeff is widely recognized as one of the nation’s foremost FMLA and ADA experts, regularly counseling clients on compliance with FMLA and ADA regulations, conducting FMLA/ADA audits and training, and successfully litigating FMLA and ADA lawsuits. Jeff is the author of the highly regarded FMLA Insights blog, which has been selected for four consecutive years by the ABA Journal as one of the top 100 legal blogs (2011-2017) and was also voted the No. 2 Labor and Employment blog by LexisNexis.
The above article first appeared in FMLA Insights and is reprinted with Jeff’s permission.