Employer Option for Extended Government Reimbursement of COVID-19 Paid Leave Under the Families First Coronavirus Relief Act

January 16, 2021

Last week’s federal stimulus legislation contains a little noted option for employers to continue to receive full government reimbursement for qualifying COVID-19 sick pay to employees through the end of March 2021. The first coronavirus stimulus statute, the March 2020 Families First Coronavirus Relief Act (“FFCRA”), mandated that employers provide, through December 31, 2020, up to two weeks of paid time off for several qualifying COVID-19 employee absences from work and up to twelve weeks paid leave due to COVID-19 school or child care provider closures. Our past articles on the specifics of that law can be found here. The most recent stimulus statute permits, but does not require, employers to continue to provide FFCRA pay during the first three months of 2021. Employers who choose to do so qualify for full government reimbursement of the employer’s cost of the pay (plus the employer’s pro rata cost of employee health insurance coverage during these COVID-19 sick or child care days). Per the FFCRA, qualifying pay is reimbursed by employers deducting the amount from their federal payroll tax submissions to the U.S. Treasury (if, in the unusual situation, the tax submission otherwise due is less than the qualifying sick or child care COVID-19 paid leave, the I.R.S. will send the employer a check for the difference).

The new law does not increase the amount of paid sick leave an employee is entitled to receive under the FFCRA; rather, only the time in which it is available is extended through the first quarter of 2021 (i.e., employers can only get government reimbursement from March 2020 through March 2021 for a total of two weeks of full pay, up to a maximum of $511/day, for qualifying COVID-19 sick leave per covered employee and up to twelve weeks including school and child care COVID-19 closure leave at two-thirds of pay, up to a maximum of $200/day).

Employers may choose to not extend this option into 2021. Employers who wish to provide financial encouragement for employees to stay off work for COVID-19 qualifying reasons may welcome this opportunity to provide the remainder of this pay at no cost to the employer over the next three months. The law does not state whether employers can choose to extend FFCRA coverage into the first quarter for some but not all classifications of their employees; although we believe that, absent U.S. Department of Labor regulations or guidance coming out to the contrary, employers can differentiate between classes of employees as long as this is not done in a discriminatory manner or effect on the basis of an EEO protected category. Please contact Houston Harbaugh’s employment attorneys listed below to discuss the recent modifications to the FFCRA or any other questions.

Craig M. Brooks– 412-288-2214

Catherine S. Loeffler– 412-288-2262

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