In the latest HR updates, the American Rescue Plan Act has extended the tax credits for FFCRA leave again (it was expanded once before by the Consolidated Appropriations Act), as well as expanded the program in a few ways. MP’s HR services team shares the four updates you need to know about this program to stay in compliance. It will also cover the next steps your team should consider taking.
4 Changes to FFCRA Leave that Employers Need to Know
- It expires in September. Instead of expiring in March, employers now have the option to participate in the program until September 30, 2021.
- Employees are eligible for a new bank of Emergency Paid Sick leave (EPSL). After March 31, 2021, employees who have already exhausted their two-week allotment of EPSL may be eligible for a new bank. Full-time employees are entitled to another 80 hours of potential paid sick leave. Part-time employees are entitled to a prorated amount in accordance with their work schedule.
- More reasons to claim FFCRA leave. Workers can now take paid sick leave to go to vaccine appointments, or to take time off if they experience complications due to receiving the vaccine. (Many people have reported feeling ill after the second shot of the Pfizer or Moderna vaccines.) Employees can also take emergency paid sick leave (EPSL) when seeking a COVID-19 diagnosis or a test result if they’ve either been exposed to COVID-19 or if the employer has asked them to get tested. These circumstances weren’t previously explicitly covered. In addition to the expansion of qualifying reasons under EPSL, Emergency Family & Medical Leave (EFML) can now also be used for any EPSL reason. Previously, EFML was only available to employees for childcare reasons. However, now EFML can be used for any of the reasons covered under EPSL.
- The cap for EFML tax credits has been increased. The 10-day unpaid waiting period for EFML has been eliminated. Workers are now eligible to receive up to $12,000 for expanded family and medical leave if they need to take time off for any EFML qualifying reason as discussed above. There has been an increase in the cap on the tax credit accounts for the elimination of the 10-day unpaid waiting period.
What should employers do next?
Employers have a choice about whether or not to participate in this program. As before, this expansion to the program gives employers a chance at an FFCRA tax credit. Per the new legislation, employers can only receive this tax credit if they offer FFCRA leave to all employees—no discrimination is allowed against different kinds of workers. As employers decide if they will participate, it’s also important for them to remember that workers can re-set and begin claiming up to 10 days of leave as of April 1st, all the way through until the end of September 2021.
Should employers decide to participate, they need to update all relevant employee policies, forms, and communications. (If you work with HR consulting like MP, they can assist with this task.) Employers should also make sure they are prepared for accurate record keeping with their payroll system. (MP’s payroll management clients will be able to use our platform to claim and track the tax credits to participate in this program.)
Whether employers choose to participate in this program or not, they should keep up with MP’s HR blog, webinars, and social media. We will continue to post new guidance on this and other programs to help employers stay in compliance and maximize their people strategy.
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