[2021 Update] How to Track and Pay FFCRA Sick Leave

Posted January 12, 2021

Payroll, Benefits, Human Resources, Managing COVID-19, Tax Compliance

The new $900 billion coronavirus relief bill has become law and answers the question of whether federal Emergency Paid Sick Leave (EPSL) and Emergency Family and Medical Leave (EFMLA) will be extended.

The answer is yes, but it’s an option, not a requirement. Here’s what employers need to know:

Offering EPSL and EFMLA after December 31, 2020 will become optional for employers.
An employee will no longer be entitled by law to take EPSL or EFMLA, even if they have a qualifying reason.
Employers who choose to offer these paid leaves can still receive a tax credit if they follow the current EPSL and EFMLA rules, including job protection.
The extension of the tax credit will be available for leaves taken through March 31, 2021.
With one possible exception (see below), employees will not get new hours to use—the unused portion of their original allotment that remains on January 1 is how much they will be able to use through March 31. For instance, if an employee who was entitled to 80 hours of EPSL between April 1 and December 31 used 40 of those hours in 2020, they’d have 40 hours left to use between January 1 and March 31, 2021.

Employers who choose to offer EFMLA after December 31 will need to provide a new bank of 12 weeks if their regular FMLA year is the calendar year or another fixed 12-month period that resets before March 31.

The purpose of this video is to continue to assist our clients in confidently navigating what feels like an ever-changing landscape of the Families First Coronavirus Response Act and the multiple provisions contained within it.

We will discuss how Ahola is handling the entry of FFCRA qualified sick and family leave pay and what information we need from our clients to enter this pay information accurately. We will also touch on the tax credits for paying qualified leaves, what they look like in the payroll system, as well as your options for additional credits for applicable health insurance amounts. As part of this discussion we will also review the new spreadsheet template that has been created to assist you in supplying your sick and leave pay information to Ahola.