Within the bill to fund the government and provide continued economic relief in response to the pandemic, there are expansions of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, the Paycheck Protection Program (PPP), and an extension of the refundable employer payroll tax credit for paid sick and family leave through March 31st 2021.
Here are the highlights of what employers need to know …
- Health and Dependent Care FSA: The relief package allows taxpayers to roll over unused amounts in their health and dependent care flexible spending accounts from 2020 to 2021, and from 2021 to 2022. This provision also permits employers to allow employees to make a 2021 mid-year change in contribution amounts.
- Employer Credit for Paid Family and Medical Leave: The Tax Cuts and Jobs Act of 2017 provided a federal tax credit for employers that provided paid family and medical leave to their employees. The relief package extends the employer credit through December 2025 and applies to wages paid in taxable years beginning 2021.
- Employer Credit for Paid Sick Leave and Family Leave: The Families First Coronavirus Response Act (FFCRA) provided a refundable payroll tax credit for mandated paid sick and family leave through December 31st 2020. The [new] bill allows employers to voluntarily provide the FFCRA paid sick and family leave and extends the tax credit for employers who voluntarily continue to offer paid sick and family leave to their employees through March 31st 2021.
- Employer-Provided Student Loan Repayment: The CARES Act temporarily allowed employers to provide student loan repayment as a benefit to employees through December 2020. Under the provision, an employer may contribute up to $5,250 annually toward an employee’s student loans, and the payment will be excluded from the employee’s income. The $5,250 cap applies to both the new student loan repayment benefit and other educational assistance (e.g., tuition, fees, and books). The provision is extended now through December 2025.
- Additional Workplace Provisions Included in The Relief Package:
| Extension of expanded unemployment insurance. | Deferred payroll taxes. |
| Extension of the employee retention tax credit. | A deduction for business meals. |
Families First Coronavirus Response Act (FFCRA)
- FFCRA mandated leave expired in December 2020. You will need to communicate with employees who are on leave what their expectations are about returning to work. Or, if they’re not returning, review if their leave may be converted to an unpaid FMLA Leave [Family and Medical Leave Act], an OFLA Leave [Oregon Family Leave Act], or if they will need to take an approved unpaid leave of absence.
- Re-evaluate if the employee on leave, must be provided with accommodations under the Americans with Disabilities Act. Depending on the reason for the employee’s absence, including for those employees who have continuing health complications from the coronavirus, employees may be eligible ADA accommodations.
Employers should have a plan in place for continuing COVID-19-related leave scenarios and be prepared to comply with applicable state and federal leave laws as they arise. Employers will need to update their company leave policies to ensure employees have adequate protection to take leave when necessary to avoid spreading the virus to others in the workplace, recuperate from the virus, or facilitate a safe return to the worksite.