With the passage of the American Rescue Plan Stimulus package on March 11th, the question on every employer’s mind is: what’s going on with the FFCRA? 

A brief summary and history of the FFCRA…

The Families First Coronavirus Response Act (FFCRA) was passed a year ago and went into effect April 1, 2020. It applied to all employers with fewer than 500 employees and provided mandatory, job-protected, paid leave to all employees for the following reasons:

1. The employee is subject to a federal, state or local quarantine or isolation order related to COVID–19.
2. The employee has been advised by a health care provider to self-quarantine due to concerns related to COVID–19.
3. The employee is experiencing symptoms of COVID–19 and seeking a medical diagnosis.
4. The employee is caring for an individual who is subject to either number 1 or 2 above. 
5. The employee is caring for his or her child if the school or place of care of the child has been closed, or the child care provider of such child is unavailable, due to COVID–19 precautions.
6. The employee is experiencing any other substantially similar condition specified by the secretary of health and human services in consultation with the secretary of the treasury and the secretary of labor.

Paid leave was available in two ways: 1) Emergency Paid Sick Leave (EPSL), and 2) Emergency Family and Medical Leave Act (EFMLA). 

Under EPSL, employees had up to 80 hours over a two-week period of paid leave, which could be used for any reason listed above. Under EFMLA, employees had up to 12 weeks of leave, which could only be used for reason #5 above. The first 2 weeks of EFMLA were unpaid, therefore, up to 10 weeks were paid. 

When EPSL was used for reasons #1-3, it was paid at the employee’s regular rate of pay up to a cap of $511.00 per day. When EPSL was used for reasons #4-6, it was paid at 2/3rds the employee’s regular rate of pay up to a cap of $200.00 per day. 

Paid leave under EFMLA was paid at 2/3rds the employee’s regular rate of pay up to a cap of $200.00 per day. Total EFMLA was capped at $10,000.00 in aggregate.

When an employee was off and FFCRA applied, the employer paid employees directly (just like any other type of compensation) and could then seek a 100% tax reimbursement. This came via a tax reduction on the employer’s payroll taxes. For example, if an employer’s payroll tax costs were $5,000.00 and the FFCRA wages totaled $2,000.00, then that cost got subtracted from the total and the employer paid what was left. In this case, it would be $3,000.00. 

The FFCRA was set to expire on December 31, 2020. With the passage of the Consolidated Appropriations Act (CAA) of 2021 on December 27, 2020, the FFCRA was made voluntary and extended the tax credits through March 31, 2021.

Under the CAA, employers could elect to continue providing EPSL and/or EFMLA and, if they did, they got their tax credits. It did not reset the amount of paid leave available or make any further changes. Therefore, if employees had used up their EPSL and/or their EFMLA in 2020, they did not receive more on January 1, 2021. Any time off for reasons listed above would have needed to be covered by other employer benefits. For all others, their available time simply rolled over into 2021 and could be used if appropriate. 

When President Biden took office, it was very clear from the get-go that a new stimulus package was coming, and it was widely assumed there would be something in it regarding the FFCRA. Those assumptions were right!

The American Rescue Plan Stimulus package…

The American Rescue Plan, in terms of the FFCRA, effectively begins April 1, 2021 and goes through September 30, 2021. 

Unlike the CAA, the American Rescue Plan does make changes to the FFCRA, but let’s start with three important aspects that have not changed: 

• It is still voluntary. 
• 100% tax reimbursement is still available.
• Only applicable to employers with fewer than 500 employees.

All other aspects of what has been described above also remain the same. Here’s what been added or changed:

1. Adds additional reasons for being able to take leave under the FFCRA. These include the following:

• Obtaining a COVID-19 vaccine
• Recovering from any illness or condition related to the COVID-19 vaccine
• Seeking or awaiting the results of a COVID-19 diagnosis or test if either the employee has been exposed to COVID-19 or the employer requested the test or diagnosis

*Note: this is paid at the employee’s regular rate of pay up to a cap of $511.00 per day.

2. Resets EPSL as of April 1, 2021. Therefore, employees are eligible for a new set of up to 80 hours over a two-week period even if they used all that time previous to March 31, 2021.

3. Expands EFMLA to include all the reasons that EPSL can be taken. In other words, EFMLA, which previously only applied to reason #5, now includes all 6 reasons listed at the start of this article and the 3 new ones added by the rescue plan.

4. Removes the unpaid portion of EFMLA. All 12 weeks are now paid. This also increases the total wage cap to $12,000.00 in aggregate.

*Note: all leave under EFMLA is paid at 2/3rds the employee’s regular rate of pay up to a cap of $200.00 per day.

*Note: EFMLA does not appear to have been reset as of April 1, 2021. Therefore, EFMLA is only available if employees have never used EFMLA or did not use all available 12 weeks previously. Also, for employers subject to normal FMLA (those with 50+ employees), any leave taken under EFMLA and/or FMLA count against any EFMLA available now.

5. Adds non-discrimination rules. Tax credits will not be available if employers limit leave under the FFCRA to only certain employees such as full-time, highly-compensated, or employees with certain amount of tenure. This means that if an employer chooses to offer additional EPSL or EFMLA, it must offer the leave to all employees — including part-time employees and newly hired employees.

*Note: it would appear that employers could choose to offer only EPSL or only EFMLA instead of offering both. The non-discrimination rules would then apply to the types of leave being offered. In other words, you can exclude everyone from EFMLA, but, if you choose to offer it, then it must apply to all employees.

What to do now…

First, make a decision. Will you offer leave under the FFCRA at all? Whatever you choose, you should decide soon and make a formal announcement to your employees, even if you’re not voluntarily providing FFCRA now. Employees will likely hear about this from other sources, so it is best to set the record straight immediately so as to avoid confusion later. 

Second, if you’re going to offer EPSL or EFMLA or both and you’re one of our clients, reach out to us for a new policy and new FFCRA forms. You will want to provide the new policy to your employees so that they understand what’s available to them. Then, if someone takes FFCRA leave, you will need to use the new forms in order to ensure you can document and receive your tax credits. 

Third, if you’re going to offer EPSL or EFMLA or both, be sure to administer it exactly as required. Though this is voluntary, all the rules apply for administration purposes.  

Fourth, if you’re not going to provide leave under FFCRA, be sure your employees know how time off will be handled if they have an issue related to COVID-19. This can include any of the following:

• It may be unpaid. 
• It may be paid using any applicable benefit provided such as sick leave or vacation or paid time off.
• It may be paid under other state law mandates such as New York’s COVID-19 Sick Leave, or Colorado’s Public Health Emergency Leave or other state rules that may apply to you. 
• It may be covered by unemployment insurance benefits.

Final thoughts…

Why not offer some portion of the FFCRA? With the 100% tax reimbursement portion of the FFCRA, it is nearly a cost-free benefit. How often is that the case? Employers have an opportunity to build some goodwill with employees and to do so with little to no harm done. 

Right now, even though we’re starting to see a light at the end of the tunnel with this pandemic, we still have a long way to go. Employees could still be experiencing COVID-19 situations and need time off. Should it really mean they go without pay when their employer can provide a benefit that is 100% tax reimbursable? 

Also, the way out of this is for as many people as possible to get vaccinated. What better way to support that then to offer leave under the FFCRA for vaccinations (and get reimbursed for doing so!)? 

We see offering leave under the FFCRA as a win-win situation. We encourage you to see it that way too.

New York State Employers Must Provide Paid Leave for COVID-19 Vaccination purposes? 

The new legislation, which is effective immediately and sunsets on December 31, 2022, provides the following: 

1. All New York employees must receive a paid leave of absence for “a sufficient period of time” not to exceed four hours per vaccine injection. In other words, employees may be entitled to up to eight hours of paid time off if receiving a two-injection COVID-19 vaccine. 
2. This leave must be paid at the employee’s regular rate of pay. 
3. Employers cannot require employees to use other available leave (such as sick leave or vacation time) before providing this leave.

Furthermore, the new law prohibits discrimination or retaliation against any employee who exercises their rights under the law, is silent as to any retroactive effect, if any, and does not provide any information as to the types of documentation employers can request from employees seeking this leave.

New Jersey Protects Off-Duty Recreational Marijuana Use?

Governor Phil Murphy has signed the New Jersey Cannabis Regulatory, Enforcement Assistance, and Marketplace Modernization Act. Once fully in place, New Jersey will be the first state in the nation to protect employees from almost any adverse employment action triggered by off-duty recreational marijuana activity.

The new law continues certain fundamental employer prerogatives and rights, such as:

• Does not require employers to permit employees to use or possess marijuana or marijuana products during work hours or to work while under the influence.
• It is not intended to allow driving under the influence of, or impaired by, cannabis or cannabis products, or supersede marijuana DUI/impairment laws.
• Does not restrict or preempt legal obligations to maintain a “drug-free workplace” (laws prohibiting illegal activity in the workplace, but not mandating testing) and employers may be able to test if compliance would lead to a “provable adverse impact” under “requirements of a federal contract.”

Although testing is not prohibited, employers cannot refuse to hire any person or take adverse action against an employee solely because they use or test positive for cannabis. Further, New Jersey will permit adverse action following a positive test only if the employer’s testing program uses scientifically valid methods and a Certified Workplace Impairment Recognition Expert has deemed the individual to be impaired. 

It is No Longer Legal to Round Meal and Rest Periods in California?

On February 25, 2021, in Donohue v. AMN Services, LLC, S253677, the California Supreme Court held that rounding time at the meal period is not proper. This ruling concluded that an employer’s rounding up of a shortened meal period through a clock mechanism effectually deprived employees of premium pay which could not be reconciled against additional minutes even when rounding resulted in additional compensation for time off.  

As a result, employers should ensure that any clocked meal or rest periods are accurately measured. California employers who wish to use rounding practices for meal period calculations should immediately seek legal advice in light of this opinion.

Colorado Clarified the Public Health Emergency Leave Requirement for New Hires and Part-Time Employees?

On February 23, 2021, the Colorado Department of Labor and Employment (CDLE) issued revisions to the Wage Protection Rules relating to Colorado employers paid sick leave obligations under the Healthy Families and Workplaces Act (HFWA). While the CDLE only made a handful of changes, they are nonetheless important, particularly with respect to the obligation to provide public health emergency leave (PHEL).

First, the rules make clear that the amount of PHEL to which part-time employees are entitled is tied to when the employee requests PHEL. Full-time employees (employees who work at least 40 hours per week) are entitled to 80 hours of PHEL under the law, but it was previously unclear what amount of PHEL employers needed to provide to part-time employees. The statute’s text and the prior version of the rules provided that such employees were entitled to leave equal to the amount they work in a 14-day period, but it was unclear to which actual 14-day period this language referred. The rules now provide that part-time employees receive PHEL in “the greater of the number of hours the employee (a) is scheduled for work or paid leave in the 14-day period after the leave request, or (b) actually worked in the 14-day period prior to the declaration of the public health emergency or the leave request, whichever is later.”

The second change makes clear that employees who are hired during a public health emergency are entitled to PHEL, regardless of their date of hire.

These rules do not officially take effect until April 14, 2021, but employers can/should rely on them immediately since the modifications to the rules “clarify, but do not change, substantive rights or responsibilities” under the law.

A New Jersey Court Ruled that Employee Complaints Concerning COVID-19 Measures May Be Protected Whistleblower Activity.

In Loeb v. Vantage Custom Classics Inc., the New Jersey Superior Court of Essex County ruled that a plaintiff could proceed with a lawsuit against his former employer under the New Jersey Conscientious Employee Protection Act (CEPA). This lawsuit is in regards to Loeb’s alleged termination in retaliation for expressing concerns about worker safety and seeking to implement various COVID-19-related safety protocols and measures. 

CEPA, New Jersey’s whistleblower protection law, prohibits all New Jersey employers from retaliating against employees who disclose, object to, or refuse to participate in actions that the employee reasonably believes are illegal or in violation of public policy. The New Jersey courts have interpreted “public policy” broadly. In Loeb, the court concluded that the various COVID-19 guidelines issued by New Jersey Gov. Phil Murphy, OSHA, and the CDC were a sufficient basis for the plaintiff to base his CEPA claim.

This opinion suggests CEPA may protect employees who complain to employers about feeling unsafe at work due to COVID-19 from retaliation, such as discipline or termination, even if those complaints were made at the very beginning of the pandemic. Employers should be mindful of the COVID-19-related safety protocols they implement and take care not to retaliate against employees who do not feel safe in the workplace due to COVID-19.

Connecticut Enacts Banning Discrimination Based on Ethnic Traits.

On March 4, 2021, Governor Ned Lamont signed legislation prohibiting discrimination on the basis of ethnic traits historically associated with race. The “Creating a Respectful and Open World for Natural Hair,” also known as the CROWN Act (Bill No. 6515), amends the definition of race in the state’s anti-discrimination laws to be “inclusive of ethnic traits historically associated with race, including, but not limited to, hair texture and protective hairstyles.”

The CROWN Act is effective immediately. It is now an unlawful employment practice to discriminate against employees and applicants on the basis of ethnic traits, such as protective hairstyles. The term “protective hairstyles” is defined as “wigs, headwraps and hairstyles such as individual braids, cornrows, locs, twists, Bantu knots, afros and afro puffs.” The law does not limit the definition of “ethnic traits” to hairstyles.