As of January 2021, providing FFCRA paid leave is optional. Employers choosing to provide FFCRA Paid Leave to their employees on a voluntary basis can now receive a payroll tax credit to cover the wages paid through September 30, 2021 (subject to applicable caps).
Last year, in response to the COVID-19 Pandemic, Congress passed the Families First Coronavirus Response Act (FFCRA), which mandated that most employers with fewer than 500 employees provide their workers with paid sick leave or expanded family and medical leave for COVID-19 related reasons. In doing so, employers received payroll tax credits for providing the paid leave. FFCRA’s mandate ended on December 31, 2020.
Congress extended the FFCRA through the Consolidated Appropriations Act of 2021 to March 31, 2021 on a voluntary basis to those employers who provided paid leave to qualified employees. Employers voluntarily providing paid leave could continue to receive a tax credit for the wages. On March 11, 2021, President Biden signed into law another COVID-19 federal stimulus package, the American Rescue Plan Act (ARPA). The ARPA extends the FFCRA and the employer tax credits through September 30, 2021 on a voluntary basis. The ARPA also adds qualifying reasons for paid leave.Continue Reading Congress extends payroll tax credits to employers voluntarily providing FFCRA paid leave and expands leave provisions