Mandatory Paid Sick Leave Ends (for now) in 2020
Well, did you like paid sick leave or did you not? I imagine that depends on your perspective. Workers will point to the fact that the government fully reimbursed private employers for the mandatory sick leave.
And one interesting study a claims that the existence of paid sick leave through the Emergency Paid Sick Leave Act and the Emergency Expanded FMLA dramatically reduced the spread of COVID-19. But the tax credit didn't apply to government employers. And other commentators have pointed out that even if the government reimburses paid sick leave through tax credits, employers still incur increased overhead and other costs replacing workers during periods of leave. It may be that all of these are salient points and empirical truths. But, here's another truth . . . .
Mandatory paid sick leave under the Emergency Paid Sick Leave Act and the Emergency Expanded FMLA, both of which are parts of the Families First Coronavirus Response Act, will end this year. As you already knew, the Families First Act leave mandates passed by Congress in March were originally set to expire on December 31, 2020. This blog previously reported on the questions and confusion surrounding the potential for an extension of the sunset provision into 2021. We now have the text of H.R. 133 (the Consolidated Appropriations Act, 2021), which was passed in both the House and Senate on December 21, 2020, and is now awaiting Presidential signature.
The relevant provision is Section 286 (page 2,033 of the PDF file) of the law. Anyone diving that deep into the bill will notice that it conspicuously omits any extension of the paid leave mandates into 2021. Instead, the law extends through March 31, 2021 the available payroll tax credits for paid sick and family leave—but does not extend the mandatory leave requirements imposed in the Families First Act. In essence, Congress reached a compromise, allowing employers to allow paid leave and recover tax credits for the leave provided, without requiring them to provide the leave.
So, what does that all mean? Employers covered by the paid leave mandates imposed by the Families First Act must continue to follow them through December 31, 2020. After that, there is no legal obligation to provide paid leave to employees for COVID-19-related reasons. However, assuming that your employees have not already exhausted the leave entitlements provided in the Families First Act, non-government employers will have the option to extend those paid leave benefits to their workers through March 31, 2020, and to recover tax credits (dollar for dollar) for any paid leave provided.
There's an important limitation here. The Families First Act granted employees just 80 hours of paid leave for certain qualifying reasons, and another 10 weeks of partially paid leave for certain other reasons. Once those leave entitlements are used up, they were not designed to be renewable—and H.R. 133 does not renew the leave entitlements for 2021. That means that only those employees who failed to use their allotment will have any paid leave left in the piggy bank for 2021. And employers will get the choice as to whether to allow them to use that leave and recover the tax credits.
I've written before about the bittersweet nature of increased flexibility. While it's very nice that employers get to choose whether or not to provide tax-advantaged paid leave for the first quarter of 2021, there are dangers out there. All employers should remember that even if the Families First Act paid leave mandate has expired, Title VII and other anti-discrimination laws still exist. Thus, providing paid leave to certain employees but not others could well mean you will end up defending a discrimination claim. If you intend to provide the paid leave to some, but not all, of your employees, you should seek legal counsel to minimize risks of discrimination claims.
What is more, in the absence of a paid leave mandate, the Americans With Disabilities Act (ADA) and the Family and Medical Leave Act (FMLA) merit your full attention. Workers will increasingly consider resorting to those laws to provide job-protected leaves of absence for coronavirus-related reasons. Most employers haven't had to spend much time debating leave requirements under those laws in 2020, given that employees were much more interested in paid leave under the Families First Act. Employers should be ready to address whether leave requests fall under the ADA or FMLA in 2021.
Another year, another new set of problems. But take heart: Each of you mastered a brand new employment law in 2020, without even a month to get ready. None of my clients made any big mistakes in the process, a testament to the great work that human resources professionals are doing to adapt and overcome. In that respect, 2021 will be more of the same. And remember, we are here to help you. The Lanier Ford COVID-19 Task Force is still answering questions from employers every day, and we stand ready to support your business in the new year.
Items on this web page are general in nature. They cannot—and should not—replace consultation with a competent legal professional. Nothing on this web page should be considered rendering legal advice.