Gravel & Shea PC

FFRCA Ends, but Payroll Tax Credits Continue Employment-Related Highlights from the Omnibus and COVID-19 Relief Bill

President Trump signed the FY 2021 Omnibus and COVID-19 Relief bill (the “Act”) on Sunday, December 27, 2020.  There are several important employment-related provisions included in the Act.  Here is a summary of those provisions:

  • Payroll Tax Credit for Paid Sick Leave and Family Leave.  As we know, the Families First Coronavirus Relief Act (“FFCRA”) provided a certain amount of paid sick leave and extended family leave to employees who needed leave for certain COVID-related purposes.  Although the FFCRA expires on December 31, 2020 and the leave will no longer be required by law after that date, the Act extends the tax credit through March of 2021 for those employers who choose to provide the paid sick leave and extended family leave to their employees on a voluntary basis (if the employee has leave remaining under the limits set by the FFCRA).
  • Unemployment Insurance.  The Act provides $300 per week in increased federal unemployment benefits through March 14, 2021.  It also extends until April 5, 2021 the Pandemic Unemployment Assistance (“PUA”) program (which provides coverage for the self-employed and others in non-traditional employment circumstances) and the Pandemic Emergency Unemployment Compensation (“PEUC”) program (which provides additional benefits to those workers who have exhausted their regular state benefits).  The Act also increases the maximum number of weeks an individual may claim benefits to 50 weeks.
  • Tax Credit for Paid Family and Medical Leave.  The Act extends the federal tax credit through December 31, 2025 for employers who provide paid family and medical leave to their employees.
  • Health and Dependent Care Flexible Spending Accounts.  The Act allows employees to roll over unused amounts in their health and dependent care flexible spending accounts, from 2020 to 2021, and from 2021 to 2022.  It also allows employees to make a 2021 mid-year prospective change in contribution amounts.
  • Student Loan Repayment.  The CARES Act allowed employers to provide student loan repayment as a benefit to employees through December 31, 2020, and the Act extends this provision until December 31, 2025.  An employer may contribute up to $5,250 annually towards an employee’s student loans, which would be excluded from the employee’s income.
  • Return-To-Work Reporting Requirement.  The Act requires state to implement methods within 30 days to address situations where unemployment insurance claimants refuse to return to work or accept an offer of suitable work.  This method will require a reporting method for employers to notify the state when an individual refuses work.

We will continue to monitor federal and state laws and regulations surrounding these issues.  If you have questions or concerns, please contact your attorney at Gravel & Shea PC or Heather Hammond (hhammond@gravelshea.com).

Gravel & Shea PC January 7, 2021