Sunday night, Congress announced that it reached a deal on a stimulus bill that will provide more than $900 billion in funding. The House and Senate passed the bill late Monday night. Reports indicate that the stimulus deal includes funding for Americans and businesses, funding related to COVID-19 vaccine purchasing and distribution, a new round of Paycheck Protection Program (PPP) loans, rental assistance and more. But what about an extension of the Families First Coronavirus Response Act (FFCRA) leave benefits and extra unemployment compensation? (Note: The bill will go to President Donald Trump for his signature, but that is no sure thing given recent reports.)
What about the FFCRA?
The bill, all 5,500 pages of it, does address the FFCRA, but it probably isn’t what you think. The bill makes it clear that mandated FFCRA leave still ends on December 31, 2020. However, employers may voluntarily continue to provide the leave until March 31, 2021, and receive tax credits for it. It is also our interpretation of the bill that employees do not get a new bank of FFCRA leave should an employer choose to provide it between January 1, 2021 and March 31, 2021. In other words, if an employee already used all of their available FFCRA benefit in 2020, a tax credit is not available if the employer provides more paid leave in 2021.
What about unemployment benefits?
Businesses that had to temporarily furlough employees have faced a number of challenges getting them to return to work, including childcare issues and, in some instances, generous unemployment benefits. So will those benefits continue? Yes, but the payment is decreasing.
As we previously wrote, under the CARES Act, individuals who were unemployed received an additional federal unemployment payment of $600 per week, which expired in July. The payments will return in 2021 as the stimulus bill includes a $300 per week payment in federal unemployment benefits to be paid in addition to the benefits received from the state. The benefit will be provided for 11 weeks, beginning on December 26, 2020. You may be wondering it if will be difficult to get your employees to return to work with this added benefit and what if anything you can do about it. We addressed that in a previous blog.
The stimulus deal also extends the Pandemic Unemployment Assistance program. As covered in this previous blog, under the CARES Act, that program created a federal unemployment scheme for workers who are out of work due to COVID-19 but are not eligible for unemployment under their state’s unemployment laws, including the self-employed, independent contractors, workers in the so-called “gig economy” and others. Benefits under the program were set to expire on December 26, 2020, until now.
If you’d like some light bedtime reading, you can read the bill yourself. Or you can feel free to contact one of our attorneys to discuss it or prefer to avoid reading it entirely.