The Families First Coronavirus Response Act (“FFCRA”) passed in March 2020, required small and medium size employers throughout the country to provide paid leave to their employees for a number of COVID-19 related reasons. Eligible employees were entitled to paid leave for, among other things, experiencing symptoms of COVID-19, quarantining after possible exposure to COVID-19 and taking time off to care for children whose schools were closed due to COVID-19. Importantly, to offset the costs of this mandate, the FFCRA allowed covered employers to receive a dollar-for-dollar tax credit for all COVID-19 related paid leave provided to their employees.

The FFCRA’s mandatory paid sick leave provisions sunset on December 31, 2020. As a result, starting January 1, 2021, companies will have no obligation under federal law to provide their employees with paid time off from work for reasons relating to COVID-19.

However, provisions in the new COVID-19 stimulus bill that was signed into law on December 27, 2020 extend the FFCRA’s paid sick leave tax credit to March 31, 2021. This means that any company that voluntarily chooses to provide COVID-19 related paid leave to its employees after the New Year may be entitled to a tax credit for the cost of providing such paid leave until the end of March 2021.

For an employer to qualify for these tax credits from January 1, 2021 through March 31, 2021, the stimulus bill requires that the employer must voluntarily continue to offer COVID-19 related paid leave, must not interfere with the right of employees to use any COVID-19 related paid leave offered and must not retaliate against any employee who uses COVID-19 related paid leave.

There are still many questions to be answered about how these provisions of the stimulus bill will be applied to companies moving forward.

For more information, please contact Lisa Scidurlo at lmsc@stevenslee.com, Wade Albert at wda@stevenslee.com, or reach out to the Stevens & Lee attorney with whom you regularly work.