Common questions: federal tax credits and COVID-19 sick leave

With the ongoing pandemic and employees still impacted by sickness or a mandatory quarantine because of virus exposure, employers are asking about the status of paid leave for their workers in 2021.

As of right now, the second stimulus bill in December 2020 did not continue the Families First Coronavirus Act (FFRCA) requirement for employers to offer paid sick leave. But the federal payroll tax credit continues to be available to companies who do until March 31, 2021. It is a voluntary, not mandatory option to help employers provide employees sick leave or family leave through the end of March as long as that allowance was not used up last year.

Under the guidelines, a full-time worker is allowed 80 hours of paid sick leave and 12 weeks of expanded family medical leave. ​Part-time employees are allowed an amount equal to the average number of hours over a two-week work period. Employers would not get a second tax credit for any workers on such leave in 2021 if the allotted paid leave time was used up in 2020.

Here are a few things to keep in mind:

  • Communicate with your team to let them know if you will continue paid sick leave and paid family leave until March 31, 2021
  • It’s possible that new legislation could be introduced to reinstate COVID-19 sick leave in the weeks and months to come. Check state government websites for COVID-19 sick leave laws, if applicable

If you have questions about COVID sick leave, contact your IPS representative.

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