Monday, December 28, 2020
Since April 1, employers with fewer than 500 employees have been required to grant paid leave to their employees for a variety of COVID-related reasons. The two paid-leave provisions in the Families First Coronavirus Response Act (FFCRA) (1) created a paid sick-leave benefit for the first time at the federal level, the Emergency Paid Sick Leave Act (EPSLA), and (2) amended the FMLA to allow for paid leave in the narrow instance of school and child care facility closures due to COVID, the Emergency Family and Medical Leave Expansion Act (EFMLEA). Pursuant to the EPSLA, full-time employees could receive up to 80 hours of paid leave, with certain pay caps depending upon the reason for the leave. Likewise, under the EFMLEA, an employee dealing with a school closing or unavailability of child care, could receive partial pay for up to 10 weeks. Once employers fronted these payments to employees, they could seek reimbursement from the federal gov
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Late in the day on December 27, 2020, President Trump signed the Consolidated Appropriations Act of 2020, which contains the latest in coronavirus relief measures. The massive 5,593-page legislation covers a wide variety of topics. This alert provides a high-level overview of two of the new law s provisions that will directly impact employers and individual employees: extension of tax credits for FFCRA-type leave, and expanded unemployment benefits.
Families First Coronavirus Response Act Tax Credits Extended, while Mandate Ends
The Families First Coronavirus Response Act (FFCRA) generally requires private employers with fewer than 500 employees to provide 80 hours of Emergency Paid Sick Leave and 10 weeks of paid Emergency Family and Medical Leave, as covered in Stinson s March 19, 2020 alert. The new Appropriations Act does not extend the
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In March 2020, the federal government passed the Families First Coronavirus Response Act (FFCRA), which required employers to provide paid leave to employees under certain circumstances related to the global coronavirus pandemic. The FFCRA contains two main provisions that address employee absences: the Emergency Family and Medical Leave Expansion Act (EFMLEA) and the Emergency Paid Sick Leave Act (EPSLA). The EFMLEA and the EPSLA were set to expire on December 31, 2020. From the employer’s perspective, an important aspect of the FFCRA included a provision that allowed employers to take payroll tax credits for paid leave provided to employees under the FFCRA. On the other hand, employees knew they would be compensated when they had to miss work for specific COVID-19 related reasons. Everyone benefited from the incentives this legislation provided for employees to stay home from work when necessary to help combat the viru
Tuesday, December 29, 2020
Expenses Related to PPP Loan Forgiveness Are Deductible. The CARES Act included a loan forgiveness program under the Small Business Administration’s Paycheck Protection Program (the “PPP”). A PPP loan may be forgiven if its proceeds are used for “payroll costs” or certain other expenses. Under the CARES Act, the forgiveness of a PPP loan does not give rise to taxable cancellation of indebted income, or a loss of tax attributes. However, the IRS held that expenses that gave rise to PPP loan forgiveness were not deductible.
[1] The Act reverses this rule and permits taxpayers whose PPP loans are forgiven to deduct the expenses relating to their loans to the extent they would otherwise qualify as ordinary and necessary business expenses.
Monday, December 28, 2020
On Sunday, December 27, 2020, President Trump signed the legislation providing government funding and a long-anticipated coronavirus relief package (the “Bill”). The wide-sweeping Bill contains a number of key provisions that will impact both public and private sector employment in 2021. Of particular significance to employers is that:
The Bill does not extend the mandates of the Emergency Family and Medical Leave Expansion Act (“EFMLEA”) or the Emergency Paid Sick Leave Act (“EPSLA”) enacted under the Families First Coronavirus Response Act (“FFCRA”).
The Bill allows tax credits to employers for “FFCRA like” paid leave benefits paid to employees through March 31, 202
The Bill provides no economic incentive for public employers to continue FFCRA s paid leave benefits.