On December 27, 2020, President Donald Trump signed the Consolidated Appropriations Act, 2021
(CAA), which among other things, averted a shut down of the Federal Government. The entire CAA is over 5,500 pages and contained within the CAA is the $900 billion dollar pandemic relief package. Of importance to employers, the pandemic relief provision of the CAA does three primary things:
UNEMPLOYMENT BENEFITS EXTENSIONS
The CAA extends the additional $300 per week in unemployment benefits through March 14, 2021. As you may recall, the original Coronavirus Aid, Relief, and Economic Security Act (CARES Act) provided an additional $600 per week in unemployment benefits which expired in July 2020. The CAA also extends the Pandemic Unemployment Assistance provisions of the CARES Act, to continue to provide eligibility for unemployment benefits for certain gig workers, independent contractors and others who would not normally be eligible for unemployment benefits. Finally, the CAA extends the maximum period for jobless benefits under the Pandemic Emergency Unemployment Compensation Program from the 39 weeks of federally funded benefits contained in the CARES Act to 50 weeks. Interestingly, the CAA also requires “Each State participating in an agreement under any of the preceding sections of this subtitle” to have in effect “a method to address any circumstances in which, during any period during which such agreement is in effect, claimants of unemployment compensation refuse to return to work or to accept an offer of suitable work without good cause.” The methods “shall include” a reporting method for employers to report when an individual refuses an offer of employment and a “plain-language notice” provided to claimants about “State return to work laws, rights to refuse to return to work or to refuse suitable work, and a claimant’s right to refuse work that poses a risk to the claimant’s health or safety . . .”
CHANGES TO THE FFCRA
While the CAA does not extend the requirements for the paid leave mandated under the Family First Coronavirus Response Act (FFCRA), and those requirements will expire on December 31, 2020, the CAA does allow covered private employers to continue to voluntarily
provide paid leave that was mandated until December 31, 2020, under both the Emergency Paid Sick Leave Act and the Emergency Family and Medical Leave Expansion Act. If covered employers do provide such voluntary paid leave, and they provide the leave under the same terms and conditions contained in those acts, the employer may continue to take the tax credit for such leave through March 31, 2021. It is important to note that it does not appear that this is a new bucket of leave; the CAA simply allows a covered private employer to continue to voluntarily provide the leave and take the tax credits for eligible employees who still have leave available to them under one or both of these acts.
EXPANDED EMPLOYEE RETENTION TAX CREDITS
When the CARES Act was passed, it included many relief provisions for businesses, including a refundable credit for employee retention of up to 50% of the wages of certain workers against the FICA obligation of the employer and employee. The credit was provided on the first $10,000 of compensation, including health benefits paid to an eligible employee for the period from March 13, 2020, through December 31, 2020. The credit was available to employers whose: (1) operations were fully or partially suspended due to a COVID-19-related shutdown order; or (2) gross receipts declined by more than 50% when compared to the same quarter in the prior year. Limitations apply to employers with 100 or more employees. The CAA expands and extends this credit. The credit is expanded to 70% of the wages of certain workers against the FICA obligation and the credit is now available for the first $10,000 of compensation per quarter. The credit is now available to employers: (1) who experienced a full or partial suspension of operations during the quarter due to a government ordered shutdown; or (2) whose gross receipts for the calendar quarter are less than 80% of gross recipients for the same calendar quarter in 2019. Limitations now apply to employers with more than 500 employees.
If you have questions about these benefits under the CAA, please contact any member of Warner’s Labor and Employment Practice Group.