What Employers Need to Know About the COVID-19 Emergency Relief Package, HR 133
On December 22, 2020, Congress approved a $900 billion relief measure, HR 133, in response to the worsening coronavirus pandemic and its economic fallout. If signed by the President, what will the law mean for employers and employees in 2021?
The law does not create new obligations for employers. Instead, COVID-19 paid leave programs are now optional. But employers can collect tax credits if they choose to provide the leave. The law also contains modest extensions and supplements to unemployment benefits.
Emergency Paid Sick Leave
The stimulus measure extends the availability of Emergency Paid Sick Leave tax credits to March 31, 2021, while removing the requirement that employers provide Emergency Paid Sick Leave. In other words, employers can elect to provide Emergency Paid Sick Leave. If they do, they are eligible to receive tax credits. (Section 286).
This extension does not provide additional or new tax credits or leave entitlements. Rather, available Emergency Paid Sick Leave can carry over into the new year, and employers can receive tax credits on wages paid until March 31, 2021. Thus, if an employee already used 80 hours of Emergency Paid Sick Leave in 2020, their employer cannot obtain tax credits for any additional hours taken by that employee. An employee who used none or only a part of the 80 hours could take additional leave up to 80 hours aggregate between April 1, 2020 and March 31, 2021. The employer is not required to allow the employee to take additional leave in 2021, but if the employer permits it, they may claim tax credits as reimbursement for the payment to the employee.
Emergency FMLA Expansion
The payroll credit for Paid Family Leave is extended to wages paid until March 31, 2021. Similarly to the extension of Emergency Paid Sick Leave, if any employee already used their full allotment of FMLA in 2020, no additional paid FMLA is available. If the employee has a remaining balance of FMLA available and qualifies for Emergency FMLA, their employer may choose whether to allow the employee to take additional leave. If the employer permits it and the employee takes additional leave before March 31, 2021, up to the maximum permitted, the employer may claim tax credits as reimbursement for the payment to the employee. (Section 286).
The COVID-19 Emergency Relief Package will increase weekly unemployment benefits by $300 per week, no matter the source or amount of unemployment compensation. This additional payment will last through March 14, 2021.
The Emergency Relief Package also extends state unemployment benefits by 11 weeks, meaning that a worker who qualifies for benefits under state eligibility rules may collect unemployment benefits for 11 weeks longer than they would able to receive under state rules and the CARES Act’s previous extension.
For information about the CARES Act unemployment expansion and Washington’s emergency changes to unemployment insurance eligibility rules, read our post here.
If you have specific questions about how HR 133 impacts your business, contact a member of the Stokes Lawrence Employment group.