Stimulus Package: Employment Law Edition
Hopefully, by now you have had a chance to peruse our colleagues’ high level overview of the recently signed stimulus package and the $284 billion allocated for the second round of the Payroll Protection Program and the $15 billion grant program for venue operators.
For employers, there are two key elements of the stimulus package that you should be aware of:
Unemployment Insurance (UI)
The package provides that individuals receiving unemployment benefits will receive an additional $300 per week in federal UI benefits for up to 11 weeks through March 14, 2021. As you may recall, the Coronavirus Aid, Relief, and Economic Security Act (more familiarly known as the CARES Act) provided recipients of state unemployment benefits with a $600 supplement, which expired in July 2020. The package’s $300 federal payment is, likewise, in addition to payments that individuals receive from their state unemployment programs.
In addition, it extends the Pandemic Unemployment Assistance (PUA) and the Pandemic Emergency Unemployment Compensation (PEUC) programs. The PUA program provides federally funded benefits to individuals who do not otherwise qualify for state unemployment benefits, such as self-employed workers and gig workers. The PEUC provides federally funded unemployment benefits for individuals who have exhausted their regular state unemployment benefits. The package also increases the maximum number of weeks an individual may claim benefits through regular state unemployment plus the PEUC or PUA programs, from 39 weeks (under the CARES Act) to 50 weeks. Finally, the package provides for an additional $100 per week for certain “mixed earners” – individuals who earn both W-2 and 1099 income.
Voluntary Compliance with the Families First Coronavirus Response Act (FFCRA)
As you may recall, the FFCRA's mandatory paid leave requirements will expire on December 31, 2020. The stimulus package offers employers the opportunity to voluntarily continue to provide emergency paid sick leave (EPSL) and emergency paid family (EFMLA) leave under the FFCRA through March 31, 2021 and continue to receive a dollar-for-dollar tax credit in respect of the paid leave voluntarily provided.
Please note that if, by December 31, 2020, an employee has already exhausted their EPSL entitlement under the FFCRA, they are not entitled to additional paid EPSL leave beginning January 1, 2021, and it does not appear that an employer will be entitled to a tax credit for paid leave voluntarily provided in excess of the employee’s paid leave entitlement.
As an example, if an employee exhausted their entire 80-hours EPSL entitlement in 2020, they would not be eligible for EPSL in 2021. However, if the employee used only 50 hours of EPSL in 2020, they would remain eligible for 30 hours of EPSL during the period January 1, 2021 to March 31, 2021, but only if their employer voluntarily agrees to provide FFCRA leave. At this point, it is unclear whether an employee who has exhausted their entire 12-week EFMLA leave entitlement would be eligible for additional leave if their employer’s FMLA 12-month period resets before March 31, 2021 (for those employers who voluntarily continue to provide FFCRA leave).
Of course, it’s entirely possible that the US Department of Labor (DOL) and/or the Internal Revenue Service (IRS) will publish guidance regarding the practical application of voluntarily provided FFCRA leave. Until then, it would seem that referencing the DOL’s and IRS’s previously published guidance regarding mandatory FFCRA leave would be prudent. But don’t forget to consider whether there is an applicable state law or local ordinance that may speak to paid sick leave for COVID-19 related reasons.