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New COVID-19 relief package extends tax credits, but not paid leave mandate for county employers

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    New COVID-19 relief package extends tax credits, but not paid leave mandate for county employers

    On December 27, President Trump signed the $2.3 trillion Consolidated Appropriations Act of 2021, which contains both appropriations for Fiscal Year (FY) 2021 and additional COVID-19 relief. Along with new funding, the package also contains languages related to the paid sick and family leave program authorized under the Families First Coronavirus Response Act (FFCRA) (P.L. 116-127), which went into effect on April 1, 2020.

    The FFCRA imposed the first-ever temporary paid federal leave requirement for employers, including county governments, providing up to 80 hours of emergency paid sick leave and up to 12 weeks of partially paid emergency family leave, to employees of certain employers who are unable to work due to COVID-19-related reasons. To offset the additional mandate, the federal government provided a dollar-for-dollar offset from payroll taxes for paid leave wages paid to employees taking FFCRA leave also known as the Emergency Paid Leave Payroll Tax Credit.

    However, while counties were mandated under the FFCRA to provide paid sick and family leave benefits, the legislation did not make public employers, including counties, eligible for the Emergency Paid Leave Payroll Tax Credit. Without this tax credit, the high costs of funding these benefits harmed counties’ ability to provide critical services that are necessary toward a successful pandemic response. NACo developed an in-depth analysis of the paid leave requirement authorized under the FFCRA.

    The recently passed COVID-19 relief package contains two notable items related to the paid sick and family leave program authorized under the FFCRA:

    • The legislation extends the payroll tax credit for eligible employers to use for paid sick and paid family leave through March 31, 2021. The tax credits were originally scheduled to expire on December 31, 2020. Counties are still not eligible to receive payroll tax credits under the new legislation.
    • The legislation does not extend the FFCRA mandated paid leave framework. Therefore, employers, including counties, are not required to provide employees with FFCRA paid sick or family leave since the program ended on December 31, 2020. However, if an eligible employer chooses to allow employees to take leave for a COVID-19-related reason between January 1 and March 31, 2021, they may still claim the payroll tax credit. Counties are no longer mandated to provide paid sick and family leave under the new legislation.
    • After the FFCRA was signed into law, NACo worked with a bipartisan group of U.S. House legislators urging Congress to pass a legislative fix that would make counties eligible to receive the payroll tax credits. However, Congress did not pass the legislative fix to add eligibility for public employers, including counties prior, to the expiration of the FFCRA expanded paid sick and family leave program.

    On December 27, President Trump signed the $2.3 trillion Consolidated Appropriations Act of 2021, which contains both appropriations
    2021-01-05
    Blog
    2021-01-05

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