Should Employers Resume Voluntary FFCRA Leave Due to Delta Variant?

​As the coronavirus pandemic eased earlier this year, some employers stopped providing voluntary Families First Coronavirus Response Act (FFCRA) leave. Now with the spread of the COVID-19 delta variant, they're considering resuming voluntary FFCRA leave.

Should they?

The answer depends on the optics of resuming so close to the scheduled end of the tax credit for voluntary FFCRA leave, the ability of the business to allow employees to take the leave and whether the resumption violates the American Rescue Plan Act (ARPA).

"Given the delta variant and significant increase in COVID-19 cases, employers that previously discontinued voluntary FFCRA leave may want to consider voluntarily providing FFCRA leave now," said LaKeisha Caton, an attorney with Pryor Cashman in New York City. "Employers that choose to restart voluntary FFCRA leave should make sure to administer the benefits in a manner that will allow them to take advantage of the FFCRA tax credits."

ARPA extended these tax credits through Sept. 30. With the tax credits sunsetting soon, an employer resuming FFCRA benefits would need to tell employees that the leave is available only through the end of September if the business doesn't plan on providing paid sick and family leave that isn't federally subsidized.

"That might present some messaging difficulties and cause employees to wonder why the employer did not allow leave earlier in the year," said Hugh Murray III, an attorney with McCarter & English in Hartford, Conn. "Employees could legitimately question why their employer chose to leave free money on the table by not allowing them to take leave in circumstances that would have justified it."

Murray noted it's possible that Congress could again extend the tax subsidies.

In addition, "offering COVID-19 leave on a voluntary basis after Sept. 30 may be a competitive recruiting advantage in industries where demand for talent is outpacing supply," said Stan Hill, an attorney with Seyfarth in Atlanta.

FFCRA Provisions

The FFCRA had two major provisions: the Emergency Paid Sick Leave (EPSL) Act and the Emergency Family and Medical Leave (EFML) Expansion Act. Under the EPSL Act, private employers with fewer than 500 employees and some public employers had to pay sick leave of up to 80 hours, or roughly 10 days, to employees who needed to take leave for certain coronavirus-related reasons.

Under the EFML Expansion Act, employees were eligible for an additional 10 weeks of family leave paid at two-thirds of their regular wages to care for a child whose school or place of care is closed or whose child care provider is unavailable because of COVID-19. The FFCRA doesn't have requirements for private-sector employers with 500 or more employees, and ARPA did not change that.

Additional COVID-19-Related Reasons

Under ARPA, tax credits continue to be available for paid sick leave and paid family leave, and now for these additional reasons:

• The worker is getting a COVID-19 vaccine. This would include booster shots, as there isn't a limit on the number of vaccinations for COVID-19 or specification of which ones are covered.
• The employee is recovering from complications due to receiving the vaccine.
• The worker is awaiting the results of a COVID-19 test or diagnosis for coronavirus.

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Considerations Before Resuming Voluntary FFCRA Leave

ARPA "reset" the 10-day limit for the tax credit for paid sick leave under the FFCRA as of April 1. In other words, "employers that discontinued voluntary FFCRA leave prior to April 1, 2021, and are now restarting voluntary FFCRA leave should therefore replenish the EPSL banks of all eligible employees so that they each have 10 sick days—or 80 hours—available in order to take advantage of the FFCRA tax credits," Caton explained.

"If the original balances are not reset, employees who may be experiencing symptoms of COVID-19 or side effects from the vaccine may be less likely to call in sick due to the lack of paid sick time available," Caton said. "This decision could have disastrous consequences for an employer's workforce."

When deciding whether to resume voluntary FFCRA leave, employers should consider if their businesses can reset paid-sick-leave balances for all eligible employees.

"This may especially be an issue for small employers or employers with generous paid-time-off policies," Caton said. "Employers cannot require employees to use their accrued paid time off and EPSL leave concurrently under the FFCRA, and it may not be practical for some employers to provide employees with 80 hours of EPSL leave that they can stack on top of their accrued paid time off."

ARPA doesn't mandate that the employer provide all two weeks of paid sick leave or all 10 additional weeks of paid family medical leave.

"Thus, the employer may provide a smaller leave entitlement and still seek tax reimbursement for the paid leave it does provide," Murray said. The employer could, for example, announce that it was providing one week of paid sick leave and two weeks of paid family leave and still get the tax credit for those weeks.

Murray cautioned it's possible that by denying leave for employees during certain periods and allowing it in other periods within the same quarter, an employer may inadvertently make leave more available to higher-compensated, full-time or more permanent employees, which would violate ARPA.

For example, suppose an organization has temporary and part-time summer employees whose employment ends by Sept. 1. If the employer denied leave to everyone during July and August and then allowed it to workers still employed in September, the employer may violate ARPA and be unable to claim the tax credit.