The federal government was busy over the holiday, passing legislation with the hopes of stimulating the economy as COVID-19 continues to be a threat to the health and well-being of the public. Below are a number of updates that employers should be aware of as we enter 2021:
- The Families First Coronavirus Response Act (FFCRA) benefit mandate has expired, though the provision of the benefits is “voluntary” through March 31, 2021. This means that employers may still provide FFCRA paid sick and emergency family and medical expansion leave benefits to obtain tax credits. It is likely that U.S. Department of Labor will be updating its guidance on the FFCRA, as many questions remain. For example, it is not clear if employers can choose to provide one type of benefit and not the other and still be eligible for the tax credits. Note that public employers are still not eligible for tax credits.
- The Paycheck Protection Program (PPP) has been renewed, with some changes. You can find more information here from us for first-time and second-time borrowers.
- CARES Act pandemic emergency unemployment compensation (PEUC) benefits (which provided 13 weeks of additional benefits) and the Pandemic Unemployment Assistance (PUA) benefits for self-employed and other types of non-wage workers have been extended through March 14, 2021. The federal increase will also be restored up to 11 weeks through March 13, 2021, but at $300.00 per benefit week as opposed to $600. There may be a gap in receiving these benefits as the U.S. Department of Labor provides guidance to the states on administering the program. There may also be a reduction in total benefit weeks due to the timing of the enactment of the legislation.
- While independent contractors were eligible for PUA benefits under the original CARES Act, now independent contractors with a mix of income from self-employment and wage employment are eligible for PUA, rather than just regular unemployment compensation benefits from their wage employment. This means that more independent contractors are likely to file claims without a designation that they are self-employed, which could cause confusion regarding whether the individual is an employee or is self-employed. Employers need to closely review claims and contest any inaccurate designations of their independent contractors.