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FFCRA and CARES Act Employer Provisions Extended Under New Stimulus Bill

On December 27, 2020, the Consolidated Appropriations Act 2021 was signed into law providing trillions of dollars in pandemic funding and extending or modifying some provisions of previous pandemic relief bills including the Families First Coronavirus Relief Act (FFCRA) and the Coronavirus Aid, Relief, and Economic Security (CARES) Act.  Below is a summary of the provisions affecting employers.

  • FFCRA extensions:
    • The Paycheck Protection Program (PPP): Approximately $284 billion has been allocated to the PPP to provide small businesses with forgivable loans equal to the total spent on payroll and other specified costs.  This recent version of PPP, however, does have some different requirements and limits from the original PPP:
      • lowers the employee qualification threshold for businesses from 500 to 300 employees or fewer;
      • lowers the loan maximum from $10 million to $2 million;
      • makes new PPP loan proceeds used to cover payroll and other expenses tax deductible (if forgiven);
      • added qualifying expenses for new borrowers and those who have not yet applied for forgiveness, including the following:
        • costs for software, cloud computing, and other human resources and accounting needs;
        • property damage costs, including costs for property damage due to public disturbances that occurred during 2020 that are not covered by insurance;
        • supplier costs for expenditures according to a contract, purchase order, or order for goods in effect before taking out the loan that are essential to the recipient’s operations when the expenditures were made (supplier costs of perishable goods can be made before or during the life of the loan); and
        • worker protection expenditures for personal protective equipment (PPE) and help for compliance with federal health and safety guidelines or any equivalent State and local guidance related to COVID-19 during the period between March 1, 2020, and the end of the national emergency declaration.
      • PPP loans past, present, and future will be eligible to utilize the expanded forgivable expenses except for borrowers who have already received loan forgiveness;
      • Eligible borrowers must have used or will use the full amount of their first PPP; and demonstrate at least a 25% reduction in gross receipts in the first, second, or third quarter of 2020 relative to the same 2019 quarter;
      • In addition to small businesses, non-profit organizations, housing co-operatives, veterans’ organizations, tribal businesses, self-employed individuals, sole proprietors, independent contractors, and small agricultural co-operatives are also eligible for the PPP loans;
    • FFCRA Payroll Credit: The FFCRA provisions which required employers to provide emergency paid sick leave and emergency family and medical leave have expired, however, the tax credit offered to private employers who voluntarily continue to offer emergency paid sick and family leave has been extended through March 31, 2021. The requirement that eligible employers may not discharge, discipline, or discriminate against any employee who seeks to take emergency paid sick and family leave still stands.
  • CARES Act Extensions:
    • Extended the employee retention tax credit (ERTC);
    • Extended the date by which state and local governments must make expenditures with CARES Act Coronavirus Relief Fund (CRF) awards from Dec. 30, 2020, to Dec. 31, 2021;
    • Extended the Pandemic Unemployment Assistance (PUA) to March 17, 2021 and allows those who have not yet exhausted their rights under PUA to continue to receive such assistance until April 5, 2021:
      • expands the number of weeks for these PUA unemployment benefits from a 39-week period to a 50-week period.
      • beginning January 31, 2021, new applicants will be required to submit documentation to substantiate employment or self-employment within 21 days, although the deadline may be extended for good cause. Individuals receiving PUA as of January 31, 2021 must submit documentation to substantiate employment or self-employment within 90 days.
    • Extended the Federal Pandemic unemployment Compensation (FPUC) program through March 14, 2021, providing $300 per week for all workers receiving unemployment benefits;
    • Extended the Pandemic Emergency Unemployment Compensation (PEUC) through April 5, 2021 as long as recipients have not reached the maximum number of weeks, and increases the number of benefit weeks from 13 weeks to 24 weeks;
    • Requires states to implement methods within 30 days to address situations where claimants refuse to return to work or accept an offer of suitable work without good cause. A reporting procedure must be included for employers to notify the state of an individual’s refusal of employment and a notice to claimants informing them of return-to-work laws, their rights to refuse work, and what constitutes suitable work.

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