Here is the latest on Covid-19 Paid Sick Leave. Next week we will provide more instruction on how to use your Datatech software to comply with these changes.
The American Rescue Plan was signed on March 11, 2021. This affected the already existing Families First Coronavirus Response Act (FFCRA) expanding the prior tax credit period from March 31, 2021, to September 30, 2021.
The plan does not require employers to provide paid leave. However, the plan does expand the qualifying reasons for employee leave and the tax credits available to employers for providing leave.
It also resets the balance of EPSL to 80 hours for eligible employees as of April 1, 2021. If an employee has exhausted the original two weeks before April 1, employers have the option to provide such employee an additional two weeks of EPSL for use between April 1, 2021 and September 30, 2021.
California Covid-19 Supplemental Paid Sick Leave
Employers with 25 or more employees are required to provide paid sick leave to their employees. The law will apply retroactively to January 1, 2021 and will expire September 30, 2021.
That means an employee is entitled to be paid retroactive payment for qualifying leave taken between January 1, 2021 and the effective date of this law, that was not compensated by the employer in an amount equal to or greater than required by this law. The number of hours paid retroactively count toward the total number of hours available to the employee.
Does CA Covid-19 SPSL count towards FFCRA tax credits?
According to The National Law Review, you can credit hours taken under the FFCRA since January 1, 2021 towards California Covid-19 SPSL if the leave is categorized under a related reason between the two laws. See the example they use below:
“Crediting Leave Paid for Covered Absences Taken Since January 1, 2021
Excluding regular paid sick leave (PSL), the bill authorizes an employer to credit towards COVID-19 SPSL (Supplemental Paid Sick Leave) the hours of other paid leave the employer provided to employees on or after January 1, 2021, for absences taken for the same COVID-19–related reasons as those contained in the bill.
For example, if an employer already extended and the employee used 3 hours of leave taken under the Families First Coronavirus Response Act (FFCRA) on or after January 1, 2021, a full-time employee would be entitled to 77, not 80, hours of COVID-19 SPSL. Employers may not credit paid leave they provided employees for COVID-19–related reasons in 2020.”
How many supplemental paid sick leave hours am I required to give my employees?
Full-time employees are entitled to 80 hours of COVID-19 supplemental paid sick leave, if the covered employee satisfies either of the following criteria:
(ii) The covered employee worked or was scheduled to work, on average, at least 40 hours per week for the employer in the two weeks preceding the date the covered employee took COVID-19 supplemental paid sick leave.”
What is the Compensation Rate?
“The rate of pay for the leave for non-exempt employees shall be calculated by the highest of the following:
- The employee’s regular rate of pay for the workweek in which the employee uses the leave.
- A formula of dividing the covered employee’s total wages not including overtime by the employee’s total hours worked in the full pay period of the prior 90 days of employment
- The state minimum wage
- The local minimum wage to which the employee is entitled”
– The National Law Review
Please contact our support department with any questions regarding using your Datatech software.
The information presented in this article should not be construed as legal, accounting or tax advice. Our employees are not accountants or lawyers and they do not provide accounting, tax or legal advice. You should consult with a professional advisor familiar with your particular factual situation for advice concerning specific accounting, tax or legal matters before making any decisions.