New 2021 Covid-19 Paid Leave and Tax Credits

March 18, 2021 | Brian S. Conneely | John K. Diviney | Employment & Labor

In the past week, there have been several overlapping laws enacted regarding COVID-19. On March 12, 2021, Governor Cuomo signed into law legislation which mandates that all New York employers provide paid leave of up to four hours per injection for employees who receive a Covid-19 vaccination.  Also, on March 11, 2021, President Biden signed into law the America Rescue Plan Act which extends and expands the reasons for tax credits for small and midsized businesses for emergency paid sick leave and emergency family and medical leave due to Covid-19.  In addition, New York, New Jersey and New York City have recently enacted other paid sick leave and paid family and medical leaves that may impact Covid-19-related leaves.  Employers should revise and update their policies and handbooks to ensure compliance with these new paid leave laws.

The March 12, 2021 New York State Law requires all public and private employers to provide for up to four hours per injection for the Covid-19 vaccine unless a greater number of hours is provided for in a collective bargaining agreement, or the collective bargaining agreement expressly waives and refers to this new law.  The four hours of paid leave shall be at the employee’s regular hourly rate and cannot be charged against any other leave to which the employee may be entitled.  This new paid leave requirement is contained in a new Section 196-c of the Labor Law for all private employers and a new Section 159-c of the Civil Service Law for public employees.  This new New York State paid leave requirement for Covid-19 vaccinations is effective March 12, 2021 and expires on December 31, 2021.

The March 11, 2021 American Rescue Plan extends tax credits to small and midsized businesses that provide paid sick leave to employees for up to 80 hours or 10 days due to Covid-19 reasons, and the 10 days paid leave for tax credits resets April 1, 2021.  The American Rescue Plan also extends tax credits for up to 10 weeks or 2/3 salary to care for a child whose school or place of childcare is closed due to Covid-19.  The new law also extends and increases the tax credits for the amount of covered wages and paid leave for self-employed workers, and provides for reimbursement of pension plan and apprenticeship contributions made during the paid sick leave or paid family leave by employers under a collective bargaining agreement.  Additionally, paid sick leave and family leave tax credits also were expanded to apply to paid leave for employees taking the vaccine; recovering from complications due to the vaccine; and for awaiting results of a Covid-19 test or diagnosis for Covid-19 under the new federal law.

The American Rescue Plan also extends Employee Retention Tax Credits under the prior federal Covid-19 laws such as the Families First Covid-19 Response Act.  Finally, unpaid leave may be available for Covid-19 under the federal Family and Medical Leave Act, and there are proposals to update this legislation.

Additionally, new paid sick, family and medical leaves for Covid-19-related reasons may be required under New York, New Jersey or New York City laws, and other paid leave laws have been enacted or proposed in other states and municipalities.  This is the third leave law New York has passed in the past 12 months. In March 2020, New York passed the Covid-19 paid sick leave law and in April 2020, New York passed a statewide paid sick leave law that requires employers to provide paid or unpaid sick leave that can be used for purposes related to the health and well-being of an employee or their family members. Here are our previous bulletins that address some of these leave laws:

https://www.rivkinradler.com/publications/sick-leave-benefits-available-as-early-as-january-1-2021/

https://www.rivkinradler.com/publications/u-s-dol-issues-new-guidance-on-the-families-first-Covid-19-response-act/

https://www.rivkinradler.com/publications/u-s-dept-of-labor-provides-additional-guidance-for-employers/

https://www.rivkinradler.com/publications/Covid-19-update-new-york-state-passes-covid-19-laws/

In sum, due to these new and overlapping laws, employers should review with their legal advisers and accountants requests for leave due to Covid-19-related reasons, as well as payments and policies for those leaves.

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