Update to the paid-leave tax credit expansion—paid leave for employees to receive a COVID-19 vaccine
As previously described in these updates, the Treasury Department and the IRS announced that eligible employers could receive paid-leave tax credits under the American Rescue Plan Act (ARPA) for providing leave for each employee receiving a COVID-19 vaccine and for any time needed to recover from the vaccine.
Generally, the tax credits are available for qualified leave wages an eligible employer provides with respect to leave taken by employees beginning on April 1, 2021, through Sept. 30, 2021, if the leave would have satisfied the requirements of the Emergency Paid Sick Leave Act and the Emergency Family and Medical Leave Expansion Act, as amended for ARPA.
An eligible employer is generally an employer that has fewer than 500 employees. According to the IRS, the tax credit for paid-family-leave wages “is equal to the family-leave wages paid for up to 12 weeks, limited to $200 per day and $12,000 in the aggregate, two-thirds of the employee’s regular rate of pay.”
On July 29, 2021, the IRS posted new guidance on the paid leave tax credits. The new guidance “gives employers further opportunity to support the health and safety of their employees’ families and communities without placing an undue burden on their businesses during the pandemic.” The updated guidance clarifies that eligible employers can claim tax credits for providing leave to employees: (i) to accompany a family or household member (or certain other individuals) to obtain an immunization relating to COVID-19; and (ii) to care for a family or household member or certain other individuals recovering from the immunization.
Airline to hike insurance premiums for unvaccinated employees
Delta Airlines has announced that effective Nov. 1, it will hike its health insurance premiums by $200/month for all employees who have not received a COVID-19 vaccination. In a memo to employees, Delta’s CEO Ed Bastian explained that the “average hospital stay for COVID-19 has cost Delta $50,000 per person.” He continued, this $200 monthly “surcharge will be necessary to address the financial risk the decision to not vaccinate is creating for our company.”
We recommend you seek legal advice from an experienced employment attorney before implementing a premium hike for unvaccinated employees. There are a number of legal considerations to such a “stick” approach.
Congress considers bill to allow employers to give PTO for overtime hoursT
The U.S. House of Representatives will soon vote on legislation that would allow private-sector employers to offer non-exempt employees the choice to receive paid time off in lieu of cash wages for overtime. On April 26, 2021, the House Committee on Education and the Workforce approved the Working Families Flexibility Act of 2017 by a party-line vote of 22 to 16, sending the bill to the full House for an upcoming vote, not yet scheduled.