As 2020 draws to a close, we want to update you on recent labor and employment law developments, including the federal government’s year-end stimulus package signed into law yesterday and 2021 increases to the minimum wage in Minnesota.
Highlights of Federal Year-End Stimulus Package
Yesterday, the President signed the $900 billion economic stimulus bill that was passed by Congress before the Christmas holiday. Several provisions of the law will have a direct impact on many workplaces—including the expiration of FFCRA leaves, the addition of new supplemental federal unemployment benefits, and extension of the employee retention tax credit. The bill also apportions additional funding to a revamped Paycheck Protection Program (PPP).
1. FFCRA Leave Expires, But Voluntary Continuation by Employers Allowed, Tax Credits Continue Through March
Expiring FFCRA Leave: Congress enacted the Families First Coronavirus Response Act (FFCRA) in the spring of 2020 (outlined in a prior alert: Strategies to Implement COVID-19 Paid Leave and Unemployment Benefits) which among other things, required employers with fewer than 500 employees to provide emergency paid sick or Family Medical Leave Act (FMLA) leave. Those benefits are set to expire on December 31, 2020, and have not been extended by the most recent legislation. Thus, as of year-end, no employer will be required to offer emergency paid sick or paid FMLA leave due to the pandemic. Employers still may be required to offer paid leave under state laws, local laws, or their own policies. And in some circumstances, COVID-related illness may qualify an employee for FMLA leave for their own, or a family member’s, serious medical condition, or may trigger an accommodation requirement under the Americans with Disabilities Act (ADA).
Voluntary Continuation and Rebates Through Q1 of 2021: The new legislation allows employers to voluntarily provide FFCRA paid sick or paid FMLA leave through the first quarter of 2021 for employees who have not yet exhausted their FFCRA leave. (Please call us to discuss employees who have used part of their FFCRA paid leave or FMLA benefit, as their continued eligibility for leave in 2021 may vary depending on their use of FFCRA leave in 2020 and elections you have made as an employer in your FMLA policy.) Employers who voluntarily provide such leave after December 31, 2020 are eligible for the federal FFCRA tax credit for leave provided through March 31, 2021, up to the pay limits included in the original legislation. (The various leaves available, and pay limits for the tax rebate, are outlined in our prior alerts and resources found here: FFCRA Paid Leave Flow Charts and Claiming Tax Credits for COVID-19 Related Leaves Under the Families First Act). Voluntary leave provided after March 2021 will not qualify for the federal tax rebate.
2. Additional Unemployment Benefits
Under the new relief package, the federal government will provide an additional $300 per week in unemployment benefits for 11 weeks. As a practical matter, this means that unemployment recipients will receive an additional $300 per week from December 26, 2020 through March 14, 2021. In addition, the legislation increases the maximum number of weeks that an individual on unemployment may claim to 50 weeks.
(As you may have read, the Minnesota legislature passed a law earlier this month that provided for provisional supplemental unemployment benefits that would be available if the federal legislation described here did not pass. With the passage of this stimulus bill, the Minnesota supplemental benefits will not go into effect.)
The legislation also continues the Pandemic Unemployment Assistance program (or PUA), which provides coverage for those in non-traditional employment (such as independent contractors or individuals who are self-employed) and the Pandemic Emergency Unemployment Compensation program (or PEUC), which authorizes additional federally-funded unemployment benefits to those who no longer qualify for regular state benefits. The legislation increases from 13 weeks to 24 weeks the number of benefit weeks under the PEUC.
Other additional unemployment benefits may be available. Minnesota Employment and Economic Development (MDEED) will update its website, available here, with additional information regarding expanded unemployment benefits.
3. Employee Retention Tax Credit
The legislation makes changes to the employee retention tax credit, including extending it through June 2021 and allowing recipients of PPP loans to claim the credit under certain circumstances. Employers should consult with their tax advisors for additional information regarding potential tax benefits provided by the law.
4. No Liability Protections for Employers
Earlier this year, congressional Republicans lobbied for liability protections for employers facing potential employment claims arising from COVID-19. Those efforts failed and the recent legislation does not include such liability protections. Although Minnesota has not instituted any such liability shields, some other states have. We urge our employer clients to contact us if you have employees in other states and have questions about potential liability protection relating to employment actions taken because of the pandemic.
Minnesota Increases Minimum Wage
Effective January 1, 2021, Minnesota’s minimum-wage rates will be increasing as follows:
- $10.08 per hour for “large employers,” i.e., employers with annual gross revenues of $500,000 or more.
- $8.21 per hour for “small employers,” i.e., employers with annual gross revenues of less than $500,000.
- The training wage rate of $8.21 per hour may be paid to employees younger than age 20 for the first 90 consecutive days of employment.
- The youth wage rate of $8.21 per hour may be paid to employees younger than age 18.
Updated posters outlining these minimum wages (as well as any other state-mandated posters) must be displayed where all employees can easily see them (such as in a break room or other common area). The new minimum wage poster is available to print or order here.
The cities of Minneapolis and St. Paul also have approved increases to their minimum wages, but those increases do not become effective until July 1, 2021.
Finally, under Minnesota’s wage theft law (see our prior alert on this law), before any increases (or decreases) in employee wages occur, the employee must be provided written notice of that change.
2020 has been a busy year for HR professionals and labor and employment lawyers. With President-Elect Biden’s inauguration set for January 20, 2021, we expect to see further employment law developments after the new year. Watch this space for updates as developments occur. In the meantime, we wish you and yours a healthy and happy new year!