President Biden called on employers to give workers paid time off to get vaccinated against COVID-19, as well as to recover from any side effects: “No working American should lose a single dollar from their paycheck because they chose to fulfill their patriotic duty of getting vaccinated.”

Under the American Rescue Plan, all private employers with fewer than 500 employees, plus state and local governments, can receive refundable tax credits that reimburse employers for the cost of providing paid sick and family leave to their employees due to COVID-19, including leave taken by employees to receive or recover from COVID-19 vaccinations.

According to the Internal Revenue Service (IRS), the tax credits are available for wages paid for leave from April 1, 2021, through September 30, 2021. The paid leave credits are tax credits against the employer’s share of the Medicare tax. Since the credits are refundable, the employer gets the total amount of the eligible credits if it exceeds the employer’s share of the Medicare tax. The tax credit for sick leave is equal to two weeks or 80 hours of COVID-19 related leave, which is limited to $511 per day or a total of $5,110. The tax credit for family leave wages is paid for up to 12 weeks and is limited to $200 per day or a total of $12,000, at two-thirds of the employee’s regular rate of pay. Employers would claim the credits on Form 941, which is the Employer’s Quarterly Federal Tax Return. Additional information from the IRS is available here.

House Passes the Paycheck Fairness Act

The House of Representatives passed the Paycheck Fairness Act (H.R. 7) by a narrow margin of 217 – 210. The House of Representatives had passed this bill in the previous Congressional session. In commending the House of Representatives for passing the bill, President Biden issued a statement advising that “[c]losing the gender pay gap is more than just an economic imperative — it’s a moral imperative as well.” Read the complete Administration statement.

The bill would modify the “factor other than sex” defense that is part of the Equal Pay Act of 1963 to provide that it would apply only “if the employer demonstrates that such factor (i) is not based upon or derived from a sex-based differential in compensation; (ii) is job-related with respect to the position in question; (iii) is consistent with business necessity; and (iv) accounts for the entire differential in compensation at issue. Such defense shall not apply where the employee demonstrates that an alternative employment practice exists that would serve the same business purpose without producing such differential and that the employer has refused to adopt such alternative practice.” The bill would prohibit retaliation for disclosing salary information, asking about the employer’s wage practices, or disclosing their own wages to coworkers. Employers would be prohibited from requesting wage information from applicants — several states and localities have passed laws that prevent employers from obtaining this information. The bill would provide for compensatory and punitive damages.

A companion bill (S. 205) has been introduced in the Senate. Due to the current filibuster rules that can require 60 votes to consider a bill, the Paycheck Fairness Act has an uncertain chance of passing the Senate and being signed into law by President Biden.

DOL Changes Policy on FLSA Liquidated Damages

The Department of Labor has announced that it would resume seeking liquidated damages in settlements of Fair Labor Standards Act (FLSA) violations that are reached in lieu of litigation. Liquidated damages can equal 100% of the back pay owed, resulting in the doubling of the damages assessed for wage violations. The change was announced on April 9, 2021, in Field Assistance Bulletin No. 2021-2. This field assistance rescinded Field Assistance Bulletin No. 2020-2, which was issued on June 24, 2020, and had reduced the cases in which liquidated damages would be assessed to those involving bad faith and willfulness on the part of the employer. The Wage and Hour Division will return to seeking liquidated damages from employers provided that the Regional Solicitor of Labor concurs with the request.

Labor Department Expands Unemployment Eligibility

The Department of Labor has expanded the pandemic unemployment assistance eligibility to include those workers who refused to “work or accept an offer of work at a worksite not in compliance with coronavirus health and safety standards.” The expansion is retroactive to the beginning of the pandemic unemployment assistance program. However, those individuals whose first claim is filed after December 27, 2020, are limited to weeks of unemployment beginning on or after December 6, 2020. 

Neil Reichenberg is the former executive director of the International Public Management Association for Human Resources. He is an attorney, a frequent writer and speaker on public policy and human resource issues, and an adjunct faculty member at George Mason University. For questions or additional information, contact Reichenberg at [email protected].