CUNA Mutual Group this week issued a risk alert for credit unions regarding the Family First Coronavirus Response Act, which expired on Dec. 31, 2020.
As was previously determined, the requirement to provide FFCRA leave applied only from April 1, 2020 thru Dec. 31, 2020. The FFCRA required certain employers to provide employees with paid sick leave or expanded family and medical leave for specified reasons related to COVID-19. The only relief related to this as part of Stimulus 2.0 was the continuation of the tax credits through March 31, 2021, according to the risk alert.
Credit unions may continue to offer the leave in situations where:
- the need still exists as the number of individuals unable to work or telecommute did not suddenly decrease;
- continuing to offer leave may lessen the number of individuals who contract the virus; or
- there has not a been significant financial impact with paying the out-of- pocket costs for the leave.
However, continuing to offer leave may present credit unions with potential risks, according to the risk alert. Risks may include:
- that because the tax credit is not guaranteed, receiving the credit requires ensuring the IRS requirements are met and failure to administer the leave or being unable to document the qualification for the credit may lead to the credit not applying;
- administering the program to receive the credit can require significant effort in meeting numerous requirements;
- possible discrimination claims may occur if the plan isn’t detailed and followed consistently; and
- staff shortages and work disruptions could occur, depending on how many employees use the leave.
The risk alert provides credit unions with the following mitigation tips:
- review your credit union’s specific situation and quickly decide whether you will continue to offer the leave;
- develop a plan including who will be eligible and for what reason and ensure the plan is followed consistently;
- revise leave policies as appropriate and notify employees in advance of any leave policy changes;
- work with human resources, payroll teams and providers to implement any changes;
- ensure you are following all the IRS requirements for the tax credit;
- be aware of any changes in the event the new administration extends or expands paid leave; and
- ensure you are following all state and local paid leave laws in states where you have branches that may afford time away from work for COVID-19-related reasons.
CUNA Mutual Group’s risk alerts may be accessed on their Protection Resource Center. Log-in is required.