We are bringing back our popular “Thursday Thoughts on Employment” this week with a brief look at employer obligations under the American Rescue Plan Act of 2021 (“ARPA”). Sold as an economic recovery package intended to help the United States recover from the devastating effects of the COVID-19 pandemic, President Biden signed this bill into law on March 11, 2021. Most notably for employers, the ARPA extends the tax credits under the Families First Coronavirus Response Act (“FFCRA”).
As you will recall (here and here), FFCRA mandated employers of fewer than 500 employees to provide up to 2 weeks of paid sick leave and up to an additional 10 weeks of paid family leave to employees for certain COVID-19 related reasons, offering a dollar-for-dollar tax credit to offset the obligation. This mandate lasted through December 31, 2020, but employers were allowed to opt-in through March 31, 2021. As predicted, this new legislation further extends and expands FFCRA as follows:
- Employers may elect to provide employees with 2 weeks of emergency sick leave for use during the second and third quarters of 2021 (April 1 – September 31, 2021). Consider this a reset of the sick leave bank. Employees don’t carry over unused emergency sick leave. If they used 2 weeks previous to April 1st, they can use an additional 2 weeks now. Also, keep in mind that employers who elect to offer FFCRA must now (in addition to the already established 6 authorized reasons) allow employees to take emergency leave if they want to get a COVID-19 vaccination, if they are suffering side effects of the vaccination, or if they are waiting for COVID-19 test results.
- Emergency family leave is significantly expanded. You will recall that previously, emergency family leave could only be taken when an employee needed to care for a child whose school/day care was closed for COVID-19 related reasons. ARPA has expanded emergency family leave to include the original reasons and all of the emergency sick leave reasons. Also, FFCRA no longer requires that the first 2 weeks of emergency family leave be unpaid – so, employers can now provide up to 12 weeks of paid emergency family leave and receive dollar for dollar payroll tax credit with an aggregate cap on payroll tax credit per employee at $12,000.
Please note… participation is voluntary but it is important to apply this leave in a nondiscriminatory manner. Now… if only participation in COVID were voluntary! Contact me if you want to talk further about FFCRA.