When the clock struck midnight on December 31, 2020, the Families First Coronavirus Response Act (FFCRA) expired. But, employers are getting another opportunity at assistance. President Biden signed the American Rescue Plan Act of 2021 (ARPA). This Act has two notable impacts on employers: (1) It extends the payroll tax credits granted for providing COVID-related paid leave put in place by the FFCRA to continue from April 1, 2021 through September 30, 2021, and (2) expands employer application of FFCRA-related leave to include up to 14 weeks of paid leave per employee.

The FFCRA, applicable to private employers with less than 500 employees, established Emergency Paid Sick Leave (EPSL) and Emergency Family Medical Leave (EFML) banks. These banks were designed for employers to utilize in instances employees were unable to work due to COVID-related circumstances. Those circumstances include employees experiencing COVID symptoms and awaiting testing; employees advised to quarantine by a health professional; employees advised to quarantine based on state or federal regulations; employees who need to care for a loved one with COVID-related circumstances; or employees who need to provide childcare due to school or a caregiver affected by COVID-19.

The FFCRA was originally temporarily extended with the passing of the COVID Relief Bill on December 22, 2020. This allowed employers to voluntarily use remaining FFCRA-mandated employee leave through March 31, 2021, and still receive the associated tax credit.

How is ARPA different from this initial extension? ARPA not only creates a new expiration date, but grants employers new and more inclusive leave banks. Employers are now provided an additional 80 hours of EPSL per employee. ARPA also broadens EPSL to be applicable to leave associated with awaiting testing due to an employer’s request or a COVID exposure, receiving a COVID vaccine, or recovery time from side effects caused by the vaccine. This may be a motivator in businesses encouraging workers to get vaccinated.

Additionally, ARPA adjusted EFMLA to not only be used for childcare purposes, but for any of the qualifying EPSL COVID-related leave reasons stated above. The full 12 weeks of family leave are now provided at 2/3 pay, also increasing the possible tax credit from $10,000 to $12,000. Employers will not receive the tax credit for discriminatory practices, such as leave allowances favoring employees of higher pay or tenure.

ARPA remains voluntary for employers. Though it is optional, it may provide employers the temporary safety net they need to safely continue in-person operations, knowing they have the ability to provide adequate leave benefits to employees when needed.

If an employer does opt into continued use of EPSL and EFML, they should ensure it is properly communicated to employees, and that policies are updated accordingly. Clear documentation of leave amounts and reasonings should be recorded to receive the tax credit. Businesses should also stay vigilant as to any additional state-mandated leave requirements.

If you have questions related to ARPA and the leave assistance it provides, contact Laura Rubenstein at lrubenstein@RKWlawgroup.com

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