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Employment Law Alert – American Rescue Plan Act Expands Available Tax Credits for Employers

March 23, 2021

On March 11, 2021, President Biden signed into law the American Rescue Plan Act of 2021 (“ARPA”). This new law extends the period for which tax credits are available to employers who continue to voluntarily provide the same kind of paid sick and/or family leave first provided for by the Families First Coronavirus Response Act (“FFCRA”).

As you may recall, employers were mandated to provide emergency paid sick leave and emergency paid family and medical leave under the FFCRA, but the mandate expired on December 31, 2020. The Consolidated Appropriations Act of 2021 allowed employers to voluntarily provide paid sick leave and/or paid family leave under the same terms as provided under the FFCRA and to continue taking the tax credit through March 31, 2021. Under the ARPA, employers who continue to provide qualified paid sick and/or family leave may receive a tax credit for these wages from April 1, 2021 through September 30, 2021.

Under the FFCRA, qualifying reasons for providing paid sick leave were limited to six circumstances, including because the employee: (1) is subject to a federal, state or local quarantine or isolation related to COVID-19; (2) has been advised by a healthcare provider to self-quarantine; (3) is experiencing COVID-19 symptoms and seeking a diagnosis; (4) is caring for an individual who is subject to quarantine or is self-quarantining; (5) is caring for a child whose school or place of care is closed (or child care provider is unavailable) because of COVID-19 or (6) is experiencing any other substantially similar condition specified by the US Secretary of Health and Human Services. Now, the ARPA adds three new reasons that an employee may qualify for paid sick leave to include the following:

  • Obtaining a COVID-19 immunization;
  • Recovering from an injury, disability, illness or condition related to a COVID-19 immunization; or
  • Seeking or awaiting the results of a COVID-19 test or diagnosis because either the employee has been exposed to COVID or the employer requested the test or diagnosis

The ARPA also provides the employees of participating employers a new 10-day allotment of paid sick leave on April 1, 2021. This new allotment is available without respect to any paid sick leave used before April 1, 2021.

The ARPA also expands the reasons for which emergency paid family leave can be provided. Under the FFCRA, this leave was only available if employees were unable to work due to childcare-related reasons. Now, under the ARPA, paid family leave is available for these same childcare-related reasons, plus the six sick leave qualifying reasons listed above, plus the three new reasons previously listed.

As a reminder: this expanded FFRCA is optional. Employers are not required to make this additional paid leave available to their employees. However, should they so choose, all requirements (i.e. documentation) must be complied with in order to qualify for the previously mentioned tax credit.

Employers considering continuing to provide this voluntary paid leave may wish to consult with an attorney to ensure they understand and comply with all applicable federal, state and local laws.

Shulman Rogers attorneys are available to discuss this Alert and answer specific questions regarding this new legislation.


MORE INFORMATION

The contents of this Alert are for informational purposes only and do not constitute legal advice. If you have any questions about this Alert, please contact the Shulman Rogers attorney with whom you regularly work or a member of the Shulman Rogers Employment and Labor Law Group.