On March 11, 2021, President Biden signed into law the American Rescue Plan Act (ARPA), which extends and expands several provisions of the Families First Coronavirus Response Act (FFCRA).
Tax Credit Extensions
As employers will recall, the FFCRA tax credit had been extended through March 31, 2021 to qualifying employers that voluntarily chose to continue to provide Emergency Paid Sick Leave (EPSL) or Emergency Paid Family Leave (EPFL). The ARPA has now extended the FFCRA from April 1, 2021 through September 30, 2021.
Emergency Paid Sick Leave and Emergency Paid Family Leave Extensions
Under the ARPA, employers are eligible for the tax credit if employers voluntarily provide employees up to 80 hours of EPSL from April 1, 2021 through September 30, 2021. This includes employees who have already used their 80 hours under the FFCRA, essentially creating a refresh of EPSL for all employees.
The FFCRA has required a covered employer to provide a minimum amount of paid time off for EPSL for one of five pandemic-related reasons:
The employee is subject to a government quarantine or isolation order.
The employee is advised by a health care professional to self-quarantine.
The employee is experiencing COVID-19 symptoms and seeking a medical diagnosis.
The employee is caring for an individual who is subject to a government quarantine or isolation order, or who has been advised to self-quarantine by a health care professional.
The employee is caring for a son or daughter whose school or place of care has been closed or whose childcare provider is unavailable.
The ARPA has created broader coverage for these categories. Specifically, with respect to one through three above, an employee is entitled to full payment (100 percent) of his or her daily wages, up to $511 per day and the tax credit will likewise be provided for wages paid up to $511 per day. With respect to four and five, an employee is entitled to payment that is at least two-thirds of his or her daily wages, at least up to $200 per day and the tax credit will likewise be provided for wages paid up to $200 per day.
Notably, the ARPA has expanded the reasons for which an employer must provide EPFL. The expanded reasons include:
the employee is seeking or awaiting the results of a diagnostic test for, or a medical diagnosis of COVID–19,
the employee has been exposed to COVID–19,
the employer has requested such test or diagnosis,
the employee is obtaining immunization related to COVID–19, or
the employee is recovering from any injury, disability, illness, or condition related to such immunization’ after ‘public health emergency.
In addition, the ARPA removed the requirement that the first 10 days of EPFL were unpaid. Now, to claim a credit under the ARPA EPFL, the employer must pay employees for the first 10 days of the leave. Further, the EPFL maximum has been increased to $12,000 per employee (up from $10,000 under the FFCRA).
The ARPA also disqualifies employers from receiving the EPSL and EPFL tax credit if they fail to comply with any provisions of the FFCRA, including its anti-retaliation provision or discriminating in favor of highly compensated employees, full-time employees, or employees based on their employment tenure.