The American Rescue Plan Act (ARPA), enacted March 11, 2021, includes changes to emergency paid sick leave and paid family leave under the Families First Coronavirus Response Act (FFCRA). The ARPA extended tax credits through Sept. 30, 2021, for employers that continue to provide FFCRA leave voluntarily (beyond the Dec. 31, 2020, expiration date) and made changes to tax credit eligibility for both types of FFCRA leave. It continues to apply only to employers with fewer than 500 employees.
Key Changes:
- The ARPA permits the FFCRA tax credit for a new bank of emergency paid sick leave (EPSL), beginning April 1, 2021. The amount of the new leave is 80 hours per employee. Even if an employee previously used the full 80 hours (e.g., in 2020), the employee could be eligible for a new set of 80 hours of sick leave starting April 1st.
- In addition to the original reasons to take a paid leave, employees have 3 new reasons:
- the employee is obtaining immunization (vaccination) related to COVID-19;
- the employee is recovering from any injury, disability, illness or condition related to such vaccination; or
- the employee is seeking or awaiting the results of a diagnostic test or medical diagnosis for COVID-19 (or their employer has requested such a test or diagnosis).
- The new law allows employees to take up to 12 weeks (10 additional after the first 2 paid sick leave weeks) of paid Emergency FMLA for all qualifying reasons under EFMLA and EPSL. Previously, employees were only eligible for pay and tax credits in weeks 3 through 12 if they were caring for a child whose school was closed related to COVID-19.
- Example: John Smith is an employee and is diagnosed with COVID-19 and has symptoms from April 1, 2021 through September 2021.
- For the 10 days (2 weeks) of EPSL, John would receive 100% pay (max of $511/day).
- Starting on Day 11 (when EFMLA begins), John would receive 2/3 pay with a max of $200/day for the remaining 10 weeks.
In providing FFCRA leave, employers may not discriminate in favor of highly compensated employees, full-time employees or on the basis of employment tenure. Discrimination of this nature will make the leave ineligible for the tax credit for the calendar quarter in which the discrimination occurred.
We recently released an HR Compliance Bulletin with updates to state-required paid leave for COVID-19 absences. Click the following link to read States Update Leave Rules in Response to Coronavirus.
Contact us if you have any questions about FFCRA, ARPA or other state-required paid leave.