As you know, on March 11th, President Biden signed into law the American Rescue Plan Act (the “Act”). Most of the news coverage on the Act has been focused on the $1400 stimulus checks, but there are a few other key provisions that employers should know!
Keep in mind that, just like when the Families First Coronavirus Response Act (FFCRA) was first passed, we are in a bit of a waiting period on how the Act will be implemented – the Department of Labor should hopefully weigh in with some guidance soon.
In the meantime, here’s what we know.
Expanded Period of Tax Credits for FFCRA Leave
Most importantly, the Act did not make providing more paid FFCRA leave mandatory for employers.
Whew.
But the Act does allow small employers (under 500 employees) to voluntarily provide paid FFCRA leave between April 1, 2021 and September 30, 2021 and claim tax credits for these payments.
Has the amount of FFCRA leave changed, you ask?
Yes, it increased. As described in more detail below, employers can now voluntarily provide employees with up to 14 weeks of expanded FFCRA – this includes 2 weeks of Emergency Paid Sick Leave (“EPSL”) and 12 weeks of Expanded Family and Medical Leave (“EFML”).
EPSL is the portion of FFCRA that provided paid leave when the employee was: (1) subject to a local quarantine or isolation order related to COVID-19; (2) advised by a health care provider to self-quarantine due to COVID-19; (3) experiencing symptoms of COVID-19 and seeking a medical diagnosis; (4) caring for a family member with COVID-19 or who was seeking diagnosis/care; (5) caring for a family member in quarantine; or (6) caring for a child whose school or childcare provider was closed or unavailable because of COVID-19.
EFML was the portion of FFCRA that provided for up to 12 weeks of leave when the employee was caring for a child whose school or childcare provider was closed or unavailable because of COVID-19. The Act deleted the earlier FFCRA provision stating that the first 2 weeks of EFML were unpaid. As a result, employers can now provide a maximum of 12 weeks of paid EFML and claim tax credits for these wages, up to a new cap of $12,000 per employee.
And, did the Act change these “qualifying reasons” as well?
Yes; the Act expanded the qualifying reasons for both EPSL and EFML.
In addition to the original EPSL reasons listed above, EPSL may also be taken if the employee is: (1) receiving the COVID-19 vaccine; (2) recovering from injury, disability, illness, or condition related to a COVID-19 vaccine; or (3) seeking or awaiting the results of a COVID-19 test or diagnosis because the employee has been exposed to COVID-19 or the employer has requested the test or diagnosis.
And, importantly, 12 weeks of EFML may now be used for any of these qualifying reasons for EPSL, as listed above – not just for child-care issues.
But, what about employees who have already used their previous bank of FFCRA leave – can they use more leave?
Yes – at least for the 2-week bank of EPSL as of April 1, 2021. But, we are waiting on the DOL to confirm whether employees also receive a new 12-week bank of EFML.
Anything else?
One more key thing to keep in mind.
If you choose to provide FFCRA leave to employees, make sure that you apply your internal policies consistently across your entire team. Employers are disqualified from claiming tax credits if their voluntary FFCRA leave policies discriminate in favor of highly compensated employees, full-time employees, or employees with a certain length of service to the employer.
And…
Stay tuned for a follow-up article on the Act’s impact on unemployment and COBRA benefits as well!
If you have questions, email Jen at jenv@soulelawfirm.com or contact us at 984-242-0771.