On March 11, 2021, President Biden signed into law the $1.9 trillion COVID-19 relief bill known as the American Rescue Plan Act of 2021. This law contains key provisions and makes related changes to the Families First Coronavirus Response Act (“FFCRA”) that may impact employers.
The FFCRA expired on December 31, 2020, but shortly before the end of the year, Congress extended the tax credit for employers who voluntarily continued to provide such paid leave through March 31, 2021. This law includes the following provisions and changes to the FFCRA:
- Tax credits continue to be available for employers who voluntarily provide FFCRA leave from March 31, 2021 to September 30, 2021.
- Tax credits are also available for paid sick leave and family and medical leave used for the following additional reasons:
- The employee is seeking or awaiting the results of a diagnostic test for, or a medical diagnosis of, COVID-19 and such employee has been exposed to COVID-19 or the employee’s employer has requested such test or diagnosis;
- The employee is obtaining immunization (vaccination) related to COVID-19; or
- The employee is recovering from any injury, disability, illness or condition related to such immunization (vaccination).
3. New non-discrimination rules provide that no tax credit is available if the employer, in determining availability of paid sick leave and family and medical leave, discriminates in favor of highly compensated employees, full-time employees, or employees on the basis of employment tenure with the employer. This provision appears designed to compel employers who voluntarily provide leave to do so in a uniform manner, without discriminating against certain categories of workers.
4. Beginning April 1, 2021, an employer may voluntarily provide 10 days of FFCRA paid sick leave, and receive a tax credit for such leave. If an employer voluntarily provides such leave and the employee takes such leave for one of the new reasons stated above and qualifying reasons 1, 2 and 3, the employer must pay the employee’s regular rate of pay, subject to the cap of $511/day and $5,110 in the aggregate. If an employer voluntarily provides such leave and the employee takes such leave for qualifying reasons 4, 5, and 6, the employer must pay the employee two-thirds of the employee’s regular rate of pay, subject to the cap of $200/day and $2,000 in the aggregate. This means that an employee who already received or did not use 10 days of FFCRA paid sick leave in 2020 can now receive 10 days of FFCRA paid sick leave beginning April 1, 2021, assuming his or her employer voluntarily provides such leave.
5. Beginning April 1, 2021, an employer may also voluntarily provide 12 weeks of FFCRA family and medical leave, and receive a tax credit for such leave. An employer, who voluntarily provides such leave, must pay the employee two-thirds of the employee’s regular rate of pay, subject to the cap of $200/day and $12,000 in the aggregate. This means that an employee who already received or did not use 12 weeks of FFCRA family and medical leave in 2020 can now receive 12 weeks of FFCRA family and medical leave beginning April 1, 2021, assuming his or her employer voluntarily provides such leave.
For additional information on this or any related topic, please contact any of the KDDK labor and employment law professionals.
