On March 11, 2021, President Biden signed H.R.1319 - American Rescue Plan Act of 2021 (“Rescue Plan”) into law—a $1.9 trillion stimulus bill. Here are five things every employer should know about the bill.
1. FFCRA Tax Credits Have Been Extended
The Rescue Plan extends the Families First Coronavirus Response Act (FFCRA) tax credit provisions—again—through September 30, 2021. (The ability to recoup the cost of FFCRA leave was previously extended in December 2020 through March 31, 2021: See related article here. Employers that opt to voluntarily provide FFCRA leave will be credited 100 percent for all qualifying wages paid under the FFCRA.
Any employer already providing FFCRA-like leave to employees under state, county, and/or local paid sick leave ordinances, especially if their business is located in California (e.g., Cal/OSHA’s COVID-19 Prevention Emergency Temporary Standards) should consider opting to voluntarily provide FFCRA-compliant leave, as by doing so they may be able at least partially to recoup the cost of leave they are otherwise already required to provide.
2. FFCRA Tax Credits Are Only Available to Employers That Offer Them Universally to All Employees
The Rescue Plan makes clear that tax credits are not available to employers that provide FFCRA leave only to highly compensated employees, full-time employees, or employees on the basis of employment tenure. Employers that offer FFCRA leave benefits only to a select group of employees are at risk of being unable to recoup the cost of such leaves with tax credits.
3. Employees Can Get FFCRA Leave Again (for a Second Time)
The limitation on the overall number of hours/days taken into account for Emergency Paid Sick Leave and Emergency Family and Medical Leave Expansion Act will reset after March 31, 2021. Employees who took FFCRA leave prior to March 31, 2021 will be eligible for the full amount of leave again after March 31, 2021.
4. There are Two New Qualifying Reasons for FFCRA Leave
Under the FFCRA, an employee qualifies for paid sick time if the employee is unable to work (or unable to telework) due to a need for leave because the employee:
(1) is subject to a federal, state, or local quarantine or isolation order related to COVID-19;
(2) has been advised by a health care provider to self-quarantine related to COVID-19;
(3) is experiencing COVID-19 symptoms and is seeking a medical diagnosis;
(4) is caring for an individual subject to a federal, state, or local quarantine or isolation order related to COVID-19 or caring for an individual who has been advised by a health care provider to self-quarantine related to COVID-19;
(5) is caring for a child whose school or place of care is closed (or child-care provider is unavailable) for reasons related to COVID-19; or
(6) is experiencing any other substantially similar condition specified by the Secretary of Health and Human Services, in consultation with the Secretaries of Labor and Treasury.
In addition to the six reasons stated above, an employee now qualifies for paid sick time if the employee is unable to work (or unable to telework) due to a need for leave because the employee:
(7) is obtaining an immunization related to COVID–19; or
(8) is recovering from any injury, disability, illness, or condition related to such immunization.
5. COBRA Insurance Premiums Will Cost Employees Nothing From April 1, 2021 Through Sept. 30, 2021
The Rescue Plan also provides that the federal government will subsidize 100 percent of COBRA insurance premiums from April 1, 2021 through Sept. 30, 2021 for eligible employees who involuntarily lost their jobs because of the pandemic. In other words, involuntarily terminated employees may remain on their employer’s health insurance plan through Sept. 30, 2021 and the federal government will foot the bill.
Disclaimer: Laws, regulations, and guidance on matters related to COVID-19 change rapidly. Please contact your Payne & Fears attorney for current guidance.