The American Rescue Plan Act of 2021 was signed into law on March 11, 2021. There are provisions of the Act which provide benefits to both employees and employers.
Emergency Paid Sick Leave and Emergency Family Medical Leave
The Families First Coronavirus Response Act (FFCRA) expired on December 31, 2020. Therefore, Congress enacted the Consolidated Appropriations Act, 2021, which extended the payroll tax credits to employers who voluntarily provided emergency paid sick leave (EPSL) and emergency family and medical leave (EFMLA) benefits to employees. The Consolidated Appropriations Act of 2021 expired on March 31, 2021. The American Rescue Plan Act extends the availability of the tax credits through September 2021 for employers who voluntarily offer EPSL or EFMLA.
The American Rescue Plan Act included additional provisions regarding COVID-19 vaccination issues and regulations on administering the EPSL and EFMLA benefits. For example:
- The Act expands the qualifying reasons for EPSL and EFMLA to include:
- time spent getting a COVID-19 vaccine
- time spent recovering from a COVID-19 vaccination, and
- reasons for receiving EPSL also are a basis for receiving EFMLA.
- The Act eliminates the initial two-week unpaid portion of EFMLA and raises the maximum tax credit employees may receive per employee from $10,000 to $12,000.
- Effective March 31, 2021, each employee’s bank of available EPSL will reset such that employers may choose to provide additional EPSL to employees who previously exhausted their EPSL.
- A new anti-discrimination provision prohibits employers from claiming the tax credits if, in making the leave available to some employees but not to others, the employers discriminate in favor of highly compensated employees, full-time employees, or employees with longer tenure.
Unemployment Assistance
The American Rescue Plan Act extends federal unemployment benefits provided by the CARES Act through Sept. 6, 2021.
- Pandemic Unemployment Assistance (PUA) increases the total number of weeks of PUA benefits available to eligible individuals, including self-employed workers, freelancers, independent contractors, and part-time workers, from 50 to 79 weeks.
- Federal Pandemic Unemployment Compensation (FPUC) continues the federal FPUC supplement of $300 per week for unemployment between March 14, 2021, and Sept. 6, 2021.
- Pandemic Emergency Unemployment Compensation (PEUC) provides up to 53 weeks of federal unemployment benefits to individuals who have exhausted state unemployment benefits.
- For taxpayers whose adjusted gross income in 2020 was less than $150,000, the first $10,200 in unemployment benefits from gross income will be excluded and is therefore not taxable.
We expect that further guidance will be provided by governing agencies in the near future. We will keep you apprised of further developments as they occur. In the meantime, if you have any questions, please contact a member of our Labor & Employment Section.