On March 11, 2021, President Joe Biden signed into law the American Rescue Plan Act (ARPA) of 2021 to provide economic relief during the coronavirus pandemic. The $1.9 trillion measure has several provisions of note that directly affect employers.
Paid Leave
While the ARPA does not require employers to provide paid leave for employee absences related to COVID-19, it does extend the tax credit allowed for voluntarily extending FFCRA-like leave from March 31, 2021, to September 30, 2021.
The tax credits are also available for these additional qualifying reasons for paid leave:
The employee is obtaining a COVID-19 vaccination.
The employee is recovering from any illness related to receiving the vaccine.
The employee is seeking or waiting for test results or a medical diagnosis for COVID-19, or the employer has requested the employee to obtain the same.
As of April 1, 2021, employers may voluntarily offer another 10 days of paid sick leave to employees and receive a tax credit for doing so.
Employers may now also offer emergency FMLA leave (EFMLA) for all FFCRA-qualifying reasons for leave (i.e., those previously only offered for emergency paid sick leave), including the newly added reasons above, and receive a tax credit. Previously under the FFCRA, EFMLA was only available for leave needed to care for a child whose school was closed or whose caregiver was unavailable due to COVID-19.
The first two weeks of EFMLA may now be paid at 2/3 the regular rate of pay (previously unpaid) and eligible for the tax credit. This raises the maximum tax credit limit for EFMLA from $10,000 to $12,000 per employee.
The tax credit will also now only be eligible to those employers who offer this paid leave in a manner that does not discriminate against those employees who are highly compensated, are full-time status or by an employee's years of service. Leave must be offered uniformly to employees.
Unemployment
The act extends three unemployment programs through September 6, 2021 – Pandemic Emergency Unemployment Compensation (PEUC), the Pandemic Unemployment Assistance (PUA) and the Federal Pandemic Unemployment Compensation (FPUC)/Mixed Earners Unemployment Compensation (MEUC).
PUA and PEUC are continued at the current $300-per-week boost to unemployment benefits, and the MEUC is continued at the current $100-per-week boost.
For those workers who received unemployment compensation in 2020, the first $10,200 is now tax-free for households with less than $150,000 in income.
The Employee Retention Credit
This credit, enacted under the CARES Act, is extended to Dec. 31, 2021. It allows qualifying employers to claim a credit for wages paid to workers they retained on their payroll during the pandemic.
Small Businesses
New grants for up to $10 million are available to restaurants and other food and beverage establishments through the Small Business Administration (SBA).
The Paycheck Protection Program is additionally funded with $7 billion.
The Shuttered Venue Operators Grant program.
An additional $15 billion will be available for Economic Injury Disaster Loans through the SBA, with priority funding for employers with less than 10 employees.