On March 11, 2021, President Biden signed the highly anticipated American Rescue Plan Act of 2021, which provides additional measures to stimulate the economy and provide taxpayers with relief from the economic effects of the COVID-19 pandemic. In addition to direct stimulus payments to eligible citizens, the Act provides a number of employment-related measures of which employers should be aware.
Extension of Federal Unemployment Benefits
Currently, the federal government supplements state unemployment benefits by providing an additional $300 per week. These supplemental unemployment benefits were scheduled to expire on March 14, but the new law extends the extra unemployment benefits until September 6, 2021.
Extension of Tax Credits for Paid Sick and Family Leave
The Family First Coronavirus Response Act (FFCRA), passed in March 2020, obligated employers with less than 500 employees to offer emergency paid sick leave and emergency family and medical leave under certain circumstances relating to the COVID-19 pandemic, such as mandatory quarantines. The law provided employers with payroll tax credits for certain wages paid pursuant to the required paid leave provisions. These paid leave requirements expired on December 31, 2020, but in the Consolidated Appropriations Act, passed in December 2020, Congress gave covered employers the option to continue providing the paid sick and family leaves in order to receive the corresponding tax credits until March 31, 2021. The American Rescue Plan Act extends these optional tax credits to September 30, 2021 and also gives employers the ability to provide 10 additional days of paid leave, in addition to what was provided in 2020, in order to receive additional tax credits. The leave requirements remain voluntary, but must comport with FFCRA requirements to qualify for tax credits.
Expansion of Paycheck Protection Program
The Paycheck Protection Program is amended to include certain nonprofit entities and internet publishing organizations that were not previously eligible for the loans that can be forgiven if the funds are used for qualifying reasons. President Biden also recently announced changes to the Program to make access to the loans more equitable.
Under the new law, COBRA premiums of laid off workers will be considered paid in full through September 30, 2021. The Act states that any eligible individual “shall be treated for purposes of any COBRA continuation provision as having paid in full the amount of such premium.” Employers must provide the 100% subsidy and will be refunded for the subsidy through payroll tax credits. There are also a number of additional notice requirements imposed on employers, so employers whose employees elect COBRA coverage under the Act should take care to ensure they remain eligible for the credits.
The Act allocates an additional $100,000,000 in federal funds to the Occupational Safety and Health Administration (OSHA), a portion of which must be used for enforcement activities related to COVID–19 at high risk workplaces including health care, meat and poultry processing facilities, agricultural workplaces and correctional facilities. Expect OSHA to ramp up enforcement proceedings in the coming months.