Last Thursday, President Biden signed into law the $1.9 trillion stimulus package called the American Rescue Plan. While the final version of the bill did not include the much-debated increase in the federal minimum wage, it did include several key provisions that directly affect employers that continue to voluntarily provide paid leave under the Families First Coronavirus Response Act.

Payroll tax credits extended to September 30

As you will recall, the FFCRA’s mandatory requirement to provide emergency paid sick leave or expanded family medical leave expired on December 31, 2020. Employers were, in return, eligible for payroll tax credits to offset the cost of that leave. In late December 2020, as part of a $900 billion stimulus bill, Congress voted to extend those tax credits until March 31, 2021 for employers that continued to voluntarily offer paid leave under the FFCRA. While the American Rescue Plan does not reinstate the employer mandate to provide emergency paid leave or emergency FMLA leave for qualifying events, it does further extend the tax credits to employers through September 30, 2021.

Expanded eligibility for paid leave

The American Rescue Plan expands the types of leave available under the FFCRA. Leave can now be taken: (1) when an employee is obtaining a COVID-198 vaccination; (2) when an employee is suffering or recovering from side effects related to the COVID-19 vaccination; and (3) when an employee is seeking or waiting the results of a COVID-19 test if the employee has either been exposed to COVID-19 or the employer has requested the COVID-19 test.

Changes to EFMLA pay

The American Rescue Plan also changes the entitlement to emergency Family & Medical Leave Act pay. Previously, the first two weeks of emergency FMLA were unpaid. Under the American Rescue Plan, all 12 weeks of emergency FMLA can be paid. Moreover, the emergency FMLA benefits have been expanded to include all of the reasons an employee can take emergency paid sick leave. Under the original version of the FFCRA, emergency FMLA was only available for school or childcare issues.

Leave must be offered to all current employees

Additionally, the new law clarifies that employers cannot discriminate in granting paid sick leave or emergency FMLA to a certain class of employee. This means that if an employer offers paid leave under the FFCRA, it must be offered to all employees, including newly hired employees and part-time employees. Employers are free, however, to choose to offer paid sick leave but choose not to offer paid emergency FMLA.

Employee banks of emergency paid sick leave reset April 1

Finally, the American Rescue Plan resets the amount of emergency paid sick leave under the FFCRA. Starting April 1, 2021, if an employer continues to offer FFCRA leave, the employer can claim a payroll tax credit to offset up to 10 days of wages paid as qualified emergency paid sick leave, even if employees previously exhausted their emergency paid sick leave entitlement.