Rescue Plan Resuscitates FFCRA Tax Credits!

Ruder Ware
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Just when we thought the Families First Coronavirus Response Act was about to disappear into HR history, we have another extension  (to the tax credits for voluntarily providing qualifying leave)!  Here is what you need to know:

  1. The American Rescue Plan extension (“Extension”) applies to both the Emergency Family and Medical Leave Expansion Act (EFMLEA) and Emergency Paid Sick Leave Act (EPSLA).
  2. It starts April 1, 2021 and runs through September 30, 2021. The previous extension was set to expire March 31.
  3. The definition of “employer” has not changed (if you work for a company with over 500 employees and have been ignoring everything you get on the FFCRA—go ahead and hit delete now).
  4. With respect to the EPSLA, the tax credit is 100 % for up to 10 days of paid sick leave, up to $200 or $511 per day. The following changes to EPSLA are new:

a) Employees get a NEW bank of 10 paid days to use starting April 1, 2021.

b) Employees can now take EPSLA for additional reasons:

i) leave to obtain the COVID-19 vaccine;

ii) leave to recover from any illness arising out of getting the vaccine; and

iii) they are seeking or waiting for the results of a COVID-19 test that was required by their employer or prompted by their exposure to COVID-19. (I know …you are wondering how are we going to know they were exposed? We will see if we get guidance from the DOL on that!)

  1. With respect to the EFMLEA, the tax credit is 100% up to $200 per day and $12,000 in the aggregate. The following changes to EFMLEA are new:

a) Employees can now take EFMLEA for ALL the same reasons that are available under EPSLA—including the new COVID testing and vaccine leave. EFMLEA  leave is no longer limited to just care for child if school/place of care is closed.

b) The two-week “waiting” period has been removed. So all 12 weeks of EFMLEA can be paid.

  1. Employers may not discriminate in favor of highly compensated employees, full-time employees, or employees with a certain amount of tenure. This means new hires are eligible for the Extension.

The Department of Labor is expected to issue guidance to employers on the new Extension.  We will keep you apprised of any guidance.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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