The ARPA Extends and Expands the FFCRA Paid Leave and Tax Credit for Employers Who Opt To Use It

Vandeventer Black LLP

Buried in the American Rescue Plan Act (ARPA), the massive COVID relief bill signed into law on March 11, 2021, is a provision allowing employers to continue to provide, voluntarily, Families First Coronavirus Response Act (FFCRA) paid leave and claim the corresponding tax credits through September 30, 2021. As the FFCRA expired on December 31, 2020, no employers are required to provide the FFCRA paid leave anymore. Previously, the Consolidated Appropriations Act of 2021, gave employers the option to provide FFCRA voluntarily to employees and claim the tax credits through March 31, 2021. The ARPA now expands the window for voluntary FFCRA leave through September 30, 2021, but with key changes greatly expanding the original FFCRA leave.

Under the ARPA, to receive a tax credit for FFCRA leave provided from April 1, 2021, through September 30, 2021, the leave must be provided for a qualifying reason under either the FFCRA’s Emergency Family Leave Act (EFMLA) or Emergency Paid Sick Leave (EPSL) provisions. The ARPA expands both EFMLA and EPSL. It expands EFMLA to apply to the same leave reasons as all the EPSL categories, whereas previously EFMLA was limited to EPSL Category 5, and to provide paid EFMLA for up to 12 weeks, whereas previously the first two weeks were unpaid. The ARPA increases the maximum EFMLA pay to $12,000. In addition, the ARPA expands EPSL Category 3 to include leave for an employee (a) seeking or awaiting the results of a COVID test or medical diagnosis, if the employee has been exposed or the employee’s employer has requested the test or diagnosis; (b) obtaining COVID immunization; or (c) recovering from an injury, disability, illness, or condition related to such immunization. The ARPA allows employees a new allotment of 10 days of EPSL for each calendar year and, in the case of 2021, without regard to any EPSL used before April 1, 2021.  

Again, this expanded FFCRA is optional. Employers do not have to offer this paid leave to employees. If employers choose to do so, however, they will need to comply with the modified law and obtain the required documentation in order to claim the tax credit. Employers who chose to extend the FFCRA to March 31, 2021, are not locked into an extension to September 30, 2021. In light of the expanded reasons that employees may take up to 12 weeks of paid EFMLA under the ARPA, employers should carefully consider whether to voluntarily extend FFCRA again.


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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