Earlier today, a divided Congress approved the American Rescue Plan Act. The Act was the result of President Biden’s sweeping $1.9 trillion COVID-19 stimulus plan. President Biden is expected to sign the Act into law as early as later this week. The Act is a narrower version of President Biden’s original vision, which we previously discussed. The Act contains wide-ranging support to American families and businesses, delivers critical resources to public health and provides provisions aimed at economic recovery. Notably, and the subject of this Alert, the Act renews the optional federal emergency paid sick and family leave along with tax credits.
As we’ve previously discussed, the Families First Coronavirus Response Act (FFCRA) expired on December 31, 2020, eliminating employers’ mandatory obligation to provide emergency paid sick and family leave. In response, then-President Trump signed the 2021 Consolidated Appropriations Act (CAA), permitting employers to decide whether their companies would provide paid leave and, therefore, be eligible for the payroll tax credit. Until now, this option was available until March 31, 2021.
What’s new in the current act?
What should you do to prepare?