[co-author: Cynthia Park - Law Clerk]
On March 11, 2021, President Biden signed H.R. 1319, the American Rescue Plan Act of 2021 (“Act”), into law. Among other things, the $1.9 trillion stimulus package extends and enhances the Families First Coronavirus Response Act (“FFCRA”) tax credits for employers that opt to provide FFCRA paid leave benefits, expands the reasons for which eligible employees may qualify for emergency paid sick leave (“EPSL”), and grants additional paid sick and emergency paid family and medical leave (“EPFML”) time. However, the EPSL and the EPFML benefits remain voluntary programs. A covered employer—if it so chooses—may continue the benefits for eligible employees until September 30, 2021, under the terms discussed below, or it can decide not to do so.
Paid Leave Benefits Under the Original FFCRA
As we previously reported, the FFCRA (H.R. 6201), which expired on December 31, 2020, but was extended by the Consolidated Appropriations Act of 2021 on a voluntary basis through March 31, 2021, generally required “covered employers” (i.e., private employers with fewer than 500 employees, and all public employers) to provide up to 80 hours of EPSL at (i) the employee’s regular rate of pay, up to a maximum of $511 per day and $5,110 in the aggregate, where the employee was unable to work because the employee had been quarantined (pursuant to a federal, state, or local government order or on the advice of a health care provider) and/or experienced COVID-19 symptoms and was seeking a medical diagnosis, or (ii) two-thirds the employee’s regular rate of pay, up to a maximum of $200 per day and $2,000 in the aggregate, where the employee was unable to work due to a bona fide need to care for an individual subject to quarantine (pursuant to a federal, state, or local government order or on the advice of a health care provider), or was caring for a child (under 18 years of age) whose school or care provider was closed or unavailable for reasons related to COVID-19, or the employee was experiencing any other “substantially similar condition” as specified by the Secretary of Health and Human Services in consultation with the Secretary of the Treasury and the Secretary of Labor. To be eligible for EPSL, the employee must have been unable to work onsite or remotely.
The now-expired FFCRA also provided up to two weeks of job-protected but unpaid EPFML followed by an additional 10 weeks of paid EPFML benefits at two-thirds the employee’s regular rate of pay, up to a maximum of $200 per day (or $10,000 in the aggregate), where the employee was employed by a covered employer for at least 30 days and was unable to work or telework because of a bona fide need to care for a child whose school or child care provider was closed or unavailable due to the COVID-19 pandemic.
The FFCRA also granted covered employers a tax credit equal to 100 percent of the amount paid to employees for EPSL and/or EPFML benefits. The tax credits were applied against the employer’s total portion of Social Security taxes for the period (along with certain health plan expenses), and were refundable to the extent the credits exceeded the total Social Security taxes (and allowable health plan costs) the employer owed. The Internal Revenue Service (“IRS”) permitted employers simply to retain the amount of the credit due them instead of paying the money into the IRS and waiting for a refund.
Extension of Tax Credits for Voluntary Paid Leave Benefits
Under the Act, employers that voluntarily choose to continue providing FFCRA leave benefits through September 30, 2021, are entitled to quarterly tax credits as described below, provided that the employer complies with each of the following new requirements:
Note: COBRA Subsidies
Among the many employment-related provisions of the Act is one that requires employers to provide, on a tax-free basis, a subsidy to involuntarily terminated employees and their qualified beneficiaries to pay 100 percent of the COBRA continuation premium for group health plan coverage. Please see our blog post for more information.
What Employers Should Do Now
 Leave for these reasons under the EPSL is paid at the employee’s regular rate of pay, up to a maximum of $511 per day.
 Federal workers must receive up to 15 weeks of EPSL and EPFML benefits.
 See section titled EPSL above.