On March 11, 2021, the American Rescue Plan Act of 2021 (the "Rescue Plan") was passed and signed into law. Employers should be aware of the key employment provisions of the Rescue Plan in managing their workforce and in evaluating and implementing their COVID-19 workplace policies and procedures.
Extending and Expanding the Payroll Tax Credits for Leaves Voluntarily Provided Under the Family First Coronavirus Response Act ("FFCRA")
The FFCRA required public employers and private employers with fewer than 500 employees (with limited exceptions) to provide paid leave for qualifying reasons related to COVID-19. The FFCRA's sunset date was December 31, 2020, at which time the mandate to provide leave expired. Covered private employers who provided FFCRA leave were able to claim a tax credit for the payments made during the leave, subject to per diem and total caps.
On December 27, 2020, the Consolidated Appropriation Act, 2021 ("CAA") was signed into law. The CAA did not extend the FFCRA's mandate to provide leave, but did extend the availability of the payroll tax credits through March 31, 2021, for employers who voluntarily provided leave to employees whose leave entitlements had not been exhausted by the FFCRA's sunset date of December 31, 2020.
The Rescue Plan extends the availability of the payroll tax credits again from April 1, 2021, to September 30, 2021. Unlike the CAA, it also expands the tax credits.
Under the Rescue Plan, employers are disqualified from receiving FFCRA payroll tax credits if they:
Extending Unemployment Insurance Benefits
The Rescue Plan also extends unemployment assistance to individuals who become unemployed or are unable to work due to COVID-19, including: