by Marti Cardi, Esq. - Senior Compliance Consultant and Legal Counsel
March 12, 2021
OK, here’s fun stuff to talk about on a Friday. There’s no more football and I knew you would want this information to work with over the weekend, so…no need to thank me, I’m here to serve!
The federal COVID relief bill, the American Rescue Plan Act, passed Congress (narrowly) and was signed by President Biden on March 12. My gig is limited to addressing the provisions relating to paid leaves of absence.
Spoiler alert: there are NO paid leave requirements in the Rescue Plan.
Remember the Families First Coronavirus Response Act (FFCRA)? If not, you can take a refresher course here. But key things to remember are as follows:
- The leave of absence provisions only applied to private employers with fewer than 500 employees, and to public employers.
- It expired on December 31, 2020.
- It provided paid sick leave for up to 80 hours for COVID-related reasons, including quarantines, seeking a diagnosis, and school/day care closures.
- It provided expanded and paid FMLA coverage for up to 12 weeks for COVID-related school/day care closures.
- It included a tax credit for the paid leave provided by employers, up to certain limits.
In late 2020 Congress took the bold action of extending the tax credit for FFCRA paid leave voluntarily provided by an employer through March 31, 2021, but offered no other paid benefits. You can read about that here. Note that the credit through March 31 is only available for the total amount of FFCRA paid leave required by FFCRA in 2020 if an employee still has any unused 2020 entitlement.
Now another ground-breaking development! The American Rescue Plan Act has again extended the tax credit! Still no paid leave requirements, just a tax credit for employers who voluntarily provide FFCRA-like leave from April 1 through September 20, 2021. Details:
- The Rescue Plan resets the amount of paid sick leave the employer can offer and get the tax credits, to 10 days between April 1 and September 30.
- The tax credit is limited in amount to $511 per day for paid sick leave for the employee’s own leave (seeking diagnosis or in quarantine) and the 3 new reasons addressed below ($5,110 maximum); and to $200 per day for the other paid sick leave reasons.
- There is no new entitlement for expanded FMLA for school closures – the employee is still limited to a total of 12 weeks for both 2020 and 2021 combined.
- The tax credit for expanded FMLA for school closures paid by the employer between April 1 and September 30 is $200 per day, with a total maximum of $12,000.
- Three new reasons have been added for qualifying paid sick leave and paid FMLA– again, for voluntary benefits only, no requirement here.These new reasons are
- if the employee is seeking or awaiting the results of a test for or diagnosis of COVID-19 due to exposure or at the request of the employer;
- to allow an employee to obtain a COVID-19 vaccination; and
- for time lost if the employee is recovering from any “injury, disability, illness, or condition” related to the vaccination.
- A new nondiscrimination provision provides that the tax credit is not available if the employer discriminates in the availability of paid leave in favor of highly compensated employees, full-time employees, or long-tenured employees.
Well, that’s a wrap. On an historical note, the FFCRA became effective April 1, 2020. Remember how we all thought: We’ll definitely still be wearing masks and talking about this a year from now!
Nope, I don’t remember that either. Have a great weekend.