On Thursday, March 11, 2021, President Biden signed a $1.9 trillion coronavirus relief plan, the American Rescue Plan Act of 2021 (“ARP”), in an effort to speed up the United States’ recovery from the economic and health effects of the COVID-19 pandemic and ongoing recession. Among other things, the ARP extends an additional period of tax credits to employers who voluntarily provide paid leave under the Families First Coronavirus Response Act (“FFCRA”), expands the reasons for FFCRA leave, increases unemployment benefits under the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), funds initiatives to combat COVID-19 related safety issues in the workplace and bolsters continuation coverage for separated employees under COBRA.
Families First Coronavirus Response Act Extension
The FFCRA created the Emergency Paid Sick Leave Act (“EPSLA”) and Emergency Family Medical Leave Expansion Act (“EFMLEA”) under which employers with fewer than 500 employees, and most public sector employers, had to provide paid sick leave to employees who needed leave for Coronavirus-related reasons. The FFCRA required covered employers to provide EPSLA and EFMLEA leave through December 31, 2020, but provided a tax credit related to the cost of leave to private employers. Private employers who continued to voluntarily provide that paid leave as of January 1, 2021 continued to be provided tax credits for such leave until March 31, 2021 through the Consolidated Appropriations Act, 2021. We previously wrote about the FFCRA here, here and here.
The ARP has now extended the period of tax credits for voluntary participation with FFCRA to September 30, 2021. Other important changes to FFCRA include:
- In addition to the original reasons for leave, FFCRA leave may now be taken when an employee is unable to work or telework for the following reasons:
- The employee is receiving the COVID-19 vaccine;
- The employee is recovering from injury, disability, illness or condition related to the vaccine after medical diagnosis; and
- The employee is seeking or awaiting results of a COVID-19 test or medical diagnosis and such employee has been exposed to COVID-19 or the employee’s employer has requested such test or diagnosis.
- The tax credit is not available to employers who discriminate in favor of highly compensated employees, full-time employees or employees on the basis of employment tenure.
- The maximum available pay under EFMLEA has increased from $10,000 to $12,000.
CARES Act Extension
The ARP extends federal unemployment benefits through September 6, 2021, providing a $300 weekly boost to unemployment compensation an individual may receive through the state. This federal unemployment benefit also continues to include individuals not otherwise eligible for assistance such as those who are self-employed, “gig” workers, freelancers, independent contractors and part-time workers.
The ARP also extends the duration for which an individual receiving Pandemic Unemployment Assistance (“PUA”) (for those not traditionally eligible for unemployment) or Pandemic Emergency Unemployment Compensation (“PEUC”) (for those who are traditionally eligible) benefits. PUA recipients may now receive up to 79 weeks of unemployment while PEUC recipients may receive up to 53 weeks. See our unemployment compensation article here.
Funding for DOL Worker Protection Activities
Health care employers will want to note that the ARP made $200,000,000 available to the Secretary of Labor for, among other things, the Wage and Hour Division and the Occupational Safety and Health Administration (“OSHA”), to carry out COVID-19 related worker protection activities. Specifically, not less than $100,000,000 was provided to OSHA, and of that, not less than $5,000,000 was designated for enforcement activities related to COVID-19 “at high-risk workplaces including health care…”
COBRA
The ARP appears to require that employers waive the charge for continuation coverage for COBRA-eligible employees during the coverage period beginning on the first day of the first month beginning after the ARP’s enactment (March 11, 2021), and ending on September 30, 2021, while providing tax credits associated with this expense. The requirement does not apply to individuals who voluntarily resign from employment. We are gathering additional information regarding the scope of this new requirement and its implications for various plans and procedures (including, as example only, notice requirements), which we will address in a future article soon.
Practical Takeaways
- If your organization elected to voluntarily comply with FFCRA following the December 31, 2020 expiration, evaluate the new obligations of ARP to ensure that continued participation is consistent with your organizational goals. To continue to claim tax credits, employers will have to comply with all of the new provisions (e.g., providing paid leave for vaccination).
- Should you continue to voluntarily participate, forms and/or policies may need to be revised to reflect the new provisions.
- Should you determine that continued participation is not consistent with your organizational goals, reasonable notice of discontinuation, return to traditional FMLA policies/procedures, etc., will be needed.
- Audit to ensure that your workplace is compliant with OSHA and CDC guidelines.
- Contact your COBRA administrator, or benefits attorney, regarding the COBRA benefit impact on your workplace.
For questions, please contact:
- Robin Sheridan at (414) 721-0469 or rsheridan@hallrender.com;
- Jake Kolisek at (317) 977-1428 or jkolisek@hallrender.com; or
- Your primary Hall Render contact.
Hall Render articles are intended for informational purposes only. For ethical reasons, Hall Render attorneys cannot—outside of an attorney-client relationship—answer specific questions that would be legal advice.
