Within the 1.9 Trillion dollar stimulus package is the American Rescue Plan Act of 2021 (ARPA). This Act serves to extend the tax credits available to eligible employers under the Families First Coronavirus Response Act (FFCRA) through September 30, 2021. Providing for benefits under the FFCRA is voluntary but if employers choose to provide the option they must comply with the modified provisions of the law.
At the end of 2020, Congress did not extend the mandatory requirements of the FFCRA but did extend the tax credit portion for employers through March 31, 2021. This allowed employers the opportunity to voluntarily provide FFCRA benefits to employees. Now, through ARPA, the tax credit has been extended from April 1, 2021 through September 30, 2021. Again, employers are not required but may voluntarily continue to provide the FFCRA benefits to employees. Under ARPA, however, those benefit provisions have been modified. Any employer that voluntarily pays the FFCRA paid leave benefits during this time frame will continue to receive dollar-for-dollar tax credits. Employers seeking to provide the benefit must familiarize themselves with the changes.
To begin, effective April 1, 2021, ARPA resets the calendar for calculation of leave and provides eligibility for 10 additional days of paid sick leave. Employers may recover the tax credit providing updated documentation for qualification and certification of leave.
Another notable change to the Act applies to vaccination. Effective April 1, 2021, leave is available to employees unable to work because they are obtaining a COVID-19 vaccine, or are recovering from any illness, injury or condition related to such vaccine.
ARPA now provides employees with up to 14 weeks of EFMLA. Specifically, The Act increased the number of weeks from ten (10) weeks to twelve (12) weeks. When combined with the initial two (2) weeks of Emergency Paid Sick Leave an employee may now be eligible for up to 14 weeks of leave. Similarly, the cap for paid leave has been advanced from an aggregate of $10,000 to $12,000.
Employees may seek Emergency Family Leave under the same criteria as Emergency Paid Sick Leave. Initially, EFMLA was restricted to leave for child care due to school or daycare closure. Now the expanded criteria previously applied to Emergency Paid Sick Leave may be considered for EFMLA.
Documentation remains critical. Employers must retain records and documentation to substantiate the claim for the credits. Specifically, employers should retain Forms 941, Employer’s Quarterly Federal Tax Return, and 7200, Advance of Employer Credits Due To COVID-19, and any other applicable forms, as appropriate to their request for tax credit.
As before, questions and corresponding guidance continue to evolve as to the application and implementation of these new provisions. We will provide timely and appropriate updates. If you have questions, please contact a member of our Employment Practices Group at 1-888-488-2638.