American Rescue Plan Act of 2021

The American Rescue Plan Act of 2021 has been signed by President Biden. The Rescue Plan provides a variety of funding and relief, including support for small businesses, such as modifications to the Paycheck Protection Program, grants for restaurants, and aid for shuttered live entertainment venues (Title V). It extends many of the unemployment programs set forth in the CARES Act and the December 2020 Consolidated Appropriations Act, establishes a subsidy for employees’ COBRA premiums, and extends the employee retention tax credit (Title IX).

Thankfully, the Rescue Plan does not require more paid leave under the Families First Coronavirus Response Act (FFCRA) – the March 2020 law that mandated expanded FMLA and emergency paid sick leave for COVID-19 related reasons. The FFCRA leave requirement ended on December 31, 2020 and has not been extended by Congress.

The Rescue Plan does extend tax credits for employers that choose to continue to provide paid leave to their employees under the FFCRA through September 30, 2021. (These tax credits were initially extended through March 31, 2021 as part of the Consolidated Appropriations Act.) The Rescue Plan changes the tax credit in several ways, including: 

• providing additional leave reasons which will qualify for a tax credit such that an employer can take a tax credit for an employee’s use of paid leave (1) to obtain the COVID-19 vaccine or recover from any injury, disability, illness or conditions related to such immunization and (2) to seek or await the results of a diagnostic test for, or a medical diagnosis of, COVID–19 if they have been exposed to COVID–19 or the employer has requested such test or diagnosis;
• allowing an employer to give employees (who have used their emergency paid sick leave allotment) a new 10-day allotment of emergency paid sick leave; 
• prohibiting a tax credit if an employer discriminates with respect to leave in favor of highly compensated employees, full-time employees, or on the basis of employment tenure. 

While employers will want to review the American Rescue Plan Act carefully, the bottom line when it comes to paid leave has not changed – employers are no longer required to provide paid leave for COVID-19 related reasons under the FFCRA, but if they choose to do so, they remain eligible for tax credits through September 30. Of course, a Nevada employer may still be subject to state laws that require paid leave for COVID-19 related reasons.

If you have questions about the American Rescue Plan Act or COVID-19 related leave, please contact a KZA attorney. 

KZA Employer Report articles are for general information only; they are not intended and should not be construed to be legal advice. Reading or replying to such articles does not establish an attorney-client relationship. In addition, because the subject matters and applicable laws discussed in Employer Report articles are often in a state of change and not always applicable to every type of business entity or organization, readers should consult with counsel before making decisions based on the same.