Legislative Update

On March 11, 2021, President Biden signed the American Rescue Plan Act (“ARPA”) as part of the federal government’s continued response to the social and economic crises created by the COVID-19 pandemic. In the ARPA are several provisions of note to employers, including expansion and (voluntary) continuance of the emergency paid sick leave and emergency FMLA leaves included in the prior administrations Families First Coronavirus Response Act (“FFCRA”).

The leave entitlements in the FFCRA sunset on December 31, 2020, however, the CARES Act extended the availability of tax credits for the FFCRA leaves until March 31, 2021 for employers that voluntarily chose to continue to offer the leave to their employees. ARPA goes even farther and extends the 100% tax credits through September 30, 2021 for employers who chose to extend the paid sick leave and emergency FMLA to their employees. The tax credits may be claimed on a quarterly basis against the employer’s share of the Medicare taxes owed by the employer or through a refund if the amount of the credit exceeds the employer Medicare taxes due in a calendar quarter.

In general, in order for an employer to claim the available tax credits, the employer is required to comply with all of the obligations that were previously set forth in the FFCRA regarding the payment of emergency paid sick leave and emergency paid family leave including job protection and restoration, and non-retaliation. However, the ARPA has modified those requirements by extending the leave entitlement to vaccine-related reasons if:

• The worker is getting a COVID-19 vaccine.
• The employee is recovering from complications due to receiving the vaccine.
• The worker is awaiting the results of a COVID-19 test or diagnosis for coronavirus.
   

ARPA also resets the 10-day leave bank for the tax credit for paid sick leave under FFCRA as of April 1. Any days an employee took before that date will not count toward the cap following that date.

This update is a summary of the updated provisions contained in the ARPA and should not be construed as legal advice. If you have questions regarding the ARPA provisions regarding paid sick leave or paid family leave, you should reach out to counsel.

Erin McCool is a Member Attorney at Ogden Murphy Wallace in Wenatchee and counsels public and private employers on Labor and Employment Law. Erin is the Legislative and Diversity Director for AVHRA. She may be reached at emccool@omwlaw.com.