The American Rescue Plan – What Employers Need to Know

On March 10, 2021, Congress passed the American Rescue Plan Act of 2021 (“Rescue Plan”) and President Biden signed it into law the following day.  The Rescue Plan includes several provisions that directly impact the workplace.  These provisions are summarized below:

  • Extends the Families First Act Coronavirus Response Act’s (“FFCRA”) optional COVID-19 paid leave benefits through 9/30/2021.  Covered employers (less than 500 employees) may, but are not required, to offer these benefits.  Those that do are entitled to a tax credit to offset the cost of providing this paid leave  
  • Expands FFCRA benefits in the following ways, effective 4/1/2021:
    • Provides emergency paid sick leave (“EPSL”) for the following additional qualifying reasons: (i) obtaining a COVID-19 immunization or recovering from a medical condition related to such an immunization; and (ii) seeking or awaiting the results of a diagnostic test for, or a medical diagnosis of, COVID-19 when an employee has been exposed to COIVID-19 or the employer has requested such test or diagnosis
    • Provides an additional 10 days of EPSL
    • Expands the reasons for qualifying for paid emergency FMLA leave (“EFML”) to include any of the reasons that would qualify for EPSL (including the 2 new EPSL reasons set forth above). Before this expansion, EFML was only available if the employee was unable to work (or telework) to care for a child whose school or place of care was closed or unavailable due to the public health emergency
    • Removes the 2-week waiting period to qualify for EFML
    • Raises the aggregate cap on EFML from $10,000 to $12,000
  • Requires employers that voluntarily provide these benefits to do so in a uniform manner without discriminating against certain categories of workers
  • Extends the unemployment benefits under the CARES and Consolidated Appropriations Acts through 9/6/2021, with additional tax benefits for some individuals
  • Provides a 100% COBRA premium subsidy effective April 1-Sept. 2021 for employees involuntarily terminated who want to remain on their employer’s health insurance     

We will provide further updates after the Department of Labor issues guidance to address the implementation of these provisions.  If your organization operates outside of AZ, you should check state law to determine if there are additional state or local laws that mandate paid leave or other benefits related to the pandemic.