Last week President Biden signed the American Rescue Plan Act — an economic relief package total $1.9 trillion. While much of the focus has been on the $1,400 direct payments, the relief package also includes money for vaccine rollout, school reopening, small businesses, and more. This is the first major piece of legislation to come out of the Biden Administration, but is the latest relief package from the federal government addressing the economic struggles brought on by the COVID-19 pandemic.
Below are some of the provisions of interest to employers in the American Rescue Plan Act:
Extension of FFCRA Tax Credits
Employers who voluntarily provide FFCRA emergency paid sick leave or expanded family and medical leave to employees can continue to claim tax credits through September 30, 2021. The mandate to provide the leave expired on December 31, 2020; the tax credits for voluntarily providing that leave is the only thing that remains in 2021.
The American Rescue Plan also expanded the available leave reasons that emergency paid sick leave and expanded family and medical leave could be used for and subject to available tax credits, including leave for an employee who is (1) obtaining a COVID-19 immunization, (2) recovering from an injury, disability, illness or condition related to COVID-19 immunization, or (3) seeking or awaiting the results of a COVID-19 test or diagnosis because either the employee has been exposed to COVID or the employer requested the test or diagnosis.
Guidance from the IRS on the extension of the tax credits is anticipated soon.
Additional Money for the Paycheck Protection Program
The American Rescue Plan includes an additional $7.25 billion to the Paycheck Protection Program (PPP), which provides for forgivable loans for certain employers. It does not, however, extend the program beyond it’s current expiration date. Any business wanting to take advantage of these forgivable loans has until March 31, 2021.
Extension of Unemployment Insurance
Unemployment insurance programs providing for pandemic-related unemployment benefits, which were originally set to expire March 14, 2021 have been extended until September 6, 2021. This includes the Pandemic Unemployment Assistance (PUA) program, which is for workers who are not traditionally eligible for unemployment benefits (i.e. independent contractors), Pandemic Emergency Unemployment Compensation (PEUC), which provides additional weeks of unemployment to individuals who have exhausted state unemployment benefits, and the Federal Pandemic Unemployment Compensation (FPUC) program, which provides a supplement of $300 per week.
Worker Protection Funding
$200 million has been allocated for the U.S. Department of Labor’s Wage and Hour Division, Workers’ Compensation Programs, Office of the Solicitor, Mine Safety and Health Administration, and Occupational Safety and Health Administration for the purpose of carrying out COVID-19 related worker protection activities and oversight to prevent, prepare for, and respond to COVID-19. Of that, $100 million is specifically reserved for OSHA, with at least $5 million for enforcement activities related to COVID-19 at high risk workplaces.
COBRA Premium Subsidies
Beginning April 1, 2021 and continuing through September 30, 2021, subsidies to cover the costs of continuing health insurance under COBRA for eligible individuals who have been laid off, furloughed, or had their hours reduced are available. This means those eligible employees can choose to continue health benefits without having to pay COBRA premiums. Employers should work with their COBRA administrator to determine who needs to be notified about the premium subsidies.
We will continue to monitor the latest developments and will provide updates as more information and guidance becomes available. Employers with tax and/or financial questions regarding any of the provisions of the American Rescue Plan Act should contact their tax and/or financial advisors.
