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American Rescue Plan Extends Paid Sick and Family Leave Benefits

May 03, 2021

Attention employers, you will want to read up on recent changes made to paid sick and family leave benefits. We have the details here.

The recently passed American Rescue Plan extends paid sick and family leave benefits through September 30, 2021. Here’s what you need to know.

Recent changes to paid sick and family leave

Check out our blog, Employers, It’s Time to Revisit COVID-19 Related Paid Leave Requirements. Under the Families First Coronavirus Response Act (FFCRA), employers with fewer than 500 employees qualify for expanded family and medical leave for specified reasons related to COVID as well as expanded food assistance, unemployment benefits and more.

What is the American Rescue Plan?

Check out our blog, Biden Signs the American Rescue Plan: What's Inside? for a detailed look at the key provisions. Signed into law March 10, 2021, the ARPA of 2021 brings much needed financial aid to individuals, families and businesses, including changes to paid sick and family leave.

What did the American Rescue Plan change regarding paid leave?

  • Employer-provided paid sick leave (established under FFCRA) is extended to September 30, 2021
  • Expanded eligibility- The Plan adds three additional qualifying reasons for paid sick leave. Prior to this, employees could only use EFML if they needed time off to care for a child whose daycare or school was closed due to COVID. These additional qualifying reasons include:
    • Time off for obtaining a COVID-19 vaccine
    • Leave related to recovering from any illness or condition related to COVID-19.
    • Leave related to seeking or awaiting results of a COVID-19 test or diagnosis if either the employee has been exposed to COVID-19 or the employer requested the test or diagnosis.
  • Qualified family leave covered wages increased to $12,000 per employee (previously $10,000)
  • Number of days of paid leave allowed for self-employed individuals increases to 60 days (previously 50)
  • Reimbursement of pension plan and apprenticeship program contributions (made by employers under collective bargaining agreement) which are allocable to employee paid sick and family leave
  • Restrictions for employers on receiving credits for paid leave policies that favor highly compensated employees, tenured employees or full-time employees.

Is employer-provided paid sick leave required?

Paying employees is voluntary, however in order to take the credit on your taxes, you need to provide paid sick leave.

COBRA Continuation Coverage

Also important to note are the changes made to COBRA under the APRA. The Consolidated Omnibus Budget Reconciliation Act (COBRA) allows workers who lose their health benefits to continue group health benefits provided by their group health plan for limited periods of time (under circumstances such as voluntary or involuntary job loss). The American Rescue Plan subsidizes 100% of premiums for COBRA recipients for continuation coverage if they lose their jobs due to COVID. There is a refundable tax credit (available through September 30, 2021) which employers can claim against their Medicare payroll tax liability for the cost of the premiums. Once an individual becomes eligible for coverage under another group health plan or Medicare, the assistance is no longer available.

Questions? Contact us.

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