On March 11, 2021, President Joe Biden signed into law the $1.9 trillion American Rescue Plan Act (ARPA), creating a third stimulus package since the COVID-19 pandemic started one year ago.
The ARPA focuses on several employment-related economic benefits such as paid sick leave, financial support for small businesses and enhanced unemployment benefits. Here’s the main ARPA points that employers should know.
Emergency Paid Sick Leave Updates
One of the first COVID-19-related federal bills passed last year, the Families First Coronavirus Response Act (FFCRA), created a new emergency paid sick leave (EPSL) and expanded the Family and Medical Leave Act (EFMLA). Together, these leave entitlements helped provide paid leave to workers for several COVID-19-related reasons, including to isolate and get tested as well as school and childcare closures, while employers benefitted from a tax credit for paying for the leave.
As previously reported, the mandate to provide FFCRA leave expired on December 31, 2020, but the second stimulus bill, the Heroes Act, allowed employers to continue voluntarily providing EPSL and EFMLA that employees didn’t use in 2020 and receive the tax benefit through March 31, 2021.
The ARPA goes a little further than the Heroes Act, but stopped short of reinstating the employer mandate. Some of the key changes taking effect on April 1, 2021, that ARPA made to the EPSL and EFMLA leaves include:
• Continuing to let employers voluntarily provide EPSL and EFMLA and extending their ability to claim tax credits through September 30, 2021, as long as they follow the rules.
• Allowing employers who provide EPSL to now offer it for employees taking time off to obtain a vaccine; recover from a vaccine-related injury, illness or other condition; seek a COVID-19 test or diagnosis due to an exposure; or at the employer’s discretion.
• Allowing employees to use EFMLA for any reason also covered by EPSL, including the newly added vaccine-related reasons.
• Giving employees who already used their EPSL allotment another 80 hours, as long as the employer voluntarily grants its use.
• Employers who choose to provide EPSL and EFMLA must do so for all classes of employees.
Employers should regularly monitor both the U.S. Department of Labor and Internal Revenue Service websites for updated guidance.
Unemployment Insurance
Passed last year, the first stimulus bill, the Coronavirus Aid, Relief, and Economic Security (CARES) Act, originally boosted state unemployment insurance systems multiple times through increased benefit amounts, duration of eligibility and expansion of eligibility to workers not normally eligible.
The Heroes Act and the ARPA continue to provide enhanced unemployment benefits, including an additional $300 per week in addition to state benefits and the ability to continue receiving unemployment benefits for 53 more weeks after the initial 24 weeks on unemployment ends.
Employers have little control over whether a current or former employee is eligible but should always respond to requests for information from state agencies such as California’s Employment Development Department (EDD).
The EDD now allows employers to register to receive claim notices electronically which helps employers promptly respond to claims. See employer online services at edd.ca.gov.
Small Business Financial Assistance
Last year, the CARES Act also created the Paycheck Protection Program (PPP), which allowed businesses to apply for forgivable loans to help keep employees on the payroll. The Heroes Act provided an opportunity for small, hard-hit businesses to receive a second loan.
The ARPA has expanded access to this program as well as several other financial assistance programs that the Small Business Administration (SBA) administers. Employers looking for further financial relief should review the programs available at the SBA website.
As both the federal and California governments eye a continued reopening of the economy, employers should continue to check CalChamber’s Coronavirus resources page at www.calchamber.com/coronavirus for updates.
