The American Rescue Plan Act Renews and Expands Optional FFCRA Benefits

Employer’s mandatory obligation to provide emergency paid sick leave and family leave expired with the Families First Coronavirus Response Act (FFCRA) on December 31, 2020. Companies could still receive tax credits for voluntarily providing the same benefits to eligible employees until March 31, 2021.

The American Rescue Plan Act (ARPA) was signed into law on March 11, 2021. The ARPA did not make the FFCRA sick and family leave mandatory but did extend tax credits until September 30, 2021 for employers who voluntarily provided FFCRA benefits during that time.

For the most part, the original provisions of the FFCRA still apply for qualifying for the tax credits. For instance, an employee cannot be terminated for taking leave for COVID-19 related reasons. The tax credits are still only available to employers with fewer than 500 employees. To avoid impermissible discrimination, such leave should be provided to all employees, regardless of their positions in the company. Most New York employers are likely to choose to provide at least FFCRA paid sick leave as New York has its own required COVID paid sick leave (tiered based on number of employees) and vaccine leave (up to four hours) without tax credits.

There are some notable changes under ARPA to both sick and family leave, including additional hours and qualifying reasons that should be updated in notices to employees for employers who choose to provide FFCRA benefits. The maximum limit for paid sick leave will reset on March 31, 2021. This means that employees who have depleted the 80-hour limit before March 31, 2021 will be eligible for up to an additional 80 hours. Paid sick leave can also now be taken when seeking a COVID-19 diagnosis, waiting for a test result due to COVID-19 exposure, or if an employer requested the employee get a diagnosis or test. Both sick and family leave may also be used for COVID-19 vaccine appointments or complications related to the vaccine.

A big change to emergency family leave (EFMLA) is that employees no longer have to wait two weeks before they are eligible, and the tax credit is adjusted accordingly to provide for those two weeks. Employees can also use EFMLA for any reason that emergency paid sick leave is used, including for the new COVID-19 diagnostic and vaccines related reasons; however, because the employee's pay and tax credit are generally higher under emergency paid sick leave, many employers may choose to deplete the paid sick leave before turning to EFMLA. We anticipate that there will be further federal guidance released soon and will provide updates accordingly.

If you have any questions regarding the issues discussed above or if you have any other Labor & Employment Law concerns, please contact the Underberg & Kessler attorney who regularly handles your legal matters or Stephanie Hoffmann, the author of this piece, here or at (585) 258-2814.