How American Rescue Plan Act affects employers

April 2021 employment law letter

Authors:

Whitney R. Brown, Lehr Middlebrooks Vreeland & Thompson, P.C.

President Joe Biden recently signed the American Rescue Plan Act of 2021 (ARPA). The measure was passed on party-line votes in the Senate (50-49) and the House, where only one Democrat crossed over to oppose it. The final bill differs from an earlier House-passed version. Some provisions were eliminated for procedural reasons while others were modified to secure the votes of more conservative Democrats in the Senate. Read on to learn how the law will affect employers.

Relevant details for employers

The ARPA extends a federal tax credit for employers that choose to continue providing leave (and receiving federal reimbursement) under the Families First Coronavirus Response Act (FFCRA) until September 30, 2021. As you may recall, employers covered by the initial FFCRA (those with fewer than 500 employees) were required to provide 80 hours of Emergency Paid Sick Leave (EPSL) and/or up to 12 weeks of Expanded Family and Medical Leave Act (EFMLA) leave.

In particular, the changes to the EFMLA’s terms just approved by Congress are significant, and we believe most employers will choose not to extend the leave. Here are two key changes that will be in effect between April 1 and September 30:

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