Newly signed American Rescue Plan offers important changes to FFCRA paid leave

On March 11, President Joe Biden signed into law the $1.9 trillion stimulus package called the American Rescue Plan Act (ARPA). While the final version of the bill didn’t include a much-debated increase in the federal minimum wage, it did contain several key provisions directly affecting employers that continue to provide paid leave voluntarily under the Families First Coronavirus Response Act (FFCRA).

Payroll tax credits extended to September 30

As you will recall, the FFCRA’s mandatory requirement to provide emergency paid sick leave (EPSL) or Expanded Family and Medical Leave Act (EFMLA) leave expired on December 31, 2020. In return for providing the leave, employers were eligible for payroll tax credits to offset the cost.

In late December 2020, as part of an initial $900 billion stimulus bill, Congress voted to extend the tax credits until March 31, 2021, for employers that continued to offer the paid leave voluntarily. While the ARPA doesn’t reinstate the employer mandate to provide the EPSL or the EFMLA leave for qualifying events, it does further extend the tax credits to employers through September 30, 2021.

Expanded eligibility for paid leave

The ARPA expands the types of leave available under the FFCRA. Leave can now be taken when an employee is: