American Relief Plan (ARPA) - Update to the Family First Corona Virus Relief Act (FFCRA)
March 31, 2021
American Relief Plan (ARPA) - Update to the Family First Corona Virus Relief Act (FFCRA)

On March 11, 2021, President Biden’s administration enacted the NEW American Rescue Plan (ARPA). The plan included changes to the FFCRA to include emergency paid sick leave and paid family leave. ARPA also extended tax credits businesses could receive, through September 30, 2021, if those businesses decided to continue to offer the FFCRA leave on a voluntary basis (after the December 31, 2020 sunset date).  ARPA also made changes to the tax credit eligibility for both types of FFCRA leave: (80 hours of Paid Sick Leave, and 10 Weeks of Enhanced Paid Family Leave).


Voluntary Emergency Paid Sick Leave

With regard to the 80 hours of paid sick leave employees previously were eligible for under the FFCRA, that leave now resets starting April 1, 2021 even if an employee previously used the 80 hours in 2020. The time allowed for full-time employees remains at 80 hours and the tax credits are still available to employers. For part-time employees, the amount of the new leave is the average time worked over two weeks. COVID-19 testing and vaccinations are also Included in the ARPA eligibility.


Voluntary Paid Family Leave

The NEW American Relief Plan (ARPA) expands the FFCRA family leave tax credit to allow it to apply to:


  • Family leave taken for FFCRA emergency paid sick leave reasons.
  • Family leave taken for reasons related to COVID-19 testing and vaccination.


ARPA also increases the wages related to family leave eligible for the tax credit to $12,000 (up from $10,000) per employee, and it eliminates the requirement that the first two weeks of family leave be unpaid.


NOTE: For leave to be eligible for the employer tax credits under ARPA, employers are required to comply with the Emergency Paid Sick Leave and Expanded Family Leave requirements of the FFCRA, as if they continued to apply, and as they have been amended by the ARPA.


Emergency Paid Sick Leave

Additional Reasons for Leave

Under the NEW ARPA, employer can claim tax credits for paid sick leave if employees use it for any of the reasons previously stated as eligible under the FFCRA as well as the following additional reasons:


  • If an employee is unable to work or work remotely while they seek or are await the results of a test/diagnosis of/for COVID-19, or if an employee has been exposed to COVID-19, or an employer has requested a test/diagnosis.
  • If an employee is unable to work or work remotely while they are obtaining the COVID-19 immunization.
  • If an employee is unable to work or work remotely while they recover from any injury, disability, illness, or condition related to the COVID-19 immunization.


Paid Family Leave

Additional Reasons for Leave

The NEW ARPA allows employers to use the family leave tax credit for leave taken for the same three new COVID-19 testing/immunization scenarios listed above.


ARPA also allows employers to take the family leave tax credit for leave that would have satisfied the FFCRA paid sick leave requirements. This includes childcare purposes, but it also involves leave taken for:


  • Employees unable to work or work remotely because they are subject to a federal, state, or local quarantine or isolation order related to COVID-19.
  • Employees unable to work or work remotely because they have been advised by a health-care provider to self-quarantine due to concerns related to COVID-19.
  • Employees unable to work or work remotely because they are experiencing symptoms of COVID-19 and seeking a medical diagnosis.
  • Employees unable to work or work remotely because they are caring for someone that is subject to a federal, state, or local quarantine or isolation order related to COVID-19 or who has been advised by a health care provider to self-quarantine due to concerns related to COVID-19.


A big change ARPA made pertains to the family leave credit. It can now fund paid sick leave for up to 12 weeks, instead of the two weeks permitted previously.


Previously, if an employee utilized the expanded family leave, the first two weeks were not paid, but the remaining 10 weeks were. ARPA allows the tax credit on the full 12 weeks, up to a cap of $12,000 (formerly $10,000) per employee.


As with all programs, employers may not discriminate when offering this benefit to their employees. This includes discrimination in favor of highly compensated employees, full-time employees, or on the basis of employment tenure. If an employer is charged with this and found guilty, it will render the leave ineligible for the tax credit for the calendar quarter in which the discrimination occurred.


Similar to the FFCRA at the end of December 2020, the NEW ARPA is a voluntary program for employers, BUT, by offering this to eligible employees, the employees receive a benefit AND the employer is reimbursed through tax credits, so in essence, it is a win-win for employers to continue the practice.


If you have any questions, please reach out to SimcoHR and they will be happy to assist.

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