Paid Leave & the American Rescue Plan (ARP)

As states make COVID-19 vaccines widely available to all demographics, the challenge employers have faced of employees missing time continues to grow. In addition to COVID-19 illness and safety concerns, many employees have missed work due to negative reactions to vaccines.
The passage of the American Rescue Plan (ARP) in March of 2021 addressed some of these issues for employers. While it does not mandate the leave as the previous Families First Coronavirus Response Act (FFCRA) had, it makes it easier for employers to claim credits who wish to offer these leaves to employees through September 30, 2021.

Here’s what you need to know:

• The ARP has now broadened the previous EPSL leave terms of the FFCRA to include time for obtaining a COVID-19 vaccination, time for recovering from side effects or illness due to obtaining a COVID-19 vaccination, and waiting for the results of a COVID-19 test having been exposed or at the request of the employer to obtain the test. This credit is 100%, up to $511/day.

• While the first two weeks of FMLA were unpaid, under ARP, all 12 weeks can now be paid. The reasons for taking the leave have also been expanded beyond caring for a child whose school has closed and can be any of the reasons above per the sick leave. The total cap for EFML has been increased from $10,000 to $12,000.

• Employers will need to remain consistent in providing leave to all employees due to non-discrimination language found in ARP. Failure to do so can result in a loss of tax credits.

• Proper payroll coding of the hours for leave and/or illness related to the above will be key in obtaining the refunds available to companies via payroll. The EPSL will yield a higher credit for employers. These credits can be claimed by filing Form 7200 “Advance Payments of Employer Credits due to COVID-19.”