What Employers Need to Know: FFCRA Paid Leave under ARPA

In March 2020, the Families First Coronavirus Response Act (FFCRA) provided numerous paid leave opportunities for employers with under 500 employees. Employers were able to receive tax credit reimbursement for FFCRA payroll, but most of these credits expired within one year. Fast forward to 2021 and the passage of the American Rescue Plan Act of 2021 (ARPA). How did this new legislation impact FFCRA paid leave and employers? 

FFCRA paid leave extension

As COVID-19 vaccinations continue to roll out, U.S. employers are still needing to accommodate positive cases in the workplace and employees caring for sick family members. If an employer chooses to provide FFCRA paid leave (mandatory FFCRA paid leave ended on December 31, 2020), they may also receive tax credit reimbursements through September 30, 2021.

Also, starting April 1, 2021, employers may offer an additional 10-day FFCRA paid sick leave for an employee who already used one while claiming a tax credit for this leave. Paid family leave under the ARPA for up to 12 weeks may also be reimbursed as a tax credit to employers. 

FFCRA paid leave expansion

The ARPA also expanded qualifying reasons for paid sick leave and paid family leave. Previously, an employee could only qualify for FFCRA paid leave under six possible scenarios:

1. The employee is subject to a Federal, State, or local quarantine or isolation order related to COVID–19.
2. The employee has been advised by a health care provider to self-quarantine due to concerns related to COVID–19.
3. The employee is experiencing symptoms of COVID–19 and seeking a medical diagnosis.
4. The employee is caring for an individual subject to quarantine or isolation. 
5. The employee is caring for a son or daughter of such employee if the school or place of care of the son or daughter has been closed, or the child care provider of such son or daughter is unavailable, due to COVID–19 precautions.
6. The employee is experiencing any other substantially similar condition specified by the Secretary of Health and Human Services in consultation with the Secretary of the Treasury and the Secretary of Labor.

Under the ARPA and beginning April 1, 2021, employers may now expand FFCRA paid leave for the following three additional reasons:

1. The employee is waiting for diagnostic test results or medical diagnosis of COVID-19, whether after an exposure or at the employer’s request;
2. The employee is obtaining COVID-19 vaccination; or
3. The employee is recovering from COVID-19 vaccination-related injury, disability, illness, or condition.

Non-discrimination

As employers consider these nine qualifications for employees to receive paid sick leave or family leave, and as employers receive payroll tax credits as such, they must also abide by ARPA non-discrimination rules.

Employers will only receive FFCRA tax credits as long as they do not discriminate in favor of:

• highly compensated employees,
• full-time employees, or
• tenure with the company.

If your business would like to extend and expand FFCRA opportunities to employees and receive the tax credits associated with these leaves of absences, be sure to offer these options uniformly to all employees. 

Attorney Loren Speziale collaborates with business owners and human resource professionals, providing legal guidance and risk management assistance with regard to employment law issues.