COVID-19 Relief Bill Changes to Employment Legislation
Wednesday, March 17, 2021
Posted by: Matthew Kennedy
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On March 11, 2021, President Biden signed the $1.9 trillion COVID-19 relief bill titled the American Rescue Plan Act (ARPA) into law. This comprehensive stimulus package has provisions that further revise the Families First Coronavirus Response Act (FFCRA), provide COBRA subsidies, extend unemployment benefits, and modify several other COVID-19 enacted employment provisions.
Below are the key provisions that are relevant to employers:
FFCRA
Under the ARPA, employers are still not required to offer Emergency Paid Sick Leave (EPSL) or Extended FMLA to their employees after December 31, 2020, but they can voluntarily offer both leave programs until September 30, 2021.
On April 1, 2021, if an employer decides to voluntarily allow its employees to take EPSL, and Extended FMLA, any employees who have previously exhausted their EPSL will be eligible for an additional 80 hours of EPSL and any employees who exhausted their Extended FMLA will be eligible for an additional 10 weeks of paid leave.
The ARPA also provides additional reasons for qualifying for FFCRA leave. Employees can take Emergency Paid Sick Leave for the following additional reasons:- Obtaining a COVID-19 vaccine,
- Recovering from any illness or condition related to the COVID-19 vaccine, or
- Seeking or awaiting the results of a COVID-19 diagnosis or test if either the employee has been exposed to COVID-19 or the employer requested the diagnosis or test.
For Extended FMLA, the daily cap on qualified wages remains the same at $200, but the total cap on tax credits employers can claim for an employee has been increased from $10,000 to $12,000. The caps on EPSL remain the same.
Payroll tax credits that reimburse employers who choose to offer EPSL or Extended FMLA to their employees have been extended through September 30, 2021. The tax credits cover the expanded reasons for taking EPSL and the additional 80 hours, 10 weeks, and $12,000 total cap increase mentioned above.
Oregon OFLA Leave
Oregon employers are still required under OFLA to provide up to 12 weeks of unpaid leave to eligible employees who need time off work to care for a child whose school or childcare provider has been closed in conjunction with a public health emergency, including COVID-19. BOLI made this a permanent rule change under the sick child leave provisions of OFLA with no end date.
COBRA Subsidies
The bill also includes subsidies for COBRA benefits. Employees who experience a loss of group health coverage due to reduced hours of employment or involuntary termination of employment are eligible for the subsidy. The subsidy covers 100% of an eligible individual’s COBRA premiums from April 1 through September 30, 2021. The subsidy is funded through refundable payroll tax credits. The subsidies are not available for employees who voluntarily terminate their employment or are eligible for another group health plan.
Plan administers need to notify eligible employees of the COBRA subsidy with sixty days of April 1, 2021. The Department of Labor will be issuing new model COBRA subsidy notices.
Extended Unemployment Benefits
The additional $300 weekly benefit under Federal pandemic related unemployment programs, set to expire on March 14, 2021, has been extended through September 6, 2021. ARPA also exempts the first $10,200 of unemployment benefits from federal income tax for each spouse in the household with less than $150,000 in adjusted gross income.
Expanded ACA Premiums
The bill increases the dollar amount of, and expands eligibility for, subsidies for health insurance coverage purchased through the Affordable Care Act (ACA) Exchanges. These and other ACA affordability changes made by the bill will expire after two years.
Dependent Care Assistance Program Contribution Limits
For calendar year 2021, the bill increases the annual contribution limit for a dependent care assistance program (DCAP) from $5,000 to $10,500. Employers with DCAPs can retroactively amend their plans to incorporate this increase, if the amendment is adopted by the last day of the plan year in which it is effective, and the plan operates consistently with the terms of the amendment until it is adopted.
Employee Retention Tax Credit
The Employee Retention Tax Credit that provides a refundable tax credit for up to 70% of qualified wages is extended from July 1, 2021 through December 31, 2021. Effective June 30, 2021, eligibility is expanded to cover small start-up businesses with gross receipts of up to $1 Million to claim a tax credit limited to $50,000 each quarter. Severely financially distressed employers can claim a larger tax credit and small employers may receive an advance of their tax credit.
Paycheck Protection Program
The ARPA has added an additional $7.25 billion for the Paycheck Protection Program, which provides for fully forgivable loans for certain employers who maintained payroll and headcount.
The bill also provides an additional $50 billion to small business, $28.6 billion of which is available for a new grant program that provides funds to bars, restaurants, and other businesses forced to close during the pandemic.
The full text of the bill can be found at the weblink below:
https://www.congress.gov/bill/117th-congress/house-bill/1319/text
UEA Attorneys are available to assist members with any questions they may have regarding the ARPA.
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