President Biden signed the American Rescue Plan Act (ARPA) on March 11, 2021. This massive piece of legislation provides $1.9 trillion in economic relief. This is a summary of key aspects that impact employers.

NOTE: This is a mere summary of a complex and new Federal law. Employers, please reach out for guidance on navigating ARPA decisions and obligations.

ARPA: Impact on Paid Leave

FFCRA. The Families First Coronavirus Response Act (FFCRA) provided paid leave provisions and paid family leave for certain COVID-19 related reasons through December 31, 2020, which was later extended on a voluntary basis until 3/31/2021. Read about the extension in this blog post.

For detailed information about the FFCRA, read our blog post here.

Deadline Extended. The American Rescue Plan extends the tax credit through September 30, 2021. That means, if an employer voluntarily extends the Emergency Paid Sick Leave (EPSL) or the Emergency Family and Medical Leave Expansion Act (EFMLEA), the employer will continue to be eligible for the payroll tax credit.

EPSL. Effective April 1st, employers may voluntarily provide up to an additional 80 hours of paid leave and be eligible for the tax credit. Expanded qualifying reasons for paid leave include: (1) to get a COVID-19 vaccination, (2) while recovering from an illness related to receiving the vaccine, and (3) seeking or waiting for test results or a medical diagnosis for COVID-19.

EFMLEA Changes. Last year, the first two weeks of EFMLEA was unpaid; it may now be paid at two-thirds the regular rate of pay. This is eligible for the tax credit and raises the maximum EFMLEA limit from $10,000 to $12,000 per employee. Another big change, employers may now offer EFMLEA for all FFCRA-qualifying reasons.

ARPA: COBRA Subsidy

Another pain point for workers laid off for COVID reasons was losing access to employer sponsored health insurance benefits. ARPA §9501 requires employers extend offers of COBRA coverage to certain employees and eligible beneficiaries, at no cost, from April 1, 2021 through September 30, 2021. Employers are eligible for tax credits to offset the cost of the free COBRA coverage.

The law also requires employers to extend offers of COBRA coverage to other individuals whose right to COBRA coverage previously ended. Employers be on notice: these changes under ARPA include new notice obligations. The Department of Labor is required to issue a model notice for employer use in advising qualified beneficiaries of their rights under ARPA. Plan administrators are required to give notices to eligible qualified beneficiaries by May 30, 2021. This is a complicated section and employers are advised to seek guidance.

ARPA: Unemployment Assistance

Rates of unemployment remain high across the nation. ARPA extends the existing $300 per week unemployment benefit through September 6th. 

On the Horizon in Minnesota

Just a FYI of the legislative actions that may impact employers, things we monitor so that you stay in the loop:

• Paid Break Time for Nursing. SF1180 would require paid break time for nursing and lactating employees. The bill passed the Senate Labor & Industry Committee and was referred to the Jobs & Economic Growth Committee.  
• Credit Information. HF108 was sent to the House floor after passing the Judiciary Committee. The bill would bar employers and prospective employers from using applicants’ or employees’ credit information as a condition of employment. 
• Paid Leave: HF1200 passed two House committees and was sent to the Workforce & Business Development Committee. The bill would provide employees with partial wage replacement for family or medical leave. 
• Sick & Safe Time: Employees who work at least 80 hours per year for a Minnesota employer would earn sick and safe time under HF7, which passed the House State Government Finance Committee and was referred to Ways and Means Committee. 

Is your Employee Handbook updated and in compliance with new Minnesota law? Read about the changes here.