ARPA: FFCRA Extension

On March 11, 2021, an extension of the Families First Coronavirus Response Act (FFCRA) was passed as part of the American Rescue Plan Act of 2021. There are some important changes employers should be aware of, as this law has extended both Emergency Paid Sick Leave (EPSL) and Emergency FMLA (EFMLA) leave through September 30, 2021.

• It is important to note that while tax credits will continue to be available through September 30, 2021, extending EPSL and EFMLA is not required by federal law and is optional to employers.

• Any employer that opts to extend the FFCRA leave benefits is eligible to claim tax credits for any qualified wages that are paid April 1, 2021 through September 30, 2021.

• A non-discrimination provision was added to the Act. This provision does not allow employers to obtain a tax credit for quarters that are shown to have favored highly compensated employees, full-time employees, or employees based on tenure while granting EPSL or EFMLA leave benefits to employees.

• The EPSL bank will reset on April 1. The bank resets to 80 hours and can be used through September 30, 2021. Please note this is prorated for part-time employees.

• Any employer that opts to extend EFMLA leave must now pay out the first 10 days of leave as the waiting period has been removed. The cap on wages has increased from $10,000 to $12,000 aggregate. The law is not clear as to whether employees are entitled to a new bank of EFMLA, but we anticipate the IRS or DOL will soon provide guidance on this question.

• There were previously 6 qualifying reasons for an employee to take EPSL. The American Rescue Plan of 2021 includes 3 new additions, making a total of 9 qualifiers. This is identical to the qualifying list that may now be used to take EFMLA. Please see below for the new additions: 

  1. The employee is obtaining immunization related to COVID-19

  2. The employee is recovering from any injury, disability, illness, or condition related to such COVID-19 immunization

  3. The employee is seeking or awaiting the results of a diagnostic test or medical diagnosis for COVID-19 and the employee has been exposed to COVID-19 or their employer has requested such a test or diagnosis

Please reach out to your Client Experience Manager with any questions regarding this extension or any other part of the newly passed Act.