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On March 10, 2021, Congress passed the American Rescue Plan Act of 2021 (“Rescue Plan”), a $ 1.9 trillion COVID-19 relief package that will help individuals, businesses, and state and local governments during the COVID period. Program is intended to offer further economic relief. 19 pandemic. President Biden is expected to sign the law. The following is a summary of the key employment provisions in the rescue plan:
FFCRA tax credit extension
The rescue plan extends the tax credit provisions of the Coronavirus Response Act (“FFCRA”) of the Families First Act to September 30, 2021. However, like since January 2021, insured employers (with fewer than 500 employees) are not required to provide FFCRA vacation to employees Rather, employers can choose to give employees FFCRA leave and receive tax credits to offset certain costs associated with providing the leave.
The bailout plan also includes certain changes to the FFCRA, all of which will come into effect on April 1, 2021:
- Covered reasons for sick leave: In addition to the six reasons for vacation set out in the FFCRA, employers receive tax credits for granting vacation leave to employees who: (i) receive vaccination related to COVID-19 or are recovering from injury, disability, disease, or condition related with such immunization; or (ii) seek or await the results of a diagnostic test or medical diagnosis of COVID-19 if that employee has been exposed to COVID-19 or the employer has requested such test or diagnosis.
- Reset the paid patient watch: In relation to workers who previously took 10 days of paid sick leave under the FFCRA, the rescue plan allows an employer to give those workers an additional 10 days of leave.
- Family Vacation and Medical Vacation Tax Credit extension: Previously, employer tax credits to cover the cost of providing FMLA emergency leave were only available if the employee was unable (or teleworking) to care for their child whose school or care facility was closed or unavailable as a result was the public health emergency. Employers can now claim FMLA Emergency Leave tax credits for any of the reasons set out in the FFCRA (including the two extended reasons described above). The rescue plan also removes the two-week wait for FMLA emergency leave and increases the cap on FMLA emergency leave from $ 10,000 to $ 12,000.
- Non-discrimination rules: The bailout plan includes new non-discrimination rules for employers who choose to voluntarily grant FFCRA leave and receive tax credits. In particular, the bailout plan prohibits the tax credit for any employer who discriminates in relation to vacation: (1) in favor of high-paid workers (as that term is defined in Section 414 (q) of the Internal Revenue Code); (2) in favor of full-time employees; or (3) based on length of service.
The law instructs the Department of Labor to issue regulations or other guidance on these changes. We will provide updates as additional information becomes available.
The rescue plan also expands the unemployment benefits available under the Coronavirus Aid, Assistance and Economic Security Act of March 2020 (the “CARES Act”) and the Consolidated Funds Act of December 2020, both of which were made after Dec. March should expire. 2021.
Unemployment benefit under the CARES and Consolidated Appropriations Act
As a reminder, through the CARES Act and the Consolidated Funds Act, Congress expanded existing unemployment insurance benefits and created new UI benefits, including through the following three programs: (1) Federal Pandemic Unemployment Compensation (“FPUC”) ; (2) Pandemic Unemployment Compensation (“PEUC”); and (3) Pandemic Unemployment Assistance (“PUA”). In accordance with the December 2020 amendments to the CARES Act of the Consolidated Appropriations Act:
- FPUC Provided an additional weekly benefit of $ 300 for each week of unemployment between December 26, 2020 and March 14, 2021.
- PEUC Up to 24 weeks additional entitlement to unemployment benefits, which is available until March 14, 2021 for people who have exhausted unemployment benefits otherwise available under state law.
- PUA Extension of unemployment benefit to certain employees who traditionally have no entitlement to unemployment benefit under state law, e.g. B. Self-employed, independent contractors and workers with limited work experience. These services were available until March 14, 2021. According to the law on consolidated funds, the duration of PUA benefits for eligible employees has been extended to a total of up to 50 weeks.
The CARES Act and Consolidated Appropriations Act also provided incentives for states to waive waiting times for benefits and encouraged the use of government short-term compensation programs (“STC”). For more information on these programs, see our previous posts here and here.
American Rescue Plan unemployment benefits
The recently approved rescue plan extends each of the three programs outlined above until Labor Day (September 6, 2021) and makes the following changes to the programs:
- FPUC: The rescue plan provides an additional weekly benefit of $ 300 per week for each week of unemployment between March 14, 2021 and September 6, 2021. This is the same amount of additional benefit previously made available under the Consolidated Appropriations Act.
- PEUC: The rescue plan extends the PEUC by providing eligible persons who have exhausted unemployment benefits available under state law with up to 53 weeks of additional unemployment benefits. Before the CARES Act, many states limited the duration of regular unemployment benefits to 26 weeks. The CARES Act provided for an additional 13 weeks of PEUC benefits and the Consolidated Funds Act provided for up to 24 weeks of additional PEUC benefits. With the latest bailout renewal, eligible recipients of UI benefits in many states can now receive benefits for up to 79 weeks.
- PUA: The rescue plan provides eligible persons with up to 79 weeks of PUA benefits, an extension of the 50 weeks benefits that were previously granted under the Consolidated Appropriations Act (benefits under the CARES Act) (the duration of benefits was 39 weeks).
Although unemployment benefits are taxable, the bailout plan waives federal taxes on the first $ 10,200 of unemployment benefits a person raised in 2020. In particular, however, this tax suspension only applies to taxpayers whose gross adjusted income in 2020 was less than $ 150,000.
The rescue plan also extends other provisions of the CARES Act through September 6, 2021, including incentives for states to forego waiting times and encourage the use of STC programs. The rescue plan also creates a greater incentive for states to forego waiting periods for unemployment benefits than the Consolidated Funds Act, as benefits paid during a waived waiting period are now 100% federally funded, as opposed to the 50% paid in the Consolidated funds are provided for act.
The federal government may issue updated guidelines to address the implementation of these unemployment rules in the light of this new legislation. Employers should monitor government websites for applicable unemployment programs and current guidelines. We will continue to monitor this development and inform our readers about new guidelines in this area.
Problems with employee benefits
For more information on pension reform and the COBRA aspects of the rescue plan, please visit our blog on Employee Benefits and Executive Compensation.
Congress Adopts American Bailout Plan: What Employers Need To Know
Originally published by Proskauer, March 2021
The content of this article is intended to provide general guidance on the subject. A professional should be obtained about your particular circumstances.
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