To encourage employers to voluntarily offer paid coronavirus leave of the type previously mandated by the FFCRA, ARPA Congress has authorized federal tax credits to employers that provide such leave on a voluntary basis. Unlike the Families First Coronavirus Response Act (FFCRA) enacted a year ago, the recently enacted American Rescue Plan Act of 2021 (ARPA) does not require that employers provide any form of special paid COVID-19 related leave to employees. However, between April 1 and September 30, 2021 employers with fewer than 500 employees who provide employees with emergency paid sick leave (EPSL) and/or extended family and medical leave to employees affected by COVID-19 can still claim the same tax credits offered under the FFCRA.
ARPA re-sets as of April 1, 2021 the limit on the tax credit available for EPSL (80 hours in wages per full-time employee), and it increases the number of wages available for the tax credit for paid expanded FMLA from $10,000 to $12,000 per employee. ARPA also provides additional qualifying reasons for employees to take the paid leaves: (1) time off to get vaccinated; (2) recovery from a condition, illness, or disability related to the vaccination; and (3) the employee is seeking or awaiting the results of a COVID-19 test or diagnosis.
Employers should be mindful that the anti-retaliation provisions of the FFCRA are still applicable to past use of FFCRA benefits even if employers do not voluntarily extend benefits under ARPA. Employers are prohibited from discharging, disciplining, or in any way discriminating against employees who sought or obtained EPSL or extended FMLA leave. Retaliation also will disqualify employers from the extended tax credits, as will treating highly compensated employees, full-time employees, or employees with more tenure differently under such a voluntary paid sick leave plan.