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American Rescue Plan Act: Brief Overview of Extension of FFCRA Tax Credits and Other Employment Updates

By Katherine L. Wood, Esq.

Recently, the American Rescue Plan Act of 2021 (“Act”) was signed into law—the Act was highly anticipated by many, as it provides stimulus relief to many Americans.  However, in addition to the stimulus relief, the Act contains employment-related provisions of which employers should be aware.  This article serves to provide a brief overview of these employment-related provisions of the Act. 

Extension of Timeframe for FFCRA Payroll Tax Credits

The Act extends the availability of payroll tax credits to September 30, 2021 for employers who opt to provide Families First Coronavirus Response Act (“FFCRA”) leave to their employees.  FFCRA leave has two components—emergency paid sick leave and emergency paid medical leave. 

Making such leave available was mandated under the FFCRA only until December 31, 2020.  However, a previous law provided payroll tax credits to employers who voluntarily provided FFCRA leave to their employees through April 1, 2021.  The Act now extends the timeframe of availability of such payroll credits even further to September 30, 2021.

To be clear, this payroll tax credit program is not mandatory on any employer.  But employers with fewer than 500 employees can voluntarily offer paid sick or paid Family and Medical Act leave and obtain certain tax credits if they do so within the parameters of the FFCRA.

Expansion of Qualifying Reasons to take FFCRA Leave

If employers opt to provide FFCRA leave to their employees in order to take advantage of the payroll tax credit, the Act provides additional qualifying reasons for such leave. 

The newly added qualifying reasons for FFCRA leave are:

  • Seeking/awaiting results of a diagnostic test after a COVID-19 exposure or at the employer’s request;
  • Obtaining a COVID-19 vaccine; or
  • Recovering from any injury, disability, illness, or condition related to a COVID-19 vaccine.
     

Extension of Unemployment Insurance Benefits

The Act extends the Pandemic Unemployment Assistance Program (“PUA”) through September 6, 2021.  PUA provides unemployment benefits to those who are not eligible for unemployment benefits under state law. 

The Act also extends the Federal Pandemic Unemployment Compensation Program (“FPUC”) to September 6, 2021.  FPUC provides individuals who receive state unemployment benefits and those who qualify for PUA an extra $300 per week in unemployment benefits.


Hurwitz & Fine continues to monitor and analyze state and federal updates to employment laws.  Please contact any member of the firm’s Labor & Employment team for guidance on these evolving issues at 716-849-8900, by e-mail, or visiting our website at www.hurwitzfine.com.

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