The recently enacted American Rescue Plan Act (ARPA) includes several important provisions; for employers here are 3 key takeaways:
- Free incentives to provide virus-related paid time off to employees: ARPA extends employees’ access to paid leave under the Families First Coronavirus Response Act (FFCRA) until September 30, 2021 (but no longer mandates that employers provide such leave, rather it is voluntary for employers to do so). However, ARPA also provides tax incentives for employers to voluntarily provide paid time off to employees for virus-related activities. Additionally, the list of reasons workers can cite to qualify for FFCRA paid time off under ARPA is vastly expanded and includes paid time off to obtain the vaccine and to recover from any side effects of the vaccine, which were not previously available under the FFCRA. Practically speaking, under ARPA employers now have the ability to incentivize employees to get the vaccine with paid leave and get a tax credit for doing so – a win-win situation for all.
- Federal government subsidies of COBRA: ARPA sweetens the pot of extended COBRA coverage for employees by providing government-subsidized COBRA coverage to those who were laid off (i.e., did not voluntarily leave the company) November 2019 or later. What this means for employees is that ARPA allows them to stay on their employer’s health plans for free from April 1 to September 30, 2021. While the employer must front the initial COBRA premiums, the government makes the employer whole with a dollar-for-dollar tax credit. (Keep in mind, there are employer notice requirements, check with counsel as those must be sent to potential beneficiaries by May 30, 2021).
- Minimum Wage Hike ‘Crisis’ Averted (for now): Despite the much-hyped (and feared) $15 per hour minimum wage hike anticipated in ARPA, it has not (yet) come to pass. Employers can breathe a (short) sigh of relief because although not passed as part of ARPA, there was plenty of signaling from both sides of the aisle that plans for a minimum wage increase is on the horizon. But for now, no change on minimum wage or a new paid leave mandate.
As always, for more information, reach out to us! Every employer’s situation is unique, and we are happy to discuss impact and implementation plans with you.