Paid Leave Benefits and the American Rescue Plan Act: Extensions of EPSL and E-FMLA

Paid Leave Benefits and the American Rescue Plan Act Extensions of EPSL and E-FMLA

On March 11, President Biden signed the American Rescue Plan Act of 2021 (ARPA). The text of this bill fills over 240 pages, including an extension – and expansion – of paid leave tax credits first introduced almost one year ago as part of the Families First Coronavirus Response Act (FFCRA).

Tax Credits

While the requirement to provide these paid leave benefits – Emergency Paid Sick Leave (EPSL) and expanded FMLA leave (E-FMLA) – expired December 31, 2020, Congress extended the tax credits shortly before the end of the year. This allowed employers to claim credits through March 31, 2021. Under this year-end change, organizations could voluntarily decide to roll over these FFCRA paid leave benefits into 2021. The ARPA does something similar – tax credits are extended, so employers may voluntarily provide these paid leave benefits (and claim the associated tax credits) through September 30, 2021.

Reasons for Leave

Previously, EPSL could be used for six different reasons, and E-FMLA could be taken to care for a child whose school or day care had closed. Now, under the ARPA, both EPSL and E-FLMA can be taken for these reasons, as well as additional reasons including:

• Seeking or awaiting the results of a COVID-19 diagnostic test/medical diagnosis, including if this has been required by the employer
• Obtaining COVID-19-related immunization
• Recovering from injury, disability, illness, or condition related to a COVID-19-related immunization

Resetting the Clock

Another significant change is that the 10-day limit associated with EPSL now resets on April 1, 2021. As a result, employers can voluntarily provide employees with an additional 10 days of EPSL, including to those employees who exhausted this benefit before April 1, 2021.

While there’s no similar automatic “reset” for E-FMLA leave, employers should approach this like they approach traditional FMLA leaves, and evaluate how much leave an employee has available in the employer’s 12-month leave tracking period. (Even if an employee has exhausted the 12-week FMLA entitlement for these or other qualifying reasons, he/she may still take up to 10 days of EPSL for reasons listed in the ARPA.)

Increased E-FMLA Caps

The 10-week limit on E-FMLA was also increased to 12 weeks (and the $10,000 cap increased to $12,000), meaning that a full 12 weeks of paid time off is available to employees under the reasons outlined above.

The Option to Provide Paid Leave Benefits 

We understand that it may seem simpler to not offer EPSL and E-FMLA benefits. Some employers have concerns that employees will take advantage of the fresh availability of 80 hours of sick leave. However, with COVID vaccinations gaining momentum, you may find employees requesting time off to recuperate from side effects, particularly after the second dose. EPSL could be a way to provide reassurance that employees will not lose income as a result of receiving the vaccine.

As you are likely aware, Cal/OSHA passed an emergency temporary standard that requires employers to create COVID-19 Prevention Programs. Part of this regulation requires employers to provide “exclusion pay” – pay to employees who would otherwise be able to work were it not for their exclusion from work following a COVID-19-related exposure or positive test. While it’s valid to question whether Cal/OSHA has this kind of regulatory authority, providing EPSL benefits during the exclusion from work allows employers to claim tax credits for these payments.

EPSL and E-FMLA must be offered consistently, either to all employees or none. It may be reasonable that the rewards for keeping these benefits available outweigh the potential drawbacks.

We’re Here to Help!

We expect the Department of Labor to issue clarifying comments in the days and weeks ahead. Sierra HR Partners will keep you posted on developing information. Please contact us with any questions you have.