The American Rescue Plan Act and How It Impacts Employers | Enterprise Observer


Gail E. Farb, Labor and Employment Attorney, Williams Parker

Employment-related highlights of the recently enacted American Rescue Plan Act of 2021 (ARPA) include extended federal paid leave, COBRA premium subsidies, and expanded unemployment benefits.

Extended paid vacation

The ARPA is continuing to extend the paid vacation that was originally created by the Families First Coronavirus Response Act (FFCRA) on April 1, 2020. The FFCRA granted Extended Paid Family and Sick Leave (EFML) in addition to the Family and Medical Leave Act of 1993 and Emergency Paid Sick Leave (EPSL) for certain employees affected by COVID-19. The FFCRA’s mandatory vacation provisions expired on December 31, 2020, but these provisions have been extended to March 31, 2021 as voluntary options. The ARPA expands and extends the FFCRA’s paid vacation from April 1, 2021 to September 30, 2021 (extended period) follows:

Employers with fewer than 500 employees can choose to grant paid leave.

  • If employers choose to take paid leave under the ARPA during the extended period, they may be eligible for tax credits.
  • Employees receive a new authorization of up to 80 hours or 10 days of EPSL for use in the extended period.
  • Additional reasons for approval for EPSL are: (a) receiving COVID-19 vaccines; (b) recovery from an injury, disability, illness, or condition related to COVID-19 vaccination; and (c) seeking or waiting for the results of a COVID-19 test or diagnosis because either the employee has been exposed to COVID or the employer requested the test or diagnosis.
  • EFML tax credits have been increased.
  • Certain state, local and federal government (501 (c)) employers are eligible for tax credit.
  • Employers must not discriminate in favor of highly paid employees, full-time employees or employees based on their length of service.

COBRA Premium Subsidies

The ARPA subsidizes certain COBRA awards through tax credits. With COBRA, employees and their families who would otherwise lose their group insurance due to certain life events can continue with their group insurance, known as COBRA continuation insurance. The ARPA offers a 100% premium subsidy for persons whose working time reduction or involuntary termination of the employment relationship entitles them to a COBRA continuation insurance during the extended period. Employers’ plan administrators are required to provide timely notice to “eligible individuals,” including certain former employees who split up during the pandemic.

Unemployment benefit

The ARPA added $ 300 weekly allowances to the extended unemployment benefit through Labor Day (September 6, 2021). Gail E. Farb can be reached at [email protected].

Phone: 941-366-4800 Website:

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