Congress Passes and President Biden Signs American Rescue Plan Act Providing COVID-19 Stimulus and Extending Key Labor and Employment Benefits | Practical Law

Congress Passes and President Biden Signs American Rescue Plan Act Providing COVID-19 Stimulus and Extending Key Labor and Employment Benefits | Practical Law

President Biden has signed the American Rescue Plan Act of 2021 (ARPA-21), a $1.9 trillion relief package, passed through a budget reconciliation process. The ARPA-21 provides COVID-19 pandemic-related stimulus funds and contains several significant employment provisions, including extensions of unemployment and other benefits first provided under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) and extended by the Consolidated Appropriations Act, 2021 (CAA-21).

Congress Passes and President Biden Signs American Rescue Plan Act Providing COVID-19 Stimulus and Extending Key Labor and Employment Benefits

by Practical Law Labor & Employment
Published on 12 Mar 2021 • USA (National/Federal)
President Biden has signed the American Rescue Plan Act of 2021 (ARPA-21), a $1.9 trillion relief package, passed through a budget reconciliation process. The ARPA-21 provides COVID-19 pandemic-related stimulus funds and contains several significant employment provisions, including extensions of unemployment and other benefits first provided under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) and extended by the Consolidated Appropriations Act, 2021 (CAA-21).
On March 11, 2021, President Biden signed into law the American Rescue Plan Act of 2021 (ARPA-21), a third relief package responding to the health and economic harms caused by the COVID-19 pandemic. The $1.9 trillion package, passed through a federal budget reconciliation process on March 10, 2021, provides continued economic relief to individuals, businesses, and state, local, and tribal governments during the COVID-19 pandemic (Public Law No. 117-2; H.R. 1319).
The ARPA-21 extends (with some modification) many benefits provided under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) enacted in March 2020 and as amended by the Consolidated Appropriations Act, 2021 (CAA-21). For more on the CARES Act, see Practice Note, COVID-19: Unemployment Benefit Provisions of the CARES Act and FFCRA and Practice Note, Road Map to the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). For more information on the CAA-21, see Practice Note, Road Map to the Consolidated Appropriations Act, 2021 and Legal Update, Congress Passes and Trump Signs Year-End Appropriations and COVID Stimulus Bill with Key Employment Benefits. The ARPA-21 also allows employers to continue to take tax credits for qualifying paid sick and family leave under the Families First Coronavirus Response Act (FFCRA) through September 6, 2021. For more on the FFCRA, see Practice Note, COVID-19: Paid Sick and Family Leave Under the FFCRA.
This Legal Update highlights the key employment-related provisions in the ARPA-21 but is not intended as a detailed summary of the broad-reaching legislation. Practical Law will continue to supplement this Legal Update and related resources with further developments, including agency regulations and interpretive guidance if and when they become available.

Funding to Establish New Paid Emergency Leave for Federal Employees

The ARPA-21 provides funding to reimburse federal agencies for paid leave provided to employees because the employee:
  • Is subject to a federal, state, or local quarantine or isolation order related to COVID-19.
  • Has been advised by a health care provider to self-quarantine because of COVID-19-related concerns.
  • Is caring for an individual who is subject to quarantine, isolation, or self-quarantine order or has been advised to do so.
  • Is experiencing COVID-19 symptoms and seeking a medical diagnosis.
  • Is caring for their son or daughter if the child's school or place of care has been closed, if the school requires or makes optional a virtual learning instruction model or a hybrid of in-person and virtual learning instruction models, or the child care provider is unavailable because of COVID-19 precautions.
  • Is experiencing any other substantially similar condition.
  • Is caring for a family member with a mental or physical disability or who is 55 years of age or older and incapable of self-care, without regard to whether another individual other than the employee is available to care for such family member, if the place of care for such family member is closed or the direct care provider is unavailable due to COVID–19.
  • Is getting a COVID-19 vaccine or recovering from any related injury, disability, illness, or condition.
(ARPA-21 § 4001(a) and (b).)
The ARPA-21 specifies that paid emergency federal employee leave:
  • May be provided and used only until September 30, 2021.
  • Must not exceed 600 hours for each full-time federal employee, or a pro-rated equivalent for part-time federal employees, and may be provided only to the extent there are funds available to reimburse the federal agency providing the leave.
  • Must be paid at the same hourly rate as other leave payments and not be provided where it would result in aggregate payments to employees exceeding $2,800 biweekly for a fulltime employee or a prorated equivalent for part-time employees.
  • Is in addition to and may not be used concurrently with any other paid leave.
  • When taken, does not count as service time for retirement benefit calculations.
(ARPA-21 § 4001(c).)
The ARPA-21 also provides funding for paid emergency leave, subject to similar conditions and limitations, for employees of the Department of Veterans Affairs, Federal Aviation Administration, and Transportation Security Administration (ARPA-21 §§ 7103, 7104, and 8008).

Key Employment Law Provisions

The key employment-related provisions of the ARPA-21 address:
  • Pandemic Unemployment Assistance (PUA) benefits. The temporary federal PUA program enacted as part of the CARES Act, as amended by the CAA-21, provided covered individuals with up to 39 weeks of unemployment benefits, beginning on January 27, 2020 (15 U.S.C. § 9021(b)). ARPA-21 extends and modifies many of those provisions (see Practice Note, COVID-19: Unemployment Benefit Provisions of the CARES Act and FFCRA: Pandemic Unemployment Assistance (PUA) Program). Specifically, ARPA-21 amends the CARES Act to cover a 79-week period (rather than a 50-week period), extending benefits through September 6, 2021 (rather than March 14, 2021) (ARPA-21, § 9011, amending 15 U.S.C. § 9021(c)(1) and (2)).
  • Payments to nonprofits, states, and local government entities. The ARPA-21 allocates additional federal funds to reimburse nonprofits, state and local government entities, and federally-recognized Indian tribes for 75% (rather than 50%) of the costs they incur by paying unemployment benefits between December 31, 2020 (when CARES Act benefits originally expired) through September 6, 2021 (rather than through March 14, 2021) (ARPA-21, § 9012, amending 42 U.S.C. § 1103(i)(1)(B) and (i)(1)(D); see also Practice Note, COVID-19: Unemployment Benefit Provisions of the CARES Act and FFCRA: Reimbursement to Nonprofits, Government Agencies, and Indian Tribes).
  • Federal Pandemic Unemployment Compensation (FPUC). The ARPA-21 extends the FPUC program, which provides direct payments of $300 per week for weeks of unemployment beginning after December 26, 2020 through September 6, 2021 (rather than through March 14, 2021) (ARPA-21, § 9013, amending 15 U.S.C. § 9023(b), (e); see also Practice Note, COVID-19: Unemployment Benefit Provisions of the CARES Act and FFCRA: Federal Pandemic Unemployment Compensation (FPUC)).
  • Extending waiver of waiting requirements. The ARPA-21 reimburses a state's cost of waiving the one-week waiting requirement for unemployment insurance benefits for weeks of unemployment beginning after December 31, 2020 through September 6, 2021, (rather than through March 14, 2021) (ARPA-21, § 9014, amending 15 U.S.C. § 9024(c) and (e)(2); see Practice Note, COVID-19: Unemployment Benefit Provisions of the CARES Act and FFCRA: Funding to Pay One-Week Waiting Period).
  • State flexibility. The ARPA-21 extends the expiration date of states' flexibility to determine unemployment eligibility criteria under FFCRA's Emergency Unemployment Insurance Stabilization and Access Act of 2020 (EUISAA) from March 14, 2021 to September 6, 2021 (ARPA-21 § 9015; see Practice Note, COVID-19: Unemployment Benefit Provisions of the CARES Act and FFCRA: States Given Emergency Temporary Flexibility).
  • Pandemic Emergency Unemployment Compensation (PEUC). The ARPA-21 expands the total weeks' entitlement from 24 to 53 weeks and allows for phased out benefits through September 6, 2021 (rather than through April 5, 2021) for individuals who remain eligible for PEUC and have not otherwise exhausted their benefits entitlement (ARPA-21 § 9016, amending 15 U.S.C. § 9025(a), (b) and (g)).
  • Work-Share or Short-Term Compensation (STC) Programs. The ARPA-21 extends CARES Act funding to states that currently are with or without an STC program, as defined in Section 3306(v) of the Federal Unemployment Tax Act (FUTA) (26 U.S.C. § 3306(v)) from March 14, 2021 to September 6, 2021, and expands funding from 50% to 100% (ARPA-21 §§ 9017-9018, amending 15 U.S.C. §§ 9026(b)(2) and 9027(d); see also Practice Note, COVID-19: Unemployment Benefit Provisions of the CARES Act and FFCRA: Funding for Short-Time Compensation (STC) Programs).
  • FFCRA unemployment compensation funding. The ARPA-21 extends full federal funding of extended unemployment compensation under the FFCRA through September 6, 2021 (ARPA-21, §§ 9021-9022, amending 42 U.S.C. 1322(b)(10)(A) and FFCRA, § 4105).
  • Benefits for rail workers. The ARPA-21 continues unemployment and other assistance to rail workers including amending the Railroad Unemployment Insurance Act to:
    • provide enhanced unemployment insurance benefits;
    • extend the periods of eligibility for $600 weekly recovery benefits from March 14, 2021 to September 6, 2021 and the benefit period from 185 days to 330 days for employees with ten or more service years and from 120 to 265 days for employees with fewer service years; and
    • extend the waiver of the seven-day waiting period for benefits from March 14, 2021 to September 6, 2021.
    (ARPA-21 §§ 2901-2903, amending 45 U.S.C. §§ 352(a)(5)(A), (c)(2)(D), 15 U.S.C. § 9030(a).)
  • Benefits for restaurant employers. The ARPA-21 includes economic relief for covered restaurant employers through at least December 31, 2021. The funds are to help to revitalize the industry, and may be in the form of grants for specified expenses, including the costs of payroll and providing paid sick leave (ARPA-21 § 5003).
  • Benefits for sponsors of airports. The ARPA-21 includes funding to assist sponsors of covered airports to prepare and respond to COVID-19, in part by providing rent and minimum annual guarantees to airport concessions. Subject to limited exceptions, to receive funds, those airports must continue to employ through September 30, 2021, at least 90 percent of the number of individuals it employed (after making adjustments for retirements or voluntary employee separations) by the airport as of March 27, 2020. (ARPA-21 § 7102.)
  • Benefits for aviation manufacturing companies. The ARPA-21 provides funding to the Secretary of Transportation to setup a payroll support program for aviation manufacturing companies that are not benefiting or have not benefitted from a credit under section 2301 of the CARES Act (26 U.S.C. § 3111 note), financial assistance under section 4113 of the CARES Act (15 U.S.C. §9073), or financial assistance under the paycheck protection program established under section 7(a)(36) of the Small Business Act (15 U.S.C. § 636(a)(36)), as specified. Eligible aviation manufacturing employers may obtain up to six months of payroll support funding, provided they use the funds exclusively to:
    • continue paying employee wages, salaries, and benefits, to maintain the total compensation level for the eligible employees as of April 1, 2020 for the duration of the agreement; and
    • facilitate retaining, rehiring, or recalling employees, except that those funds may not be used as back pay for returning, rehired, or recalled employees.
    (ARPA-21 §§ 7201-7202.)
  • Benefits for air carriers and associated contractors. The ARPA-21 includes additional funding to extend the payroll support programs for air carriers and associated contractors previously created under the CAA-21, provided, among other things, these employers do not conduct involuntary furloughs until the later of September 30, 2021 or when the financial assistance is exhausted (ARPA-21 §§ 7301).
  • Veteran re-training assistance programs. The ARPA-21 includes funding for retraining programs and housing stipends to enable eligible veterans to obtain training or education necessary for high-demand occupations (ARPA-21 § 8006).
  • Presumption of eligibility for workers' compensation benefits for federal employees diagnosed with COVID-19. The ARPA-21 creates a presumption that federal employees' COVID-19 exposure arose out of employment and are entitled to workers' compensation, including disability compensation, medical services, and survivor benefits. The presumption does not apply to federal employees who are exclusively teleworking. (ARPA-21 § 4016.)

Extension and Expansion of FFRCA Paid Sick and Family Leave Tax Credits

The ARPA-21 extends the availability of the FFCRA payroll tax credits for certain wages paid by covered employers (private employers with fewer than 500 employees) for voluntarily-provided qualifying FFCRA leave through September 30, 2021 (ARPA-21, § 9641, adding 26 U.S.C. §§ 3131 to 3133). Like the CAA-21, the ARPA-21 does not require covered private employers to provide this leave.
The ARPA-21 extends these FFRCA tax credits to wages paid for leave from April 1 through September 30, 2021 (ARPA-21, § 9641, adding 26 U.S.C. §§ 3131(h) and 3132(h)). The ARPA-21 also:
  • Expands the COVID-19-related sick leave reasons (for purposes of qualifying for the tax credits) to also include leave for an employee who is:
    • seeking or awaiting the results of a diagnostic test for, or a medical diagnosis of, COVID-19 and after an exposure to COVID-19 or test or diagnosis at the employer's request;
    • obtaining immunization related to COVID-19; or
    • recovering from any injury, disability, illness, or condition related to a COVID-19 immunization.
    (ARPA-21, § 9641, adding 26 U.S.C. § 3131(c)(2)(A)(i).)
  • Creates a new annual allotment of up to 80 hours per employee of qualifying paid sick leave for 2021 (exclusive of the first quarter) (ARPA-21, § 9641, adding 26 U.S.C. § 3131(c)(2)(A)(ii)).
  • Increases the per employee aggregate tax credit cap for emergency family leave from $10,000 to $12,000.
  • Expands the qualifying family leave reasons to include the sick leave reasons (as expanded by the ARPA-21) and eliminates the requirement that the first 10 days of Emergency Family and Medical Leave Expansion Act (EFMLEA) leave is unpaid (ARPA-21, § 9641, adding 26 U.S.C. § 3132(c)(2)(A)).
  • Disqualifies employers from receiving a tax credit if they:
  • Continues the paid sick and family leave tax credits available to self-employed individuals beyond March 31, 2021 (ARPA-21, §§ 9642 and 9643).

Funding for DOL Activities

Worker Protection Enforcement Activities

The ARPA-21 provided an additional $200 million to the DOL that is to remain available through September 30, 2023 for:
  • The Wage and Hour Division, the Office of Workers' Compensation Programs, the Office of the Solicitor, the Mine Safety and Health Administration, and the Occupational Safety and Health Administration to carry out COVID–19 related worker protection activities.
  • The Office of Inspector General to engage in oversight of those activities.
Not less than $5 million of those funds are to be used for enforcement activities related to COVID–19 prevention and response activities at high risk workplaces, including:
  • Health care facilities.
  • Meat and poultry processing facilities.
  • Agricultural workplaces.
  • Correctional facilities.
(ARPA-21, § 2101.)

Fraud Prevention, Equitable Access, and Timely Worker Payments

ARPA-21 also provides the DOL funding for investigation and enforcement activities to prevent fraud and ensure equitable access to and timely payments of unemployment compensation to workers (ARPA-21, § 9032, amending Subtitle A of title II of division A of the CARES Act).

Employee Benefits and Executive Compensation Provisions

The ARPA-21 also includes provisions affecting among other things, employee benefits, retirement benefits and funds, executive compensation, and continuation of health plan coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA). For more information on the ARPA-21's employee benefits and executive compensation provisions, see Legal Update, $1.9 Trillion COVID-19 Stimulus Legislation Includes COBRA Premium Assistance, Retirement Plan Funding Relief, and an Expansion of Covered Employees Under Section 162(m).