As we wrote last week, Congress approved the $1.9 trillion
American Rescue Plan Act (ARPA, HR 1319), including $65.1 billion in direct flexible aid for cities. We also learned that President Biden signed the bill into law last Thursday. ARPA includes sick and family leave provisions similar to those in the package passed in December.
Within the package is a renewal of the payroll tax credits to incentivize private employers to voluntarily offer paid sick leave and paid family leave programs. Unfortunately, the tax credits are not available to public employers, including cities. Private
employers could use the credits to offset the costs of the private programs. The authorized uses of paid sick leave under the programs were expanded to include paid leave for receiving vaccination, recovering from vaccine side effects, or waiting
for diagnostic tests results. The family leave aggregate cap was also increased from $10,000 to $12,000. Those tax credits were originally set to expire March 31 and are now continued through September 30.
The ARPA did not renew the actual federal emergency paid sick and paid family leave programs that were included in the Families First Coronavirus Response Act in March 2020. Those programs expired on December 31, 2020 and were not renewed in the December
COVID relief package. Those programs included federally mandated paid sick leave and paid family leave programs that provided additional hours of paid sick leave and paid family leave based on the employee’s normal pay rate. A separate bill
(S.248, aka the FAMILY Act) has been introduced to create a permanent federal paid family and medical leave program. Similar bills have been unsuccessfully
proposed in the past but this version has gained a large number of co-sponsors (36 senators and 198 House members) which
may indicate a greater amount of support for the proposal in the current Congress.
The bill also includes authorization for paid leave programs for federal employees.
Some other employment and employee-related highlights of the American Rescue Plan include:
- Additional direct stimulus payments at $1,400 per person;
- $300 in supplemental unemployment benefits through September 6;
- An increase in the federal child tax credit to $3,000 per child ages 6-17 and $3,600 per child under age 6 and targets them to lower income families;
- Extension of the Pandemic Unemployment Assistance program and Pandemic Emergency Unemployment Compensation program; and
- Funding for several other programs, including rental assistance, small business aid and PPP loans, transportation supports, SNAP, and broadband expansion, among others.