On 11th March, 2021, the US President, Joe Biden has signed the American Rescue Plan Act[1] (ARPA), 2021. The ARPA Act is a comprehensive 1.9 trillion dollars relief plan that is intended to facilitate the recovery of the country from the impact of the COVID-19 pandemic.
The key employment-specific provisions are discussed below:
Voluntary Paid Leave Programs:
- Extension of limitation on excess business losses of non-corporate taxpayers.
- Until September 30, 2021, refundable tax credits may be received by employers who choose to voluntarily provide FFCRA paid sick or paid family leave.
- Three additional reasons added for paid leave by the employers: obtaining COVID-19 vaccination; recovering from an injury, disability, illness or condition related to the vaccination or seeking or awaiting the result of a COVID-19 test.
- A new anti-discrimination rule has been added that ensures the tax credit available only to those employers who provide leave to all employees without any discriminating against the categories of workers.
Unemployment Benefits
- The Act extends unemployment benefits by 300 dollars per week through 6th September, 2021 and also waives Federal income taxes for the first 10,200 dollars of unemployment benefits received in 2020 for households earning under 1,50,000 dollars.
- ARPA makes significant changes to each of the following unemployment insurance programs: Pandemic Emergency Unemployment Compensation; Pandemic Unemployment Assistance; Federal Pandemic Unemployment Compensation and Mixed Earner Unemployment Compensation.
Nutrition Assistance
There is an increase of 15% in the Supplemental Nutrition Assistance Program (“SNAP”) benefits, also known as food stamps or Electronic Benefit Transfer (“EBT”) benefits, through September 30, 2021.
Housing Aid
The Act extends 20 billion dollars to state and local governments to help low-income households with rent and utility bill assistance. In addition to this, 10 billion dollars is allocated to help people struggling to pay mortgages and property taxes.
COBRA Subsidies
Consolidated Omnibus Budget Reconciliation Act (COBRA) coverage allows employees to continue to remain covered under their employer’s health insurance for up to 18 months after coverage is lost because of a reduction in work hours or the employee’s involuntary termination of employment.
Small Business Relief
The Act has allocated 15 billion dollars for targeted Economic Injury Disaster Loan (“EIDL”) payments, which provides economic relief to small businesses that experienced loss of revenue due to the pandemic. The Act also extended an additional 7.25 billion dollars for the Paycheck Protection Program’s (“PPP”) forgivable loans. The Act also provides grants to small businesses in sectors hardest hit by the pandemic-related economic slowdown. This includes:
- The restaurants, bars and other eligible providers of food and drink have been allocated 28.6 billion dollars through the Restaurant Revitalization Fund.
- The airline industry has been allocated with 23 billion dollars.
- The shuttered venue operators, such as music venue operators, theatre producers, and other performing arts organizations have been extended 1.25 billion dollars.
*Tanvi Singh, Editorial Assistant has put this story together.
[1]https://www.congress.gov/bill/117th-congress/house-bill/1319/text#toc-H33775D8652B642E6A31E4BCAA5C575ED