Paid COVID Leave Benefits for Employees: Act III
by Michelle Brenwald Klenda Austerman Employment Attorney

In 2020, the Families First Coronavirus Response Act (FFCRA) provided paid leave benefits to employees for various COVID related reasons. The FFCRA mandated employers with fewer than 500 employees (with limited exceptions) to provide the paid leave benefit through Dec. 31, 2020, in exchange for specific dollar-for-dollar payroll tax credits. Although the “mandate” that employers provide such benefits expired, employers could voluntarily provide the paid leave benefits through March 31, 2021, and still receive the same tax credits, as reported in the previous article on the Consolidated Appropriations Act, 2021.

In March 2021, as part of the federal government’s ongoing COVID-19 relief efforts, Congress passed, and President Biden signed into law, a landmark $1.9 trillion relief bill called the American Rescue Plan Act of 2021. The Rescue Plan again extends an employer’s ability to take advantage of the FFCRA’s tax credits through Sept. 30, 2021, for voluntarily providing paid COVID leave benefits. Employers should note, however, that the new legislation expands the qualifying reasons for FFCRA leave. The key changes are listed below.

For Emergency Paid Sick Leave (EPSL) benefits under the FFCRA, the Rescue Plan makes the following key changes:

  • Employees can receive paid leave benefits for taking time off to get a COVID-19 vaccine, as well as to recover from any injury, disability or illness related to a COVID-19 vaccine shot;
  • Employees can receive paid leave benefits for taking time off to seek, or while awaiting the results of, a COVID-19 diagnosis or test if either (1) the employee was exposed to COVID-19 or (2) the employer requested the test or diagnosis;
  • The allotment of up to 80 hours of paid time off is renewed effective April 1, 2021, through Sept. 30, 2021, even if employees previously exhausted their emergency paid sick leave entitlement; and
  • The employer tax credit is based on an employee’s regular rate of pay, up to $511 per day if the leave is needed for one of the new reasons related to immunization or testing, or because of the employee’s own symptoms, quarantine or isolation. If the paid sick leave is for any other reason, the amount of tax credit an employer can receive is limited to 2/3 the employee’s regular rate of pay and capped at $200 a day.

For Emergency Family and Medical Leave Expansion Act (EFMLA) benefits under the FFCRA, the Rescue Plan makes the following key changes:

  • The aggregate cap for tax credits is increased from $10,000 to $12,000 per employee;
  • An employee may now obtain paid leave under EFMLA benefits for the additional leave reasons set forth above (immunization, testing, etc.);
  • The requirement that the first 10 days of expanded family and medical leave is unpaid is eliminated; and
  • The available tax credit per employee is still limited to 2/3 the employee’s regular rate of pay, up to a maximum of $200 per day for all reasons for leave, including the new leave reasons related to immunization or testing, and reasons that qualify for a $511 per day cap when the wages are paid under the paid sick leave provisions.

Be cautioned that in the Rescue Plan, employers are disqualified from receiving FFCRA payroll tax credits if they fail to comply with the FFCRA, including its anti-retaliation provisions, or discriminate in favor of highly compensated employees, full-time employees, or employees on the basis of employment tenure with respect to leave.

If, as an employer, you opt to continue offering your employees paid COVID leave benefits, the paid time off request forms previously used will be out-of-date as of April 1, 2021 based on the new changes to the law. You can contact Klenda Austerman employment law attorney Michelle Brenwald at for assistance updating your forms.