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Summary of Answers at 8 on March 17th

This week Answers at 8 focused on reviewing some of the major employment and human resources information found in the American Rescue Plan, recently signed into law by President Biden.

Before summarizing that conversation (a discussion of which will likely continue into next week’s Answers at 8), we also wanted to bring members and non-members up to date on vaccination groups in NC:

  1. , people in Group 4 who have a medical condition that puts them at higher risk of serious illness and people who live in certain congregate settings will be eligible for vaccination, Governor Roy Cooper announced.

American Rescue Plan

The summary below focuses on key human resources and employment law components of the plan. There are many other business and individual grants, tax credits and other supports which are included in the law, so we encourage readers to familiarize themselves with the plan through other sources such as the Small Business Administration.

  • Optional increase in dependent care flexible spending account (“FSA”) limit from $5,000 to $10,500 for the 2021 tax year. Employers may adopt if they (1) make the change retroactive to the beginning of the plan year and (2) amend their plan by the last day of the 2021 plan year. Talk to Catapult’s FSA team, if you use their services, or to your own administrator.
  • Unemployment Program Extensions: The Pandemic Unemployment Assistance program and the Pandemic Emergency Unemployment Compensation of $300 per week are both extended through September 6th.
  • Unemployment Benefit Taxes Reduced for Individuals: The first $10,200 in unemployment received in 2020 will not be taxed for household incomes under $150,000.
  • Employers receiving an employee retention credit may continue under that program until December 31, 2021 and there are some additional businesses which can qualify that didn’t previously. This is a tax credit to encourage employers to keep employees on staff.
  • Briefly, the Butch Lewis Emergency Pension Relief Act of 2021 (relevant to those with multiemployer pension plans only) provides that those plans in a “critical and declining” status will have benefits paid by the U.S. Treasury through 2051. Retirees required to receive benefit cutbacks previously will be repaid and have benefits restored.
  • COBRA subsidy from April 1, 2021 until September 30th for employees who are terminated involuntarily or have hours reduced. There is also a special enrollment period for any such employee who either (1) did not elect COBRA but who otherwise would have been eligible for the subsidy or (2) elected COBRA but discontinued coverage before April 1st.  Coverage for these individuals will be retroactive to April 1st.

Employers must provide notice of this special enrollment period. (The program is an employer subsidy through which the company subsidizes the COBRA premiums for the employee. The employer will be able to claim the subsidy as a tax credit.) Details here.

  • Leave/FFCRA Expansion/Extension from April 1st to September 30th
  • Employers covered by the original law may voluntarily extend the FFCRA leave programs and continue to receive tax credits from April 1, 2021 to September 1st.
    • The law expanded the FFCRA’s EPSL (10 days) leave program tax credits to certain self-employed individuals.
    • The EFML will now cover 2/3 pay for full 12-week period, instead of the first two weeks being potentially unpaid as in the past, and the cumulative per-employee cap on EFML increases from $10,000 to $12,000. This means that there is the potential of 14 weeks of 2/3 pay or more between the EFML and the EPSL programs.
    • The law permits EFML use for any EPSL reason, at 2/3 pay for each reason, as with EFML’s original credit for childcare.
    • Both EFML and EPSL will qualify for tax credits for the following additional reasons (100% pay for EPSL and 2/3 for EFML):
  • COVID-19 vaccination or recovery from any illness, disability, condition or injury related to the vaccination.
  • Awaiting results of a diagnostic test or medical diagnosis for COVID-19. This includes employer requested tests due to exposure.
  • Most previous requirements remain, including no “double dipping” for forgiven PPP loans or other similar programs included in this or past bills.
  • There are also new non-discrimination rules, not allowing for tax credits when employers provide leave in a manner that discriminates in favor of highly compensated employees or full-time employees or discriminates against employees due to their tenure.

We are awaiting further guidance which has been requested from the DOL. We advise employers to use caution with “limiting” employees’ rights under these programs until we hear more, although most legal guidance indicates that unless we hear differently from the DOL, it is likely still fine to offer either or both EFML and EPSL to employees.

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