COVID Relief Package: What Employers Need to Know
Author: David B. Weisenfeld, XpertHR Legal Editor
March 10, 2021
Congress has signed the much-discussed $1.9 trillion COVID-19 relief bill today and sent it to the White House. President Biden will sign the measure this week, exactly one year after much of the nation shut down in response to the coronavirus pandemic. The sweeping new law, known as the American Rescue Plan Act, includes many employment-related provisions.
The relief package will extend certain unemployment benefits enacted through prior pandemic-relief legislation through September 6, including offering recipients an extra $300 subsidy per week in addition to currently available state UI benefits.
Under the law, individuals with an adjusted gross income of $75,000 or less ($150,000 for joint filers) are eligible to receive a one-time payment of $1,400 plus an additional $1,400 for each dependent child. The amount of the checks phases down for individuals earning at least $75,000 and cuts off completely for anyone above the $80,000 mark.
Some other notable provisions include:
- Allowing employers with fewer than 500 employees to provide leave for COVID-related reasons (as under the Families First Coronavirus Response Act) with the cost set off by fully refundable federal tax credits through September 30;
- Covering 100% of the cost of continuing health insurance under COBRA for situations in which an employee has lost coverage under their employer's health care plan because of a layoff or involuntary termination;
- Adding $7.25 billion to the Paycheck Protection Program Flexibility Act of 2020, which provided for fully forgivable loans for certain employers on the condition that they maintained their payroll and employee headcount; and
- Providing $86 billion to help fund struggling multi-employer pension plans to ensure workers receive their retirement benefits for the next 30 years.
The new law also has ramifications for the Affordable Care Act (ACA) as it expands eligibility for subsidies to buy health insurance to people of all incomes under the ACA. In changing the formulas for health insurance tax credits, it will allow a much wider number of individuals to qualify for the credits.
The package also provides $25 billion in relief for small and mid-sized restaurants, which have been especially hard-hit during the pandemic. In addition, it provides significant funding for COVID-19 vaccine activities.
Left out of the American Rescue Plan Act was any change to the federal minimum wage for now, which remains at $7.25 where it has been since July 2009, though the minimum wage for many federal contractors recently increased to $10.95.