As of March 11, a new round of COVID-related legislation has been signed by President Biden. It’s called the American Rescue Plan Act of 2021, and it is a $1.9 trillion relief bill aimed at providing additional relief to U.S. employers and their workers. With any luck, the continued tax credits and expanded federal unemployment benefits should provide some relief to the industries hit hardest by the ongoing pandemic.
Exciting as it sounds, it’s understandable if you haven’t had the chance to sit down and read through the bill yourself. We’ve taken the liberty of gathering the key takeaways for your hourly workforce and how it may affect operation in the months ahead.
Key Takeaways of Latest COVID-19 Legislation
As previously stated, the American Rescue Plan Act’s primary aim is to support small businesses struggling as a result of the economic crisis stemming from COVID-19—many of which are still having to lay off significant numbers of employees and at risk of permanently shutting their doors.
The principal elements within the new plan hearken back to federal support efforts from earlier in the pandemic, which suggests they won’t be the last of pandemic-centered relief updates. Further changes may be made at a future date. As the plan stands now, certain deadlines and benefits will just have to be modified on an individual basis and be revisited as the pandemic develops.
Here are the key takeaways for hourly workforce employers:
- Additional Aid for Small Businesses: The plan includes increased funding towards small-business grants and expanded eligibility for the Paycheck Protection Program (PPP). The American Rescue Plan Act allocates a total of $50 billion to small businesses, including an additional $7.25 billion in PPP funds, and supports both payroll and operational expenditures for those who qualify. While the permitted uses for these funds and tax grants are similar to earlier versions of the PPP, the absence of the forgiveness process coupled with an enhanced coverage period allows for more flexibility in how funds can be used overall.
- FFCRA and Other Tax Credit Extensions: The Families First Coronavirus Response Act (FFCRA) provides refundable tax credits to eligible employers to reimburse them for paid leave wages and was previously extended to the end of this month. The American Rescue Plan Act has extended federal tax credits again through September 30, 2021 and has increased the maximum per-employee tax credit that employers can receive. *The relief package has expanded three other tax credits, as well: the employee retention credit to December 31, which allows eligible employers to claim a credit for paying qualified wages to employees, the child tax credit for parents, and the earned income credit for low income taxpayers.
- COBRA Premium Subsidy: Under the American Rescue Plan, the government has promised to subsidize 100 percent of COBRA premiums for laid-off workers and their covered family members, allowing them to stay on their employment-sponsored health plan through September 2021. The legislation included specific requirements for employers to update COBRA notices, including instructions for announcing the premium subsidy to all eligible individuals.
The initial version of the American Rescue Plan Act package included several workplace provisions that were removed, including raising the federal minimum raise to $15 an hour. As such subjects are sure to be revisited in the near future (and drastically impact hourly workforces), you will need to stay abreast of legislative updates as they develop.
Stay Up-to-Date on COBRA Legislation
EPAY Systems is committed to helping our customers navigate through difficult times. Our aim is to lessen the uncertainties and protect your operation on all fronts. That’s why, in addition to our Human Capital Management solution, we offer compliance updates, weekly blogs and monthly webinars to keep you as informed as possible.
Our COBRA benefits administration services take the burden off of your staff by covering all your COBRA-required compliance processes and notifications. From implementation to billing and payment collection, we’ll handle all your documentation and communication needs. We can even connect directly with your dependents or terminated employees to ensure only eligible employees receive COBRA benefits!