Help may be on the way to millions of Americans and specific businesses thanks to the new American Rescue Plan Act of 2021 (ARPA), which President Biden signed into law on March 11th, 2021. What are the implications for employers and employees?
For one, nearly 8 out of 10 Americans are expected to receive stimulus checks. This will be a welcome relief for those who have been negatively impacted by the pandemic. Employers who reduced their workforce or wages and hours may feel a little less stressed knowing team members will be getting some much-needed financial assistance.
Those individuals who lost their jobs and continue to collect unemployment may also be eligible for extra assistance. The government is extending the additional $300 per week in unemployment benefits through September 2021. It is also offering greater subsidies for health insurance coverage purchased through an exchange. Unfortunately, the unintended consequence is that this could put pressure on employers to find staff for lower-wage positions.
In addition, employees who are on COBRA will pay nothing for their coverage through September 2021. This will be funded by employer tax credits.
Where is the aid for businesses in the American Rescue Plan Act?
Families First Coronavirus Response Act
Tax credits for FFCRA leave are extended for those businesses that voluntarily provide paid sick leave and paid family leave from March 31st through September 30th, 2021. The leave now includes time for receiving vaccinations, awaiting results of COVID-19 tests or recovering from vaccine related illnesses.
Economic Disaster Loans
Administered through the SBA, the EIDL program offers emergency funding in low-interest loans to provide working capital to small businesses. Another $15 billion in funding has been added to the pool under the ARPA.
Employee Retention Tax Credits
Employee Retention Tax Credits have been extended through the end of 2021. Previously, credits were only allowable for Q1 & Q2 2021. Employers this year can claim 70 percent of up to $10,000 in qualified 2021 wages per employee for each quarter. That’s up to $7,000 per employee per quarter — or up to $28,000 per employee for the year. The credits are also now available to previously ineligible employers who took a loan under the PPP.
Loans and grants
Paycheck Protection Program
There is another $7 billion available in the Paycheck Protection Program. This gives small businesses the opportunity to get loans that are 100% forgivable if certain standards are met. Access to PPP funds is also easier now for nonprofits, digital media companies, sole proprietors, independent contractors and self-employed individuals.
If you own a small business and need economic aid because of COVID-19, now is the time to talk to your bank about requirements and eligibility. For questions on employee-related issues, NEMR Total HR is ready to help. Chat Live with us to learn more or Email Us.
For complete details about Paid Leave, COBRA, the Employee Retention Tax Credit and more, check out this article from the Society for Human Resource Management. https://www.shrm.org/resourcesandtools/tools-and-samples/hr-qa/pages/how-does-the-american-rescue-plan-act-affect-employers.aspx