Paid Family and Medical Leave and Paid Sick Leave Provisions in the American Rescue Plan Act

By Sapna Mehta

The COVID-19 pandemic continues to have devastating implications on workers earning low wages and their families. The United States is now a full year into the pandemic, and parents are still struggling to work, maintain their families’ economic security, and care for children who would normally be in child care or attending school. Infections and illness from the virus continue as well. Economic and caregiving burdens are acutely felt by women—particularly Black, Latinx, and American Indian and Alaska Native women—families with low incomes, and workers with unpredictable schedules.  Workers paid low wages are the least likely to have access to any paid leave. 

Recognizing that the pandemic was exacerbating the country’s caregiving crisis, Congress passed the Families First Coronavirus Response Act (FFCRA) in March 2020, providing some private sector employees up to 10 paid sick days and up to 12 weeks of paid family and medical leave.  This was an important step toward providing workers earning low wages with access to paid leave during the pandemic. The leave was fully paid for by the federal government through tax credits to employers. 

The FFCRA provisions were temporary and set to expire on December 31, 2020. In December, Congress passed the Consolidated Appropriations Act 2021, which extended the tax credit through March 31, 2021, for those employers choosing to provide the leave. Unfortunately, Congress did not extend the requirement that employers provide paid leave, effectively creating a voluntary program where employers that choose to provide paid leave can be reimbursed through the tax credits. 

On March 11, 2021, President Biden signed the American Rescue Plan (ARP). While it does not reinstate the requirement that employers provide paid leave, it does extend and expand the tax credits to employers who choose to provide paid leave. The tax credits will cover the cost of certain COVID-19 related leave taken from April 1, 2021 through September 30, 2021, effectively “resetting the clock” on the emergency leave.

Read more here or download the fact sheet for more information.