On March 11, President Joe Biden signed into law the American Rescue Plan Act of 2021 (ARPA), which appropriates $1.9 trillion in resources to assist with economic recovery from the COVID-19 pandemic. The provisions and mandates of the new Act will impact businesses in several important ways.
Restaurant Revitalization Fund Grants
$28.6 billion in funds have been made available to the Small Business Administration for a Restaurant Revitalization Fund (RRF). Eligible businesses can receive up to $10 million in grants under the ARPA—including restaurants, bars, or any place that has as its the primary purpose serving customers food or drink.
The ARPA provides that the amount of the grant should be equal to that company’s “pandemic-related revenue loss,” or the difference between its 2019 revenue and its 2020 revenue. This amount is reduced if the company received a Paycheck Protection Program (PPP) loan.
As of late March, the application process for a RRF grant has not yet been launched and an official launch date has not yet been announced. Employers hoping to apply for a RRF grant should keep an eye on the Small Business Administration’s Funding Programs page for updates in the near future.
The ARPA also appropriates $1.25 billion for grants to eligible hard-hit businesses whose primary purpose is not serving food or drink—such as concert venues, nightclubs, movie theatres, and live production venues.
Payroll Tax Credits for Employers Who Provide Paid Sick Leave
This provision of the Act is designed to incentivize employers to pay employees for leave taken under the Families First Coronavirus Response Act (FFCRA) by granting them tax credits. The ARPA expands the number of reasons employees can take paid leave under the FFCRA. Reasons now include getting the vaccine, recovering from the effects of the vaccine, and getting tested for COVID-19.
Under the Act, the duration of paid leave for which an employer may claim a tax credit is now extended by 10 days. The maximum tax credit available to employers who voluntarily grant their employees such paid leave is also increased, from $10,000 to $12,000 per employee. This portion of the Act goes into effect April 1, 2021.
The ARPA disqualifies employers from receiving this tax credit, however, if they have violated the provisions of the FFCRA. Retaliating against an employee for taking FFCRA leave constitutes a violation, or allowing paid leave in a discriminatory fashion rather than paying all employees who take leave equitably. Employers who are found to have failed to comply with FFCRA requirements with respect to any wages will not be able to receive a tax credit from those wages.
The ARPA extends pandemic unemployment benefits until September 6, 2021. This includes pandemic unemployment assistance (PUA), pandemic emergency unemployment compensation (PEUC), federal pandemic unemployment compensation (FPUC), and other programs designed to assist those who are out of work due to COVID-19.
Expanded COBRA Coverage
The ARPA also mandates expanded COBRA coverage. Both employers and employees should become familiar with this important provision. For more on the new COBRA subsidy, see our blog post dedicated to this topic.
The law pertaining to the issues addressed by the ARPA has seen several modifications throughout the pandemic. It is critical for businesses to remain up to date on these changes. If you have questions about how the ARPA affects your business, contact us today.