Get expert advice on every topic you need as a small business owner, from the ideation stage to your eventual exit. Our articles, quick tips, infographics and how-to guides can offer entrepreneurs the most up-to-date information they need to flourish.
June 8, 2021
President Joe Biden’s decision to massively ramp up government spending through the $1.9 trillion American Rescue Plan aims to expedite the country’s recovery from the health and economic fallout of the COVID-19 pandemic.
Among the plan’s provisions are initiatives to contain the pandemic, help families and communities facing economic damage and lay the groundwork for a broad revival. Observers describe it as much bolder than the response to the Great Recession from 2007 to 2009, which they say shows that leaders have learned significant lessons from the failures of past years.
An overview of the American Rescue Plan as it pertains to employers and employees is below.
During the initial two days of the program, around 186,200 restaurants, bars and other eligible businesses across all states applied for relief.
The fund allocates $28.6 billion in pandemic assistance grants, offering up to $10 million per business with a limit of $5 million per physical location; funds can be used to cover rent, payroll, utilities and other expenses.
In addition, forgivable loans to help cover payroll and other operating costs were also offered through the Paycheck Protection Program.
Partial unemployment also allows employees to go back to work with a new employer at reduced hours will still receiving some unemployment benefits. This is meant to be an option for people who may not otherwise qualify for short-term compensation because they aren’t returning to their previous jobs.
Under all UI programs, including the Pandemic Unemployment Assistance program, workers may not reject a job due to a general, nonspecific concern about COVID-19. According to the PUA program, a worker may receive benefits if the employer certifies weekly that one of the few specific COVID-related reasons specified by Congress is the cause of their unemployment.
President Biden has also ordered the secretary of labor to work with states to reinstate work search requirements for UI recipients, if health and safety conditions allow, putting in place appropriate work search requirements as the economy continues to rebound, vaccinations increase and the pandemic has been controlled.
The American Rescue Plan aims to slash child poverty in half by providing families $3,600 per every child under age six years and $3,000 per child age 6-17 years. The lowest-income parents receive the benefits even if they don't owe taxes, and it will be delivered monthly beginning July 2021. The benefit amount is slowly reduced for couples earning over $150,000 and for individuals earning over $75,000 annually.
Businesses can be compensated for the premium subsidy via a payroll tax credit, for which there is no income cap. Also, the ARP extends the COBRA election period and offers a second chance to elect COBRA continuation coverage for those qualified individuals who otherwise would be covered but either never elected COBRA coverage or discontinued their COBRA coverage earlier.
The American Rescue Plan expands the qualifying reasons for emergency paid sick leave and resets the balance of EPSL that employers can voluntarily offer to eligible employees to two weeks as of April 1, 2021. In other words, if an employee has exhausted the original two weeks before April 1, 2021, employers have the option to provide that employee an additional two weeks of EPSL for use between April 1 and September 30, 2021.
Employees who have not exhausted the original two weeks of EPSL by April 1, 2021, will not carry over such leave. The EPSL is available for up to two weeks when an employee is unable to work or telework due to the following reasons:
The ARP has increased the qualifying reasons for emergency family and medical leave to include the original EFMLA qualifying reasons and all of the EPSL qualifying reasons. It also removes the provision that the first two weeks of EFMLA are unpaid. So, employers may now voluntarily provide up to 12 weeks of paid EFMLA leave in exchange for a tax credit.
Shivali Anand is a content developer at Escalon Business Services. Her expertise lies in creating consistent and relevant B2B marketing, SEO and social media content. She is armed with a PG Diploma in English Journalism from the IIMC Dhenkanal, Odisha. After starting as a travel writer, she embarked upon a career as a copyeditor, news content specialist, and researcher across organizations including Ministry of MSME, Vaco Binary Semantics LLP, Doordarshan News, and New Delhi Times.
We provide you with essential business services so you can focus on growth.
