No. Unfortunately, under the American Rescue Plan, businesses are not required to provide paid sick days or paid family and medical leave. This means that many working people who most need this benefit will not be able to access it--it’s a voluntary program that employers can choose to participate in. We believe that everyone deserves comprehensive paid family and medical leave. If you’re one of the millions of people who agree, take action here. Nonetheless, the American Rescue Plan is one step forward in making paid sick and family leave more available.

The American Rescue Plan provides payroll tax credits for employers who choose to provide employees with paid leave for a COVID-19 related reason.

The tax credits apply to leave taken between April 1 and the end of September 2021 for a COVID-19 related reason (more on this below).

So functionally, an employer can--and should!--provide paid sick or family leave to their employees, and the federal government makes this cost neutral via tax credits.

Employers with more than 50 and fewer than 500 employees are eligible. In an improvement over a previous emergency paid leave program, the American Rescue Plan allows access to the credits for state and local governments, as well as Federal governmental instrumentalities that are tax-exempt 501(c)(1) organizations--such as some schools, libraries, and hospitals.

All employees of approved employers are eligible. In fact, the legislation prevents employers from claiming the credit if they make leave available in a way that discriminates against low wage workers, part-time workers, or newer employees.

Employers can receive tax credits for employees to take:

• The emergency paid sick leave credit covers up to 80 hours of paid leave with 100% pay (or a pro-rated amount for part time employees) if an employee is unable to work because they are quarantined due to COVID-19 exposure, caring for someone in quarantine with COVID-19 symptoms, experiencing COVID-19 symptoms and seeking a medical diagnosis, and/or are obtaining or recovering from a coronavirus vaccination.
• Up to an additional 10 weeks of paid leave at ⅔ pay for any of the reasons listed above.
• Up to 12 weeks of paid leave at two-thirds regular pay to care for an individual in quarantine or a child under 18 years of age whose school or child care provider is closed or unavailable for reasons related to COVID-19, and/or because the employee is experiencing a condition similar to COVID-19.
• (See more details about reasons employees can take leave below)

The maximum paid leave tax credit under American Rescue Plan is $12,000 per employee per year. This legislation also resets the clock on March 31, 2021 so that anyone who took leave in the past year can take leave again.

The American Rescue Plan covers leave for the following COVID-19 related reasons, according to the U.S. Department of Labor.

“[A]n employee qualifies for paid sick time if the employee is unable to work (or unable to telework) due to a need for leave because the employee:

1. is subject to a Federal, State, or local quarantine or isolation order related to COVID-19;
2. has been advised by a health care provider to self-quarantine related to COVID-19;
3. is experiencing COVID-19 symptoms and is seeking a medical diagnosis;
4. is caring for an individual subject to an order described in (1) or self-quarantine as described in (2);
5. is caring for a child whose school or place of care is closed (or child care provider is unavailable) for reasons related to COVID-19; or
6. is experiencing any other substantially-similar condition specified by the Secretary of Health and Human Services, in consultation with the Secretaries of Labor and Treasury.

[A]n employee qualifies for expanded family leave if the employee is caring for a child whose school or place of care is closed (or child care provider is unavailable) for reasons related to COVID-19.”

The American Rescue Plan also allows credits for an employee who is receiving a vaccination or recovering from its side effects.

Self-employed people can take advantage of the tax credit for paid leave. A Better Balance has a guide for self-employed people who need the paid leave tax credit.

Here’s a sample email you can send to your employer to tell them about the program. You may want to send it to both your boss and your HR department if you have one. Share this page on social media to spread the word so more employers and employees know about the program.

Hello [YOUR EMPLOYER]--

I recently learned that the American Rescue Plan signed into law on [date] includes a provision for employers like you to provide paid sick and leave days and receive a payroll tax credit. Under this legislation, employers can receive up to $12,000 per employee in payroll tax credits to offset the cost of providing their employees paid leave for Covid-19 related reasons.

Here’s a bit more information about the program:

• The American Rescue Plan provides payroll tax credits up to $12,000 per employee for employers who choose to provide employees with paid leave for a COVID-19 related reason.
• Under this legislation, employers receive tax credits to provide up to 2 weeks of paid leave with 100% pay for employees unable to work due to a government mandated or health care provider advised quarantine or for time to seek a medical diagnosis if experiencing COVID-19 symptoms, and up to an additional 10 weeks of paid leave at two-thirds pay for these reasons.
• Employers receive tax credits to provide up to 12 weeks of paid leave at two-thirds regular pay to care for an individual in quarantine or a child under 18 years of age whose school or child care provider is closed or unavailable for reasons related to COVID-19, and/or because the employee is experiencing a condition similar to COVID-19.
• The tax credits apply to leave taken between [DATE] and the end of September 2021.
• Nearly all employers are eligible, including large and small companies and non-profit organizations, state and local governments, as well as Federal governmental instrumentalities that are tax-exempt 501(c)(1) organizations.
• All employees of approved employers are eligible, including part-time workers and newer employees.
• So functionally, an employer can provide paid sick or family leave to their employees, and the federal government makes this cost neutral by providing an immediate dollar-for-dollar tax offset against payroll taxes.

If you were familiar with the paid leave provisions of the Families First Coronavirus Response Act (FFCRA), this is quite similar. The IRS has more detailed information here: https://www.irs.gov/newsroom/covid-19-related-tax-credits-for-paid-leave-provided-by-small-and-midsize-businesses-faqs#overview-paid-sick-leave-refundable-credit

Thank you for taking the time to look into the program!

Sincerely,
[YOUR NAME]

If you live in California, New Jersey, New York, Rhode Island, Washington State, or Washington D.C., you are able to use existing paid family and medical leave programs to take the time that you need.

• California has updated its Paid Family Leave Program to specifically address questions about the coronavirus. If you live in California and need additional support Legal Aid At Work may be able to help.
• New Jersey published a guide to benefits including paid family leave during the coronavirus crisis.
• New York published a guide to using its paid family leave program during the coronavirus crisis. If you live in New York and need additional support A Better Balance may be able to help. They also have a resource guide on New York state-specific legislation.
• Rhode Island published a guide to benefits including paid family leave during the coronavirus crisis.
• Washington State published a guide to using its paid family leave program during the coronavirus crisis.
• Washington D.C.'s new paid family leave program started offering benefits to DC workers in July 2020.

Connecticut, Massachusetts, and Oregon all have passed paid family and medical leave laws, but those programs are not yet implemented, and people are not able to receive benefits.

• Connecticut published an FAQ for people in need of information about access to unemployment benefits and/or sick days.
• Massachusetts published an FAQ for people in need of information about access to unemployment benefits and/or sick days.
• Oregon published an FAQ for people in need of information about access to unemployment benefits and/or sick days.

Yes, we agree. People across the country, especially caregivers, are facing impossible circumstances trying to care for their families, stay safe and healthy, and work. Without a national paid leave policy, only 5% of low-income people have access to a single day of paid family and medical leave through their employer. It is a travesty that many essential workers have no paid leave during a global pandemic. Join the fight for bold and comprehensive paid family and medical leave by writing to your senators today.

Our friends at A Better Balance have several resources:

• A fact sheet on paid leave benefits and the American Rescue Plan
• An explanation of the voluntary paid leave tax credits
• FAQs on the new federal employee emergency paid leave rights
• A guide to tax credits on emergency paid leave for self-employed workers

The Main Street Alliance has a guide for small businesses who want to use the emergency paid leave benefits.