With states reducing restrictions on isolation and gatherings, employers are exploring ways to provide incentives for employees to get their vaccinations. New guidance from the IRS makes clear that
employers can qualify for credits that support incentives for employees that employers may provide to
ease the burden of vaccination.
On June 11, 2021, the IRS issued additional guidance on The American Rescue Plan Act (ARPA) provisions for paid sick leave and expanded FMLA credits that are available through September 30, 2021. To qualify for tax credits, a covered employer must provide a new allocation of sick leave to all covered employees. Beginning April 1, 2021, eligible employers must provide 80 hours of sick leave in a two-week period for full-time employees and up to the average hours worked in a typical two-week period for part-time employees.
The ARPA expanded the permitted uses of emergency paid sick leave to include time off for COVID
testing, vaccines, and vaccine recovery, along with the reasons set out in the original FFCRA program.
Covered employees now can use emergency paid sick leave to:
- Seek or await the results of a COVID-19 diagnosis
- Obtain a COVID-19 immunization
- Recover from any injury, disability, illness, or condition related to a COVID-19 immunization
The ARPA also changes the expanded FMLA provisions to include all of the same reasons that emergency sick leave is available — i.e., not just school or child care closings. Covered employees now can use expanded FMLA leave for any of the reasons allowed for in the original emergency paid sick leave, including to care for a family member subject to quarantine or isolation, plus the ARPA’s additional uses.
In addition, the law now requires partial wage replacement during the first two weeks of expanded
FMLA leave (the first two weeks were unpaid under the FFCRA).