The American Rescue Plan and other upcoming legislation have plenty of provisions that HR professionals should have on their radar.

American Rescue Plan

By narrow margins, Congress passed the American Rescue Plan Act of 2021 (H.R. 1319) that was signed by President Biden on March 11, 2021. The law authorizes $1.9 trillion in spending on COVID-19 related assistance as well as provisions unrelated to the pandemic. With this legislation, Congress has authorized about $5.5 trillion in spending since the start of the pandemic. The previous laws included the Coronavirus Aid, Relief and Economic Security (CARES) Act, the Families First Coronavirus Response Act (FFCRA), and the year-end spending and aid package that was enacted in December 2020.

The law included a number of provisions that have reported widely, including:

• Payment of $1,400 to individuals earning $75,000 per year; couples earning $150,000 per year would receive the full $1,400/person benefit.
• Additional funding for vaccines, testing and contact tracing.
• A total of $350 billion in funding for state and local governments.
• Temporary expansion of the child tax credit, from $2,000 a year for children through age 16 to $3,600 a year for children under age 6 and$3,000 a year for children age 6-17.
• Funding to assist schools to reopen.

However, these provisions are not the only ones relevant to HR professionals.

• Unemployment benefits — The law extends the existing additional $300 in weekly unemployment benefits through Sept. 6, 2021 and makes the first $10,000 in unemployment benefits not subject to federal tax. The additional $300 in weekly unemployment benefits had been scheduled to expire on March 14, 2021.
• COBRA Subsidy — The federal government would pay 100% of COBRA insurance premiums for employees who lost their jobs because of the pandemic, and for their covered relatives, through Sept. 30, 2021. This would allow them to remain on the health plan offered by their former employer. Employers will obtain the subsidy when they complete Form 941 (Employer’s Quarterly Federal Tax Return) through a payroll tax credit against their quarterly taxes.
• FFCRA Tax Credits — The federal Families First Coronavirus Response Act (FFCRA) expired on Dec. 31, 2020 and with it, the obligation of covered employers to provide emergency paid emergency sick leave and expanded family and medical leave. Late last year, Congress extended the tax credit for employers who voluntarily continued to provide the leave through March 31, 2021. The American Rescue Plan would extend the COVID relief tax credit until Sept. 30, 2021. The IRS has issued guidance on the tax credits. The law also would add to the FFCRA reasons for which leave can be provided, the following categories:
  • The employee is obtaining immunization (vaccination) related to COVID-19.
  • The employee is recovering from any reaction related to the vaccination.

The law also includes non-discrimination rules to provide that no tax credit is available if the employer, in determining availability of the paid leave, discriminates against highly compensated employees, full-time employees, or employees based on tenure with the employer. The law would allow employees who already took 10 days of emergency paid sick leave under the FFCRA to be given an additional 10 days of leave for which the employer could receive a credit. The law would remove the two week waiting period on emergency FMLA leave and raise the cap on emergency FMLA leave from $10,000 to $12,000.

DOL Enforcement Activities — The law would provide an additional $200 million in funding for worker protection and enforcement activities by the Department of Labor.

COVID relief provisions in the law that are specific to government employees include:

• Additional Paid Sick Leave for Federal Employees — Through Sept. 30, 2021, federal employees will be provided with up to 15 weeks or 600 hours of paid sick leave, which is capped at $1,400 per week, due to coronavirus symptoms, or if they are caring for a family member with the virus, to get vaccinated or if they have symptoms following vaccination. The leave also would be available to federal employees who are caring for a child whose school or child-care provider is closed or if there is only remote learning. The law also includes a presumption for workers’ compensation claims that frontline federal employees who test positive for COVID-19 contracted during their official duties.
• FFCRA Tax Credits — The FFCRA tax credits would be available after March 31, 2021 to state and local governments. They previously were ineligible for the tax credits.
• Premium Pay — The new funding provided to state and local governments in the law could be used to provide premium pay to essential employees that could not exceed $13 per hour or $25,000 per worker.

Minimum Wage Increase

A minimum wage increase was included in the version of the American Rescue Plan that passed the House of Representatives. The Senate considered the bill under its reconciliation rules since only a majority would be required to pass as opposed to the 60 votes needed to prevent a filibuster for other bills. The Senate parliamentarian ruled that the minimum wage increase could not be included in a reconciliation bill, so it was removed from the Senate version of the COVID relief legislation.

A minimum wage increase is certain to be considered again during this session of Congress. The federal minimum wage, which is $7.25/hour was last increased in 2009. The Raise the Wage Act of 2021 (H.R. 603, S. 53) was introduced during January 2021 and would increase the minimum wage over the course of several years.

The federal minimum wage is less relevant since 29 states and some local governments have set their minimum wages above the federal minimum. The Congressional Budget Office (CBO) estimates that 17 million workers would be impacted by the increase in the minimum wage. CBO believes that 1.4 million workers would lose their jobs.

Protecting the Right to Organize (PRO) Act

The House of Representatives passed the Protecting the Right to Organize (PRO) Act (H.R. 802). The bill has been passed previously by the House of Representatives but has not yet  been considered by the U.S. Senate. The bill has the support of President Biden who issued a statement urging the passage of the PRO Act.

The bill would amend the National Labor Relations Act, which applies to the private sector, to bar employers from retaliating against unionization efforts, protect the right of workers to strike and override right-to-work laws in states that allow employees to choose not to pay union dues. The National Labor Relations Authority could impose fines against employers that engage in unfair labor practices and require arbitration when contract agreements cannot be reached.

The bill also includes provisions concerning independent contractors and would make it easier to demonstrate that they are employees under federal labor law. Gig workers would be able to organize unions, which is currently a right only given to employees.

According to the Bureau of Labor Statistics (BLS), in 2020 only 10.8% of workers were union members, which is a decline from 20.1% in 1983, the first year in which BLS collected unionization data. The public sector has a much higher percentage of union members as compared to the private sector — 34.8% (public sector) as compared to 6.3% (private sector).

Neil Reichenberg is the former executive director of the International Public Management Association for Human Resources. He is an attorney, a frequent writer and speaker on public policy and human resource issues, and an adjunct faculty member at George Mason University. For questions or additional information, contact Reichenberg at neilreichenberg@yahoo.com.