Last week, President Biden encouraged employers to pay employees for time off to get vaccinated against COVID-19 and highlighted the tax credits available for employers with less than 500 employees. The American Rescue Plan Act of 2021 (ARPA) signed by the President on March 11, 2021 continued the tax credits available under the Families First Coronavirus Response Act (FFCRA) for covered employers who voluntarily decide to provide “qualified” paid sick leave or paid family leave wages to their employees through September 30, 2021. As discussed in our March article, employers can receive the tax credit for providing leave for certain qualifying reasons. Those reasons include, among other COVID-related reasons: (1) obtaining a COVID-19 immunization and (2) recovering from an injury, disability, illness or condition related to COVID-19 immunization.
On the same day as President Biden’s statement, the IRS issued this Fact Sheet providing further details about the tax credits available under the ARPA including information about how employers may claim the credit for paid leave if they choose to provide it for the reasons covered under the ARPA including for employees to obtain or recover from COVID-19 vaccinations.
While paid time off under the federal ARPA is optional for employers, some states including New York, require employers to provide employees with paid time off for COVID-19 vaccinations. Last week, Chicago joined the list of jurisdictions legislating vaccination pay requirements. Chicago’s ordinance includes pay obligations for employers who mandate vaccinations and requires other employers to allow employees to use accrued paid time off to obtain vaccinations. Employers considering pay obligations for time off from work for COVID-19 vaccination should also consider state and local paid sick leave laws which may cover time off for preventative care that would include vaccinations. Finally, state and federal wage and hour laws may impact whether pay is required for time spent receiving a vaccine depending on the employee’s exempt/non-exempt status, the timing of the vaccination, and whether the vaccine is required for the employee’s job.