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Second Stimulus – Unemployment and Paid Sick Leave

As part of the recently enacted Coronavirus Response and Relief Supplemental Appropriations Act of 2021, updates and/or extensions were made to unemployment benefits, paid sick leave, and payroll tax deferrals.

Unemployment Compensation

Unemployment benefits of up to $300 per week, called Federal Pandemic Unemployment Compensation (FPUC) have been extended. The benefit could start as early as December 27 and will run through March 14, 2021. An unemployment benefits program for contract and gig workers, which was set to expire at the end of the year, has also been extended.

Additional changes to the program:

  • A new program was created to provide an additional $100 weekly jobless benefit to self-employed individuals who earn at least $5,000 in the most recent tax year but weren’t eligible for benefits under the Pandemic Unemployment Assistance program. The additional benefit is voluntary for states and would be added to the FPUC benefit through March 14, 2021.
  • Increases the duration of Pandemic Unemployment Assistance benefits to as long as 50 weeks from the previous limit of 39 weeks, for individuals who do not qualify for regular benefits.
  • Individuals that have exhausted regular benefits under the Pandemic Emergency Unemployment Compensation program is extended from 13 weeks to 24 weeks.
  • Requires states to have procedures in place 30 days after enactment to address unemployment claimants who refuse to return to work or refuse to accept an offer of work without good cause, such as:
    • A reporting method for employers to notify the state of the refusals
    • A notice to claimants about return-to-work laws, rights to refuse to return to work or to refuse suitable work. Additionally, information on contesting a denial of a claim, as well as what constitutes suitable work, including a claimant’s right to refuse work that poses a risk to the claimant’s health and/or safety.

Paid Sick Leave

The refundable payroll tax credits for paid sick and family leave that were established in the Families First Coronavirus Response Act is extended through March 31, 2021.

The tax credit for paid family and medical leave is extended through 2025. The credit is equal to 12.5% of eligible wages if the rate of payment is 50% of such wages and is increased by 0.25 percentage points (but not above 25%) for each percentage point that the rate of payments exceeds 50%. The maximum of family and medical leave that may be utilized with respect to any qualifying employee is 12 weeks per taxable year.

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