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Using American Rescue Plan State and Local Fiscal Recovery Funds to Advance Paid Leave

On March 11, 2021, President Biden signed the American Rescue Plan Act, a $1.9 trillion economic stimulus package designed to address the COVID-19 pandemic. This legislation included the creation of the State and Local Fiscal Recovery Funds program, which provides money directly to states and localities to help with the response to and recovery from the COVID-19 pandemic. On Thursday, January 6, 2022, the United States Treasury Department released its final rule on the state and local American Rescue Plan (ARP) funds. In exciting news, the final rule confirms that creating, expanding, or financially supporting paid sick time, paid family leave, and paid medical leave are permissible uses of these funds. This means that the State and Local Fiscal Recovery Funds provide an unprecedented opportunity for states and localities to advance paid leave for workers.

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