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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.

  • Fact Sheet: A State and Local Opportunity to Advance Paid Leave for Workers: American Rescue Plan State and Local Funds Can Be Used for Paid Leave
  • Blog Post: Using Federal Funds to Advance Paid Leave: New Developments from Colorado and Vermont
  • Memo: Using the American Rescue Plan’s State and Local Fiscal Recovery Funds to Address the Care Crisis
  • February 2022 Webinar: Discussion on American Rescue Plan Act and Paid Leave Opportunities
  • Best Practices for Paid Family Leave Policies for Local Government Employees
  • September 2022 Webinar: American Rescue Plan Funds and Paid Leave: Exciting Updates and Opportunities 
  • For more information or to discuss opportunities for using ARP recovery funds to advance paid leave in your state or city (including paid sick time, emergency leave, paid family and medical leave, government employee leave, contractor sick leave, and/or paid leave incentive programs): please contact Meghan Racklin at
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