President Donald Trump on Wednesday signed the Families First Coronavirus Response Act, a measure created to ensure paid sick leave for workers and to widen coronavirus testing.
Senators overwhelmingly supported the House bill that covers the cost of all coronavirus testing, expands federal food programs serving low-income seniors and needy families, and provides paid sick leave for workers forced to stay at home.
The vote was passed 90-8.
This legislation will:
- Offer two weeks of paid sick and family leave to many American workers who have been forced to stay home because of COVID-19 or who have children whose schools have closed. Workers will get 100 percent of their normal salary.
- Provide up to 12 weeks of paid leave to many of those who have children whose schools have closed. Workers would get about 67 percent of their normal salary for this period.
- Bolster unemployment insurance protections.
- Provide free testing for the coronavirus for those who need it.
- Boost food assistance for needy families and federal funding for Medicaid.
The new law grants two weeks of paid sick leave at 100 percent of the person’s normal salary, up to $511 per day. It would also provide up to 12 weeks of paid family and medical leave at 67 percent of the person’s normal pay, up to $200 per day.
In other words, paid sick leave would fully compensate employees earning up to about $130,000 a year for that two-week period, and paid family and medical leave would fully compensate employees earning up to about $75,000 a year for the three-month period, according to the Center on Budget and Policy Priorities.
In addition, employees don’t necessarily have to have the coronavirus to receive the benefits. The two weeks of paid sick leave apply to anyone told to quarantine, showing symptoms, exposed to the virus, or trying to get a test or preventive care. Although this is a rather broad definition and the IRS likely will have to arrive at an exact rule, it’s apparent that Congress wanted to avoid a situation in which everyone is trying to obtain “a doctor’s note” to qualify.
Qualifying for family leave is different. An individual is eligible to take up to three months of paid leave to care for a child whose school or child-care facility is closed due to the coronavirus.
The Act also states that part-time employees will receive paid sick leave equivalent to the number of hours they typically work during a two-week period. For example, if a person usually works 20 hours a week, he or she is eligible for up to 40 hours of pay.
However, the law doesn’t cover everyone.
Small and mid-sized companies are required to provide these benefits for workers impacted by the coronavirus, but Labor Secretary Eugene Scalia can exempt businesses with fewer than 50 employees, as well as health-care providers such as hospitals and nursing homes.
The exemptions would apply if it “would jeopardize the viability of the business.” At this point, it’s unclear how lenient the Trump administration will be with these exemptions.
Of course, many small-business owners are worried about how to pay for these benefits, especially at a time when business across numerous industries has basically come to a halt. The bill provides a tax credit to cover the costs. The credit is applied to the tax the company normally pays for each employee’s Social Security. If sick leave or family and medical leave ends up costing more than the Social Security bill, the U.S. government will send the employer a check to cover the remaining costs. How this will be determined is up to the Treasury and the Internal Revenue Service.
Experts noted one of the biggest issues with these new benefits is the fact that they are largely being paid for by tax credits. That means small businesses will have to apply to the IRS to get a tax credit – or a tax refund if a person’s tax bill is not as large as the cost of their paid sick and family leave.
Although the Trump administration has pledged to get this process up and running as quickly as possible, it will take some time to create the forms and procedures.
Small-business groups have already voiced concerns over the fact that restaurants and travel and hospitality companies have seen sales plummet – and, as a result, simply don’t have the cash on hand to begin paying these benefits.
The bill’s signing comes as the Trump administration is busy negotiating with Congress on the crafting of its next emergency relief package – one that would provide checks of $1,000 or more for Americans and financial lifelines for businesses socked by the current coronavirus pandemic that is ravaging the economy.
The upcoming bill also is expected to help major industries besieged by a widespread shutdown of the economy, such as the airlines, and help small businesses including restaurants that are being forced to close around the country, but find themselves having to provide mandated paid leave under the new Families First legislation.
Senators Marco Rubio of Florida and Susan Collins of Maine also have introduced a $300 billion small-business emergency economic relief plan that will help small businesses impacted by the coronavirus pandemic make payroll and cover expenses.
Senate Majority Leader Mitch McConnell said small businesses that have just been saddled with new sick leave mandates under the Families First bill will need some help as a result.
“Everyone agrees that workers need relief, but small businesses need relief as well,” he said, on the Senate floor Wednesday before the vote. “This is literally the worst time in living memory to pile even more burdens and costs onto small business, which are themselves fighting to stay alive, unless we back it up with major assistance.”
Reports indicate that Democrats have already signaled they’ll be looking to expand sick leave for workers in the next bill as well.