Employee Benefits and Compensation

Trump Signs Virus Relief Bill With Paid Sick Leave

Employers will have to front the costs of paid leave but will be fully reimbursed through refundable credits that count against payroll tax.
Matthew HellerMarch 19, 2020

President Donald Trump has signed a coronavirus relief bill including paid leave benefits and credits that count against employers’ payroll tax to offset the cost.

The Families First Coronavirus Response Act, which the congressional Joint Committee on Taxation estimates will cost $104 billion, went to the president’s desk on Wednesday after the Senate passed it on a 90-8 vote.

The measure “makes emergency supplemental appropriations and other changes to law to help the nation respond to the coronavirus outbreak,” Trump said.

Under the bill, businesses with fewer than 500 employees are required to provide employees with two weeks of sick leave paid at their the regular pay rate or at no less than two-thirds the regular rate depending on whether the employee needs to take care of their own health or a family member’s.

Employers will have to front the costs but will be fully reimbursed by the federal government within three months through refundable tax credits that count against employers’ payroll tax.

Companies with fewer than 50 employees are eligible for a waiver if the paid sick leave would jeopardize business viability. That category would cover employers of about 12 million private sector workers.

Paid Leave for All Director Dawn Huckelbridge was disappointed more workers won’t be eligible for paid leave but still saw it as a positive first step toward more inclusive legislation.

“We do know that this bill does leave out millions but it does still cover millions,” she told Time. “And every day that workers aren’t able to stay home, we’re losing time and we’re losing lives.”

As The Hill reports, the bill sparked fierce opposition from some Senate Republicans, who were concerned in particular that the paid sick leave provisions would hurt small businesses. But Majority Leader Mitch McConnell stood behind it.

“This is a time for urgent bipartisan action and, in this case, I do not believe we should let perfection be the enemy of something that will help even a subset of workers,” he said.

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