Imposing Costly New Mandates on Businesses Battling COVID-19 and Advancing Billions in New Spending with No Offsets

Description

The so-called Families First Coronavirus Response Act imposes serious threats to small businesses amid the disastrous economic shutdowns imposed in reaction to the Chinese coronavirus (COVID-19) outbreak. Specifically, the bill increases spending by $300 billion despite massive revenue shortfalls and imposes costly paid leave mandates. Under the bill, other public and private paid-leave policies are duplicated by forcing businesses with fewer than 500 workers to provide employees with 10 weeks’ pay at two-thirds of normal pay if they are attending to a family member due to the outbreak. An additional two weeks’ leave must be provided for “self-quarantining,” attending to an individual who is isolated, or attending to a child whose school or childcare provider has been closed. While employers are eventually reimbursed these costs, the bill’s refundable payroll tax credit approach does not provide timely relief to cash-strapped businesses. Furthermore, the bill includes no offsets to account for the massive new spending, which includes increases for unemployment, Medicaid and other government welfare programs. ACU recognizes that while certain improvements were made to the bill prior to passage, such as softening the impact on businesses with fewer than 50 workers, lawmakers failed to pass provisions similar to the Sen. Ron Johnson Amendment (R-WI, ACUF Lifetime 90%) which would have included critical reforms and removed the paid leave mandates. ACU encourages private employers to be sensitive to their employees’ needs, but we oppose government imposing new burdens on employers that may destroy some businesses and end employment for those most in need and opposed this bill. The Senate passed the bill on March 18, 2020 by a vote of 90-8 and the bill was signed into law.