FederalHealthcareTaxes & SpendingHouse Coronavirus Bill Imposes New Federal Sick Leave Mandate on Small Businesses, Cost Remains Unknown

As the coronavirus panic unfurls throughout the country, the House rushed through a complex bill to fund testing and mandate paid sick leave on small businesses.
March 16, 2020
In the wee hours of Saturday morning, the House of Representatives passed a self-dubbed coronavirus relief bill. The bill, titled “Families First Coronavirus Response Act,” passed with bipartisan support after President Trump supported the measure

It passed by a vote of 363-40 and was chiefly negotiated by Speaker Nancy Pelosi (D-CA) and Treasury Secretary Steve Mnuchin.

Members were given the final text of the bill less than an hour before they were set to vote on it. Additionally, the members had no opportunity to debate or amend the bill.

Among those 40 no votes were six Texas Republicans: Reps. Brian Babin (R-TX-36), Michael Cloud (R-TX-27), Louie Gohmert (R-TX-01), Lance Gooden (R-TX-05), Chip Roy (R-TX-21), and Randy Weber (R-TX-14).

Other Texas Reps. Kenny Marchant (R-TX-24), Pete Olson (R-TX-22), and John Ratcliffe (R-TX-04) each registered as “Not Voting” in the tally.

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The bill contains numerous different provisions including:

  • $2.2 billion in federal coronavirus-related aid;
  • Instituting a national paid sick leave mandate for businesses below 500 employees; 
  • A refundable tax credit up to $511 per employee per day they are self-isolated;
  • Extending school lunch programs for students at schools closed due to the coronavirus outbreak; 
  • Suspension of work and job training requirements to receive food stamps; 
  • Spending $1 billion for unemployment insurance, while waiving work search requirements; 
  • Requiring all private health insurance plans to cover coronavirus “clinical diagnostic laboratory tests” — including additional costs such as emergency room visits — at “no-cost” to the consumer.

Cost-sharing requirements within Medicare Part B, Medicaid, and CHIP are also waived relating to coronavirus testing and the federal government will be required to match 100 percent of the costs.

The $2.2 billion in aid will finance coronavirus testing throughout the nation mostly through FY 2021 — with some extending through FY 2022. 

Provisions within this include $82 million to the Department of Defense; $64 million to Indian Health Services; $60 million to the Department of Veterans Affairs; and $1 billion in reimbursement for medical providers — all for coronavirus testing.

Dozens of other provisions are in the bill, including $500 million to the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC); an extension of Supplemental Nutrition Assistance Program (SNAP) benefits (food stamps) to students whose schools close longer than five consecutive days and who are on federal lunch programs; and $250 million for nutritional aid to elderly populations.

Relating to the paid sick leave provision, the bill implements 12 weeks of paid sick leave relating to the pandemic through the end of 2020 for businesses with fewer than 500 employees, effectively exempting large corporations from the impact of such a mandate. This provision amends the Family and Medical Leave Act of 1993 by eliminating the requirement for a public health emergency to be declared.

Incredibly, the new program did not go through a committee process or review as is customary for such significant statutory changes.

This provision kicks in when an employee is told they should stay home by a medical professional, when schools or daycares are impacted due to the pandemic, or employees’ jobs cannot be completed remotely. The first 14 days of the mandated leave may be counted as unpaid, but from then on the employer must compensate the employee with at least two-thirds of their regular pay for up to three months.

Another paid sick leave provision in the bill requires private businesses with fewer than 500 employees to provide 112 hours of paid sick leave for full-time employees and the 2-week average for part-time employees related to coronavirus sickness. It cannot be carried over year to year and it has a sunset provision of one year after enactment.

Employers are specifically prohibited from firing employees as soon as they utilize this provision.

Companies below 50 employees can be exempted by the Department of Labor (DOL) through a hardship waiver process and are eligible for reimbursement. It remains unknown how long such an exemption process will take and what criteria will be used to determine if a business is granted an exemption or reimbursement.

Some conservatives are worried this will lead to companies just above that 50-employee threshold–or below–preemptively laying off employees should this provision survive the Senate version. 

Rep. Roy critiqued it, saying, “In short, it does no good to mandate “paid leave” from a job that doesn’t exist because the business went under.” Roy went on to advocate for an “expansive and immediate” small business loan program to help those businesses who might be at risk from the sick leave mandate. 

Rep. Cloud added, “Although some provisions were things I would support, others were harmful, including new burdens on small businesses while large businesses were exempt. The bill language left too many questions unanswered with no opportunity to debate, amend, or even ask questions.”

Paul Winfree, director of the Heritage Foundation’s Roe Institute for Economic Policy Studies, stipulated that while the bill passes muster for him, “[W]e remain concerned that the mandates on American businesses included in this deal will have significant and prolonged consequences for the economy. While the outbreak unfolds, Congress must focus on prioritizing the needs of American families over scoring political points for bailouts and special interest favors.”

If the economic downturn continues, it could cause employees not on sick leave to be laid-off as revenues shrink and those not working are legally protected by the federal law.

This leave time may be substituted by accrued vacation or similar time voluntarily by the employee, but the employer is prohibited from requiring the employee to do this.

Rep. Chip Roy — who voted for the $7.8 billion emergency funding earlier this month — has since been very outspoken on his opposition to the bill. 

“Despite being well-intentioned, [the bill] puts onerous burdens and mandates on main street employers, while picking winners and losers by carving out big business! These burdens will lead to job losses and undermine the very thing we need for growth right now – freeing up capital for small businesses so they can bridge the gap through coronavirus and support their employees and communities through these difficult times.”

“Finally, Congressional leadership on both sides of the aisle admit they don’t know how much this bill will cost. Today, the President unleashed upwards of $50 billion in funds through a national emergency declaration. Furthermore, last week, Congress passed an $8.3 billion relief package, which I supported despite not having time to fully vet the bill (just like this measure). Now, this bill will cost perhaps tens, if not hundreds, of billions of dollars more. The truth is no one really knows,” he continued.

Roy concluded, “Our job in Congress when presented with legislation is to read, debate, amend, and vote – yet we were only provided the opportunity to vote. I voted no because this bill will cause more harm for more Americans than the good it purports to offer.”

Congresswoman Veronica Escobar (D-16-TX), who voted for the measure, stated, “As El Pasoans learn about the first presumptive positive case of coronavirus, I’m putting families first by supporting critical legislation that appropriates funds to ensure free coronavirus testing for every El Pasoan who needs a test, including the uninsured, and protects the economic and food security of workers and their families. The health and safety of El Pasoans is my top priority and I will continue to legislate to protect their well-being in the face of the coronavirus pandemic.”

Rep. Lance Gooden stated about his “No” vote, “I promised to thoughtfully represent my constituents and voted NO after being given only a few minutes to read a bill at midnight. The Senate had already left town and there was no necessary rush to pass this bill without debate or amendment opportunities at 1 am on a Saturday. I continue to do all I can to work with the President and my colleagues as we tackle this crisis.”

He queried, “Is it any wonder our country seems underprepared when our legislative body operates so dysfunctionally?”

Rep. Van Taylor (R-TX-03) stated his support for the bill: “This bicameral legislation exemplifies bipartisan efforts to address this public emergency head-on. This bill expands access to testing and helps working Americans who may be ill, quarantined, or caring for a loved one make ends meet. Increased flexibility from this legislation will provide low-income children access to food if school districts close and increases telehealth services, helping to alleviate stress on hospitals and healthcare facilities.”

There is no fiscal note for this bill yet, so the total cost of the legislation isn’t known despite House lawmakers having already voted for it. The costs associated with the bill are disaster-designated, meaning they technically do not count towards the caps set by the Budget Control Act of 2011 — which were raised this past July.

President Trump and Governor Greg Abbott each declared states of emergency on Friday.

The Senate will take up the bill this week presuming technical changes are made.


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Brad Johnson

Brad Johnson is a senior reporter for The Texan and an Ohio native who graduated from the University of Cincinnati in 2017. He is an avid sports fan who most enjoys watching his favorite teams continue their title drought throughout his cognizant lifetime. In his free time, you may find Brad quoting Monty Python productions and trying to calculate the airspeed velocity of an unladen swallow.