The NCSL Blog

19

By Jon Jukuri and Michael Quillen

Congress passed and the president signed into law the second piece of COVID-19 relief legislation, the Families First Coronavirus Response Act. Congress has already set its sights on passing a third COVID-19 relief package.  

Treasury Secretary Steve Mnuchin, second from left, speaks with members of the media as he departs a meeting with Senate Republicans on an economic lifeline for Americans affected by the... moreTreasury Secretary Steve Mnuchin, second from left, speaks with members of the media as he departs a meeting with Senate Republicans on an economic lifeline for Americans affected by the coronavirus outbreak on Capitol Hill in Washington, March 16, 2020. Standing with Mnuchin is White House chief economic adviser Larry Kudlow, right. Patrick Semansky/APHR 6201 includes provisions that establish a paid sick leave program and expand the unemployment insurance program. The intent behind the paid sick leave program is to directly respond to the outbreak by providing leave for workers of businesses with 500 employees or less. The secretary of labor is permitted to issue regulations exempting businesses with fewer than 50 employees from the paid sick leave requirement on the basis it “would jeopardize the viability of the business as a going concern.”

Private-sector employers with 500 or fewer workers, state legislatures and government entities would now have to provide 12 weeks of job-protected leave (the two weeks being unpaid) under the Family and Medical Leave Act (FMLA) for employers who to have to:

  1. Comply with a requirement or recommendation to quarantine because of exposure to or symptoms of the virus.
  2. Provide care to a family member who’s complying with such a requirement/recommendation.
  3. Provide care for a child younger than 18 whose school or day care has closed because of the virus.

The bill also requires mandatory paid sick leave for employees of state and local governments who become ill from the coronavirus. It is important to note that states will be required to pay for paid leave for those state workers who contract the coronavirus. Therefore, this is an unfunded mandate for states, as there is no federal payment or reimbursement mechanism/tax credit to state government entities at this time.

An amendment was offered by Senator Ron Johnson (R-Wis.) during the floor session that would have eliminated the paid sick leave mandate for businesses and instead have created a Temporary Emergency Federal Unemployment Insurance Program in which states would be eligible for unemployment insurance benefits for individuals who cannot work due to the virus.

Benefits being paid to such employees would have been at the rate of two-thirds of an individual’s average weekly earnings or $1,000. Since the amendment would have eliminated the paid sick leave provisions, a new requirement would have been established to force the federal government to reimburse employers who employ fewer than 500 employees and who voluntarily provide paid leave to those individuals cannot work due to coronavirus in an amount equal to the unemployment benefits outlined within the amendment. The amendment was ultimately voted down along party lines 50-48.

As part of establishing a paid sick leave program, the bill establishes an employer tax credit that provides a refundable tax credit to employers who cover wages that are paid to employees while they are taking time off under the bill’s sick leave and family leave programs. The credits would be against an employers’ payroll and retirement tax payments. The sick leave credit for each employee would be for wages of as much as $511 per day while the employee is in quarantine. Furthermore, employees would be given $200 if they are caring for someone else who has been quarantined or their child’s school has been closed due to the virus.

The family leave credit for each employee would be for as much as $200 per day while also receiving paid leave, or an aggregate of $10,000.

Government entities, inclusive of state and local governments, cannot receive the credit as it only applies to private employers.

Unemployment Insurance

The bill would provide $1 billion for emergency transfers to states to pay for unemployment benefits. Each state would receive a proportional amount based on the share of federal unemployment insurance taxes paid by its employers.

States would receive half of their allocation within 60 days of the bill’s enactment if they certify that they meet certain requirements, such as ensuring that workers can apply for benefits online or by phone. Immediate funding of $500 million would be used for staffing, technology, systems and other administrative costs, so long as they meet basic requirements concerning access to earned benefits. 

States would receive the remaining $500 million if their unemployment claims increased by at least 10% over the same quarter in the previous year. They would have to waive certain eligibility rules for claimants and charges for employers affected by COVID-19.

States could modify certain unemployment policies, including rules related to job searches and initial payment waiting periods, on an emergency temporary basis to address the effects of COVID-19.

Eligible laid-off workers can receive regular unemployment benefits for as long as 26 weeks in most states. After exhausting those benefits, individuals in states with rising unemployment can qualify for an additional 13 weeks of benefits—or 20 weeks in some states—through the Extended Benefits (EB) program.

The bill would waive a state matching requirement and provide full federal funding for the EB program for the rest of 2020. To qualify, states would need to experience a 10% spike in unemployment claims over the past year and qualify for a full emergency funding transfer under the measure. Furthermore, the bill would waive interest payments that states owe for the remainder of 2020 on federal advances to their unemployment accounts.

Agency Response

The Department of Labor announced the agency was making available $100 million in national health emergency dislocated workers grants (DWG) to help combat and address workforce-related effects of the pandemic.

Supported by the Workforce Innovation and Opportunity Act of 2014, DWGs temporarily expand the service of capacity of dislocated worker programs at the state and local levels by providing funding assistance in response to large, unexpected economic events that inevitably cause significant job loss.

Eligible entities that apply for DWGs are states, outlying areas and Indian Tribal governments that are defined in the Stafford Act (42 U.S.C. 5122(6)). The Disaster Recovery DWG’s will provide entities with both disaster-relief and employment training activities. Participants of such grants include dislocated workers, workers who were laid off as a result of a disaster, self-employed individuals who are unemployed or underemployed as a result of the disaster, and long-term unemployed individuals.

On Wednesday, President Donald Trump signed the measure into law. Since the pandemic has been declared a national emergency, the benefits outlined in the bill are temporary and only stay into effect as long as the virus remains active. As stipulated within the bill, the mandate is effective until Dec. 31,  2020, which means benefits cannot carry over into the next year, 2021.

Jon Jukuri is federal affairs counsel and Michael Quillen is a policy associate in NCSL's State-Federal Relations Division. 

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About the NCSL Blog

This blog offers updates on the National Conference of State Legislatures' research and training, the latest on federalism and the state legislative institution, and posts about state legislators and legislative staff. The blog is edited by NCSL staff and written primarily by NCSL's experts on public policy and the state legislative institution.