March 18, 2020
BREAKING TAX NEWS | Senate approves second coronavirus bill, sends to President
The Senate on March 18 approved by a 90-8 vote the Families First Coronavirus Response Act (H.R. 6201) to provide affected individuals with paid sick and family leave and create tax credits for affected employers, expand food and nutrition services, allow for emergency state unemployment insurance grants, and increase Medicaid funding to states, among other things. The House approved the measure March 14 and corrections to the bill on March 16, meaning the Senate’s action sends the bill to President Trump for his signature.
Senate passage was delayed because Senator Rand Paul (R-KY) wanted an amendment to be considered, and the chamber entered into an agreement for amendment votes prior to final passage. Three amendments were defeated during today’s session:
- Senator Paul's amendment to offset the cost of the bill by ending U.S. military involvement in Afghanistan, by a vote of 3-95;
- Senator Ron Johnson's (R-WI) amendment to replace federally mandated sick pay and paid family leave and replace it with financial support provided through State administered unemployment insurance systems and funds, by a vote of 50-48 (60 votes were need); and
- Senator Patty Murray's (D-WA) amendment to expand paid sick time and paid leave provisions, by a vote of 47-51.
Highlights of the bill include:
- Emergency paid sick leave: Private sector employers with fewer than 500 workers and all public sector employers would have to provide paid sick leave of 2 weeks for full-time employees and average hours for a two-week period for part-time employees due to an isolation or quarantine order or advisory, or experiencing symptoms; or caring for a family member or for a child whose school or place of care is closed due to a public emergency. Capped at $511 per day and $5,110 in the aggregate for those on leave because of their own health issue, $200 per day and $2,000 in the aggregate to care for others. DoL has authority to issue regulations to exempt small businesses with fewer than 50 employees.
- Emergency family and medical leave: Private sector employers with fewer than 500 workers and government entities would have to provide as many as 12 weeks of job-protected leave to employees to care for a child whose school or place of care is closed. The first 10 days could be unpaid, although a worker could choose to use other accrued leave. Employers would be required to pay employees two-thirds of their wages, not to exceed $200 per day and $10,000 in the aggregate. The Labor Department is authorized to issue regulations to exclude certain health care providers and exempt small businesses with fewer than 50 employees.
- Tax credits for paid sick and family and medical leave: Employers would receive a 100% refundable payroll tax credit on the wages required to be paid under such leave and additional health benefit contributions. Also, any additional wages paid due to the leave requirement would not be subject to the employer portion of the payroll tax.
- Unemployment insurance: Provide as much as $1 billion for emergency transfers to states in fiscal 2020 to process and pay unemployment benefits. Individuals in states with rising unemployment can qualify for an additional 13 weeks (20 in some states) for unemployment benefits.
- Increase in Medicaid funding: Provides states with a 6.2% Medicaid FMAP increase for all medical services for the duration of the public health emergency
- Other provisions: Food and nutrition assistance, funding for free testing