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Big Business Covid-19 Paid Leave Exemption May Get Another Look

March 31, 2020, 8:21 PM

The debate over who has to pay for new sick and family leave for workers impacted by the coronavirus is being revived as lawmakers and the Trump administration prepare to hash out the next phase of pandemic-relief legislation.

New federal laws generally require companies to pay up to 10 weeks of partially paid family and medical leave to workers who need to care for a child in the event of school closures. Workers also can receive up to two weeks of sick leave if they test positive for Covid-19, are subject to quarantine, or are caring for someone in similar circumstances. The law exempts companies with 500 or more employees, however, and limits family-leave requirements for small businesses.

“We want to eliminate exemptions for employers,” including for large and small businesses as well as health-care providers and emergency responders, House Education and Labor Committee Chairman Rep. Bobby Scott (D-Va.) said on a call with reporters Monday.

Business groups, like the U.S. Chamber of Commerce, lobbied Congress not to adopt Democrats’ original plans for expansive “one-size-fits-all” mandates, as Republicans referred to it. GOP lawmakers and the Trump administration initially wanted nonbinding paid-leave recommendations for companies, but acquiesced to a Democratic demand that the government force many employers to provide emergency-leave benefits for workers.

Democrats and paid-leave advocates, including the National Partnership for Women and Families, still want to fill what they see as gaping holes for millions of workers who are not eligible for new benefits that could allow them to keep their jobs during the coronavirus-induced economic tailspin.

That’s despite a clear message from businesses and Republicans that the paid-leave debate has been resolved.

“Relitigating” the leave provisions is a non-starter for GOP lawmakers, a Republican Ways and Means Committee staffer told Bloomberg Law under the condition of anonymity to speak freely.

Talk of a fourth Covid-19 relief bill comes just days after President Donald Trump signed the record $2 trillion CARES Act (Public Law 116-136) into law. Members of Congress, agency officials, and industries are already lining up wish-list items that were left out of the three prior bills or that they believe were not properly addressed.

“Unfortunately, the White House and Congressional Republicans have blocked or watered down key provisions—including emergency paid sick leave and family and medical leave—that would help workers stay connected to the workforce,” a Democratic House Education and Labor Committee aide said in a statement. “As the unprecedented scale and duration of this crisis [becomes] clear, so does the reality that we need to do more to support workers across the country. We hope our Republican colleagues will join us in that effort.”

Push, Pull

Democrats pushed for more expansive paid-leave requirements in earlier relief legislation, including the Families First Coronavirus Response Act (Public Law 116-127). They backed away from some of those positions in negotiations to avoid a stalemate and get legislation moving quickly to address the developing economic crisis, the Education and Labor aide told Bloomberg Law.

Treasury Secretary Steven Mnuchin and Republicans argued that the government shouldn’t mandate that large companies provide leave because many big businesses already offer that benefit to their workers, a source familiar with negotiations said. They didn’t want to reimburse large employers through a new tax credit for providing that benefit, opting instead to exempt employers with more than 500 workers to “conserve resources,” the source said.

House Speaker Nancy Pelosi said Monday the next coronavirus relief bill will focus on “recovery.” She said she doesn’t expect an agreement to be reached on the legislation until after April 20, when both the House and Senate are set to return. Pelosi vowed the next package would do more to protect workers and help states.

Lawmakers are facing less of a time crunch over a fourth bill than they were earlier, when they had to act swiftly to respond to the economic emergency wrought by the coronavirus pandemic. It remains to be seen whether Democrats, who want more investments in worker safety and leave protections, and Republicans, who want to continue to implement policies like loan assistance that help businesses stay open, may be willing to dig in their heels this time.

Early indications from Pelosi and Trump show there may be room for agreement over infrastructure investment. Pelosi spoke early Tuesday on the need to include infrastructure money in the next bill, while Trump tweeted that he wants $2 trillion to go toward infrastructure.

The Treasury Department declined to comment.

Late Exemptions

House Minority Leader Kevin McCarthy (R-Calif.), ranking member of the House Ways and Means Committee Kevin Brady (R-Texas), and Mnuchin engaged in frequent conversations about how to deal with paid leave when lawmakers negotiated the first three coronavirus bills.

The trio believed a one-size-fits-all mandate at a time when businesses are facing cash flow issues wouldn’t work, the Republican staffer said. They wanted to create something temporarily responsive to the moment.

House Democrats’ relief proposal would’ve established a broad national paid sick-leave program requiring employers to allow workers to accrue as much as seven days of paid sick leave annually for any illness. It also would’ve created an emergency paid-leave program to directly respond to the coronavirus and future public health emergencies.

That proposal also relied on implementing a paid leave program via the Social Security Agency. Mnuchin and congressional Republicans said the agency wasn’t prepared to create a new system in the short time span that was necessary.

The Chamber of Commerce and the National Federation of Independent Business pressed lawmakers early to reject Democrats’ intial, expansive paid-leave mandate. Small business groups, like NFIB, strongly opposed any new legal requirements, the source familiar with negotiations said.

Republicans will push back against any “broad brush” mandate for businesses, the GOP staffer said, adding: “The nature of a compromise is you hold onto it.”

To contact the reporter on this story: Jaclyn Diaz in Washington at jdiaz@bloomberglaw.com

To contact the editors responsible for this story: Chris Opfer at copfer@bloomberglaw.com; John Lauinger at jlauinger@bloomberglaw.com

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