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GOP Virus Plan Backstops Businesses, Boosts Child-Care Aid

July 27, 2020, 11:55 PM

Senate Republicans’ opening bid in the next round of stimulus negotiations would shield employers from virus-related lawsuits from workers and invest $15 billion to help child-care providers stay afloat.

The Senate majority’s long-awaited response to House Democrats’ $3.5 trillion HEROES Act passed in mid-May was rolled out Monday evening as individual pieces of legislation, including measures authored by Sens. Lamar Alexander (Tenn.), John Cornyn (Texas), Richard Shelby (Ala.), and Chuck Grassley (Iowa).

Much attention in the coming high-stakes negotiations will land on Senate Republicans’ marquee proposal to temporarily lower expanded unemployment benefits and then shift states to a wage-replacement model. But the package includes a sizable labor and employment component apart from unemployment insurance that could influence the talks and have far-reaching effects for employers and workers.

The Senate GOP blueprint also omits some labor and employment provisions—particularly in workplace safety and paid leave—which could reverberate at the bargaining table.

Businesses Protected

One of the component bills, Cornyn’s SAFE TO WORK Act, would give employers protection from lawsuits stemming from workplace coronavirus testing—a central demand of the business lobby. Senate Majority Leader Mitch McConnell (R-Ky.) has described liability protections for businesses as a must-have in a final package, but Democrats call it a non-starter.

The proposed liability shield would cover claims from Dec. 1, 2019 until Oct. 1, 2024. The bill clarifies that when a business provides training, personal protective equipment, or other assistance to an independent contractor or a franchisee’s employee, those actions can’t be used as evidence of an employer-employee relationship.

The proposal also would place a cap on damage awards. Compensatory damages would be limited to the economic losses incurred as a result of the injury, as long as the harm wasn’t a result of “willful misconduct,” according to the bill text.

The employer shield would supersede any local statute or regulation related to personal injury lawsuits stemming from coronavirus exposure, but it wouldn’t preempt broader local liability reforms or workers’ compensation systems.

Businesses also wouldn’t be liable for claims related to violations of the Worker Adjustment and Retraining Notification Act, as long as the job loss took place during the pandemic. The federal law requires companies to give workers at least 60 days’ notice before plant closures or mass layoffs lasting more than six months.

Democrats want to force the Labor Department to require companies to take specific steps to protect workers who must report to a work-site during the public health emergency. Republicans blocked Democrats’ attempts to add language to that effect to prior virus-relief legislation.

The GOP package said the Occupational Safety and Health Administration won’t cite an employer that has been “relying on and generally following” government standards and guidance. OSHA has already instructed its inspectors that employers who are following guidance from the agency or the Centers for Disease Control and Prevention won’t be cited under the Occupational Safety and Health Act’s general duty clause.

Appropriations and Child Care

Under the Grassley proposal, businesses would get a refundable payroll tax credit equal to 50% of the employer’s total expenditure on workplace virus testing or other costs associated with implementing stronger health and safety measures.

The legislation authored by Shelby, who chairs the Senate Appropriations Committee, calls for $306 billion in emergency appropriations for federal agencies to respond to the coronavirus. It would provide $2.5 billion to the DOL, including $1.15 billion to assist state unemployment insurance operations as well as $500 million for grants to help workers find new employment.

Democrats’ plan would establish a $200 billion fund to ensure hazard pay for essential workers, along with providing $2 billion to support worker training and more than $900 million to assist states in unemployment insurance processing.

The GOP package would give child-care providers $15 billion in emergency assistance, double the amount Democrats have offered. Closures of child-care centers are a major factor impacting businesses’ return-to-work planning, a problem that could become more acute if schools reopen this fall.

The money provided by the Shelby bill would go toward the existing Child Care and Development Block Grant program, which allows states to disseminate federal funds as needed.

Democrats are in the process of updating their negotiating position on child-care aid. Two House bills set for a vote this week, the Child Care Is Essential Act (H.R. 7027) and the Child Care for Economic Recovery Act (H.R. 7327), would give providers access to $50 billion in aid, and the child- and dependent-care tax credit would be made refundable, among other provisions.

—With assistance from Bruce Rolfsen.

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

To contact the editors responsible for this story: John Lauinger at jlauinger@bloomberglaw.com; Martha Mueller Neff at mmuellerneff@bloomberglaw.com

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