Phase II Coronavirus Package // Small Businesses

March 18, 2020

My small business can’t afford to pay sick leave.

H.R. 6201— the second Coronavirus bill, includes a refundable payroll tax credit to reimburse—dollar-for-dollar—local businesses for paid sick leave and family and medical leave wages paid to employees that are affected by COVID-19. Click here for an explanation of who is eligible and for what amounts.

The leave is fully funded by the tax credit, but my small business will be interrupted by cash flow issues.

H.R. 6201 provides significant relief to businesses that otherwise may not be able to afford the employee costs associated with coronavirus-related paid leave.  Treasury has broad regulatory authority to advance funds to employers to protect businesses concerned about cash flow.  In a March 14thpress release, Treasury stated that “employers will be able to use cash deposited with the IRS to pay sick leave wages.  Additionally, for businesses that would not have sufficient taxes to draw from, Treasury will use its regulatory authority to make advances to small businesses to cover such costs.”

The legislation exempts businesses with more than 500 employees from mandated paid leave while imposing the requirement on small- and medium-sized job creators.

The benefits under H.R. 6201 are not an expense for the business, rather it operates as a benefit to both the worker and the employer.  The legislation will ensure that every dollar of leave that an employer is required to pay is reimbursed—dollar-for-dollar—by the federal government.  It will allow workers to care for themselves and loved ones impacted by coronavirus.  Additionally, the credit will help businesses to stay up and running.  After all, workers who knowingly show up sick jeopardize the health of coworkers and business operations.

Nearly 90% of businesses with more than 500 employees offer paid sick leave to their full-time workers.  To facilitate more universal coverage of paid sick leave, H.R. 6201 provides temporary federal coverage for paid sick and family leave to all employers with fewer than 500 employees.

Does the bill mandate an unaffordable extension of FMLA on my small business?

H.R. 6201, permits the Secretary of Labor to exempt businesses with fewer than 50 employees from the longer-term mandate where it creates significant hardship.

CLICK HERE to download a pdf of the above chart.