President Trump signed legislation that requires employers to provide paid sick leave and expand the scope of the Family Medical Leave Act during the COVID-19 pandemic, drawing split reactions from business leaders.
Under the recently passed “Families First Coronavirus Response Act,” both part-time and full-time workers at private companies with fewer than 500 employees are entitled to paid sick leave if they are subject to an order of isolation by the government or a health care provider, or if the worker shows symptoms of the coronavirus.
The law extends to workers caring for a child whose school or child care facility was closed by the pandemic.
The law expires on Dec. 31, unless lawmakers pass a bill for its extension.
The act excludes health care providers and emergency responders and gives the U.S. Department of Labor the authority to issue an exemption for small businesses with fewer than 50 employees.
The “Families First Coronavirus Response Act” treats a business’ failure to provide paid leave as a minimum wage violation under the Fair Labor Standards Act and includes anti-retaliation provisions, according to Lancaster-based law firm Barley Snyder. Employers required to provide sick leave under the new act would be provided with refundable payroll tax credits.
Business advocacy groups are split on the measure, with some saying the act will impose financial burdens on small businesses already struggling to stay open. Meanwhile, others groups, including the Washington, D.C.-based Small Business For Paid Leave, say the law is a critical first step to making “paid sick days and longer time to care through paid leave” a “foundation in our economy.”
Melissa Bova, vice president of government affairs for the Pennsylvania Restaurant and Lodging Association, said the act was well-intended and may help some members of the trade group that can stomach the costs, while other businesses will likely have to dip into funds that would have been saved to provide financial solvency during uncertain economic times.
“I think it has good and meaningful intentions, but some of our members would be required to front the payment,” Bova told the Central Penn Business Journal. “We don’t know if they have any cash flow to pay that out.”
More than 100 industry trade groups co-signed a letter protesting the act, arguing it will impose harsh standards on small businesses at a time when many are in financial peril.
“We fear that these mandates will accelerate small and medium business closures, causing many Americans to lose employer-provided health benefits while straining the administrative and financial resources of state unemployment agencies,” the letter states.