Employers will no longer be required to offer two weeks of paid leave to workers who become sick with Covid-19, or up to 12 weeks of family leave to people who can't work due to child-care needs, per the legislative text of the $900 billion rescue package passed by Congress this week.
Extension of the paid leave mandate, first established in the March Families First Coronavirus Response Act, was blocked from the latest stimulus deal following opposition from Senate Majority Leader Mitch McConnell, R-Ky., BuzzFeed News reports.
FFCRA went into effect in April and provides two weeks of full pay to some workers who become sick with the coronavirus or are directed by a health authority to quarantine. It also provides two weeks of partially paid leave for an employee to care for a sick household member or a child while schools and day cares are closed. The act additionally provides an extra 10 weeks of partially paid family leave to care for a child while schools and care facilities are closed.
The offering is limited, however, and does not apply to companies with 500 or more workers — which employ over half of all workers — or small businesses with fewer than 50 people who can cite hardship as an exemption. Some health care providers and emergency responders are not eligible for the paid leave.
The FFCRA provisions are set to expire on Dec. 31 without a federal extension.
The latest stimulus bill doesn't extend the sick or family leave mandates, ending next week, which requires qualifying employers to provide paid leave to eligible employees. However, as written, the bill does continue a refundable tax credit to subsidize the cost to businesses if they provide paid leave until March 31, 2021. That means come Jan. 1, 2021, the federal government will continue to pay for employers to offer paid leave to workers, but it is up to employers to offer it in the first place.
The change could impact 87 million workers eligible for paid sick and family leave under the act.
Paid leave has slowed the spread of Covid-19, supported working parents
The U.S. is the only one among 22 wealthy nations in the world to not have a federal paid sick leave mandate, according to a data from The Center for Economic Policy and Research.
Some states, cities and employers offer their own forms of paid sick leave, but without a national standard, roughly 24% of U.S. civilian workers, or 33.6 million people, don't have the safety net, according to Pew Research Center.
Lower-income and part-time workers are less likely to have access to paid sick time, and are therefore more likely to have to choose between staying home if they're sick and earning a crucial paycheck to cover essential expenses.
But paying people to stay home can minimize the spread of illness. One October academic study found emergency sick leave pay helped flatten the curve in the U.S. and prevented as many as 15,000 cases of the virus per day. Additionally, it found that while the FFCRA was projected to cost $105 billion through the year, businesses had only claimed $1.3 billion in tax credits by the end of October.
For parents, a lack of paid family leave could have lasting consequences as continued surges of the virus shut down school and day care facilities this winter. At the start of the new school year, 73% of parents planned to make major changes to their professional lives to accommodate the lack of child care, according to an August Care.com survey of 1,000 parents with children under the age of 15. About 15% of those parents considered leaving the workforce altogether.
The paid leave policy has been a sticking point in months of Congressional negotiations to send financial relief to Americans during the pandemic.
According to BuzzFeed News, House Speaker Nancy Pelosi, D-Calif., delayed agreement on a deal on Saturday because the text did not include an extension of the paid leave mandate; by Sunday, she settled for the tax credit alone to be included.
President Donald Trump was expected to sign the bill into law quickly this week to avoid a government shutdown and expiration of crucial pandemic lifelines to millions of Americans. In a Tweet on Tuesday night, however, he called the Covid relief bill unsuitable and demanded Congress increase stimulus payments from $600 per person to $2,000 per person, among other changes in the aid deal.
Shortly after, Pelosi responded in agreement with his call for $2,000 direct payments. House Democrats, who hold a majority in the chamber, will seek to see if they can pass a measure for the increased payments by unanimous consent Thursday, Christmas Eve, according to a senior Democratic aide as reported by CNBC.