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Paid Leave/Unemployment Insurance Provisions in Democrats’ Recipe for a Prolonged Recession

May 12, 2020

Speaker Pelosi introduced her partisan coronavirus recovery bill, or “Phase 4,” without once consulting with Republicans. In fact, many of its provisions include policies that have been soundly rejected by Republicans in the past. Here’s what’s in the bill.

Worker and Family Support Provisions 

It Doesn’t Continue Unemployment Insurance—It Ensures Unemployment Continues

  • Doubles down on paying individuals more not to work.
  • Forces local businesses to compete with unemployment benefits for workers through spring of 2021.
  • Extends $600/week supplement through Jan. 31, 2021, plus transition to allow the supplement to continue through March 31, 2021 for those who have not exhausted their weeks of benefits.

Forces Every Employer—No Matter What—to Provide Paid Leave for Another Full Year, and Leaves Some Employers with an Unfunded Mandate

In order to slow the spread of coronavirus to prevent the crash of our health care system, Congress mandated paid leave as part of the Phase 2 Families First Corona Response Act (FFRCA). It was only supposed to last until the end of December this year and employers are fully reimbursed.

  • FFRCA’s paid leave mandate struck a balance.
    • It applied to employers with fewer than 500 employees: Larger employers already had paid leave arrangements with employees.
    • The mandate was coupled with relief to offset costs: A tax credit of 100% of wages paid.
    • Employers with fewer than 50 employees could receive an exemption for undue hardship.
  • Democrats are calling to kill that balance.
    • Overreach: This bill expands the mandate to ALL employers.
    • No Relief: Only provides tax credit reimbursement for employers with less than 500 employees, and removes the small business exemption.
    • Too Much Time: Extends and expands the Families First Corona Response Act (FFRCA) paid sick and paid family and medical leave mandate on employers through the end of 2021.

Jumpstarting the economy will require transitioning away from inflated, one-size-fits-all “stay-at-home” unemployment benefits in the CARES Act, which in some cases exceed a worker’s paycheck. Families shouldn’t lose money for choosing to work.

Want to read more on the fight against Coronavirus? Read our Coronavirus Bulletin here which contains our extensive FAQ about recent federal actions.

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