Congress Passes COVID-19 Bill Mandating Employee Leave, Denies Public Entities Tax Relief; NACWA Member Advocacy Needed

(March 20, 2020) – As part of the ongoing federal response to COVID-19, the President yesterday signed into law the Families First Coronavirus Response Act (HR 6201).  This $100 billion law is considered “Phase 2” of the COVID-19 response.

HR 6201 creates new significant sick and family medical leave requirements for all government employers as well as certain private companies.  This includes as many as 12 weeks of job-protected leave for employees unable to work because they need to care for children whose school or daycare has been closed because of the coronavirus, including specified amounts of paid leave.

Likewise, employees unable to work due to quarantine or isolation orders, self-quarantine per a health care provider’s advice, or to get a diagnosis concerning or care for others impacted by coronavirus must receive up to 80 hours of paid sick leave. 

Although the legislation provides tax credits to impacted private employers to offset the costs of providing such leave, it expressly denies state and local government entities from receiving those credits.  And while the law does contain carve outs for “emergency responders,” it is currently unclear whether essential utility staff would be covered.  

Senate leaders and the White House are drafting another, third economic recovery bill now, “Phase 3.”  NACWA is working with a broad coalition of state and local government groups to urge that Congress provide much-needed financial relief to the state and local agencies on the front lines of keeping Americans safe during this critical time. 

We encourage all NACWA members to reach out to their Congressional delegations to make the following asks, which NACWA has coordinated with its allies:

  1. Congress must insert a provision striking Sections 7001(e)(4) and 7003(e)(4) from HR 6201, which deny government entities the tax relief afforded to private employers by the legislation; and
  2. Congress must clarify that state and local government employers, including those exempt from 26 USC 3111, fully qualify for both the section 7001 and 7003 credits.

The Senate is working furiously to draft Phase 3 and could finalize a package as soon as this weekend – in short, time is of the essence. NACWA is hearing that – despite the broad concerns around this issue – it will be an uphill battle to get these changes signed into law, so all voices are needed. 

Please contact Kristina Surfus, NACWA’s Managing Director of Government Affairs, with questions or for more information.