Washington has passed the first coronavirus relief act, and there will surely be more to come. This first package provides for free coronavirus testing (when tests become available!), $1 billion for food assistance programs (including language prohibiting the White House from imposing the tougher work requirements for Food Stamps they had planned to roll out on April 1st, and another billion in emergency grants to states to help with processing and paying unemployment grants.
The package includes one more provision directly affecting business owners. Specifically, you have to give your employees up to two weeks of sick leave and three months of paid family and medical leave at no less than two-thirds of their pay. The benefit extends to employees of businesses with under 500 employees who are infected with coronavirus, quarantined, have a sick family member, or are affected by school closings.
At first glance, that sounds like a profoundly expensive mandate. But the act provides tax credits for employers to offset the cost of the new obligation. It expires in a year. And the Department of Labor can exempt businesses with fewer than 50 employees if it determines that providing benefits would “jeopardize the viability of the business as a going concern.”
The real challenge, though – assuming you’re subject to the mandate – will be managing your cash flow to accommodate any sick leave you have to pay. It’s one thing for Washington to say “we’ll give you tax credits to pay you back for any new benefit.” But tax credits don’t materialize in your bank account overnight. It’s another thing to ask you to pay for the new benefit today and wait to be reimbursed months or a year down the road.
Washington is already scrambling to provide broader help, including potential “helicopter cash” in the form of periodic checks to all Americans. We’ll be sure to keep a very close eye on all those developments in order to help you through the crisis.