A funny thing happened to H.R. 6201 on its way to the Senate. After the House passed the Families First Coronavirus Response Act early in the morning of March 14, it approved a few “technical corrections” to the bill late March 16. Among the changes are two sets of provisions that significantly reduce coronavirus-related sick and family paid leave available in the original version.
Dollar Caps on Paid Leave
The March 14 version of H.R. 6201 included dollar caps on tax credits for paid leave but not for the paid leave itself. This meant that paid leave to higher-wage employees would only be partially compensated by the tax credits. The March 16 version eliminates the difference between the amounts of paid leave and the amounts of paid leave credit, not by increasing credits but by limiting paid leave.
Under both versions of the bill, employers with fewer than 500 employees would be required to provide paid sick leave for two weeks in amounts equal to either 100 percent or two-thirds the level of regular pay, depending on which employee attributes triggered qualification for the sick leave. Similarly, those employers would be required to provide qualifying employees paid family leave for an additional 10 weeks at two-thirds their normal pay. The March 14 version of H.R. 6201 had no limits on the amounts of employee paid leave.
The revised version adds limits on paid leave. So sick leave pay equal to 100 percent of regular pay is limited to $511 per day per employee (aligning it with the $511 limit on the corresponding paid leave credit). Other sick leave pay, equal to two-thirds of regular pay, as well as all family leave pay, is limited to $200 per day per employee (aligning it with the $200 limit on the corresponding paid leave credits).
The table shows calculations of the maximum amount of sick and family pay for a qualifying employee with annual wages of $150,000. Under the March 14 version of the bill, this employee could have been entitled to $577 of sick pay (for 10 days) and $385 of family pay (for each working day of the following 10 weeks). Under the revised version, those daily amounts are limited to $511 and $200, respectively. Those amounts are equal to the amount of tax credits available to the employer, so the employer is entirely compensated for providing paid sick and family leave.
| Sick Leave | Sick Leave | Family Leave |
|---|---|---|---|
First Possibility: Leave for "Self-Care" | Second Possibility: Leave for "Family Care" | Either Self-Care or Family Care | |
Employee Characteristics: | |||
Annual pay | $150,000 | $150,000 | $150,000 |
Weekly pay (52 weeks) | $2,885 | $2,885 | $2,885 |
Daily pay | $577 | $577 | $577 |
Nontax Portions of H.R. 6201: | |||
Leave pay fraction (minimum) | 100% | 66.7% | 66.7% |
Leave pay (daily) before cap | $576.9 | $384.6 | $384.6 |
Cap on paid leave added in March 16 version | $511 | $200 | $200 |
Leave pay (daily) with cap | $511 | $200 | $200 |
Total possible weeks | 2 | 2 | 10 |
Tax Credits: | |||
Tax credit rate | 100% | 100% | 100% |
Daily credit (wage) cap in H.R. 6201 | $511 | $200 | $200 |
Tax credit (daily) | $511 | $200 | $200 |
Total possible credit | $5,110 | $2,000 | $10,000 |
Limits apply? | limited | limited | limited |
Unsubsidized required pay (daily) | $0 | $0 | $0 |
A spreadsheet for these calculations is available.
Reducing the Scope of Family Leave
The March 14 House bill provided that paid family leave (for weeks three through 12, after two weeks of sick leave were exhausted) could be used for a wide variety of coronavirus-related problems. These included (1) adhering to a requirement or recommendation to quarantine because of exposure to or symptoms of the coronavirus; (2) caring for an at-risk family member who is adhering to a requirement or recommendation to quarantine because of exposure to or symptoms of the coronavirus; and (3) caring for a child if the child’s school or place of care has been closed, or the child care provider is unavailable, because of the coronavirus.
The revised bill dramatically scales back qualifying uses of family leave. Under the version sent to the Senate, paid family leave is available to care for a child under 18 years of age only if the school is closed or day care is unavailable because of a public health emergency.
Senate Action
The legislation expires December 31, 2020. There is no publicly available official revenue estimate of the first House-passed version. The revised version, the starting point for Senate deliberations, is estimated by the Joint Committee on Taxation to reduce federal tax revenues by $104.6 billion over 10 years. Although there is a pressing need for Congress to consider a more broad-based fiscal stimulus package soon, this complex legislation could stall on the floor of the Senate as members there contemplate all its implications.