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Vermont lawmakers are concerned that a paid leave provision in a recently passed federal stimulus package doesn’t do enough to help businesses survive the coronavirus crisis.
A bill passed by Congress this week gives employees the option for paid medical and family leave associated with COVID-19, and will reimburse employers for the wages they pay as a tax credit. But for some Vermont businesses, lawmakers told representatives from the congressional delegation on a Joint Legislative Rules Committee conference call Thursday, that may be too late.
“The businesses around me are just absolutely desperate,” Sen. Joe Benning, R-Caledonia, said. “This is a critical flaw in this bill.”
The congressional package will give workers two weeks of paid leave if they are sick, quarantined or seeking care for the virus, or if they are taking care of an ill family member. People can get 12 weeks of paid leave if they are caring for a child whose child care facility or school is closed.
The federal legislation, which President Trump signed Wednesday, would reimburse employers in the form of a tax credit when they file their payroll tax within three months.
But, lawmakers said, a tax credit is not much help if businesses don’t survive.
Benning said that foot traffic has totally dropped off at many Northeast Kingdom businesses, which are struggling to survive as the coronavirus outbreak has kept people in their homes. For employers to continue paying workers, he told a member of Rep. Peter Welch’s staff, the lack of cash flow is a big problem.
“I guess I’m going to spell that out as a major concern and hope that the congressman thinks quite seriously about trying to force employers to be paying anything right now when they won’t have the support from the federal government for several months down the road,” Benning said.
Rebecca Ellis, of Welch’s office, said the congressman agrees that is a flaw in the package.
“We’ve also been hearing from a lot of businesses that have been calling our office directly or emailing us and saying that cash flow is an insurmountable problem for them right now,” Ellis said.
John Tracy, state director for Sen. Patrick Leahy, D-Vt., said senators are aware of the crunch on small businesses as well. Senate Majority Leader Mitch McConnell, R-Ky., and Sen. Marco Rubio, R-Fla., are working on a provision in new legislation that would offer loans to small businesses to cover things like payroll, according to Tracy, who said there are other discussions ongoing.
Sen. Becca Balint, D-Windham, asked about how eligibility is determined for the leave programs, which delegation staffers said still needs to be worked out.
The package specifically aims to serve smaller companies; those with more than 500 people are excluded.
There is also an option for the Department of Labor to exempt small businesses if the pressures from the leave program would force them out of business.
Asked about the options for nonprofits, Ellis said they will be able to take advantage of the paid leave program through their payroll tax, though that would also be a delayed payment. Tracy said they are also researching reimbursement options through the Federal Emergency Management Agency.
Morgan Nichols, of Vermont Main Street Alliance, said that cash flow is one of the biggest concerns for the organization’s members.
“Their biggest concern is how they are going to continue to pay their bills that are coming in despite the fact that their businesses are in some cases forced to be closed,” she said.
Congress is expecting to pass more aid packages related to the coronavirus, and staffers said that relief for businesses is one of the things they aim to address.
The federal stimulus bills already passed also include a temporary increase in the rate that the federal government pays into state Medicaid programs. It also allows states to expand Medicaid to cover coronavirus testing for uninsured people.
