WHAT HAPPENED?
Shortly after midnight on Saturday, March 14, the House of Representatives passed H.R. 6201, the Families First Coronavirus Response Act. The Senate will soon debate the legislation, which the President has indicated he will sign. The bill was initially negotiated between the House leadership and the Administration.
WHAT’S IN THE BILL?
The bill contains some provisions that benefit small businesses and employees, namely expanded unemployment insurance and increased access to testing.
Unfortunately, some provisions are extremely challenging for franchise businesses.
Specifically, the bill as currently written requires employers with less than 500 employees to provide two weeks of paid sick leave and additional weeks of paid FMLA leave to quarantine or seek diagnosis or preventative care for coronavirus.
Large businesses with OVER 500 employees are exempt from the paid leave and paid family leave mandates. This exacerbates the problem on the businesses least able to afford these increases at a time when businesses are facing a sudden downturn in cash flow due to the Coronavirus.
While the bill includes a 100 percent retroactive tax credit, the construction of the paid leave mandate and refundable tax credit leaves small businesses with a significant and immediate cash flow crisis for the next six to eight critical weeks.
WHY ARE WE ASKING FOR CHANGES?
A refundable tax credit is a delayed benefit that does not address the burden of small businesses, which are continuing to pay employees and expenses such as rent, utilities, insurance, debt service, etc.
The tax credit structure will make it exceedingly difficult for employers to distance out organizational decisions as they negotiate loan restructures and other emergency measures to keep themselves afloat.
Effectively, this bill asks small businesses to front money to the federal government to ensure their employees’ leave, instead of the other way around.
WHAT ARE WE ASKING THE SENATE?
We strongly urge the U.S. Senate to improve this legislation.
IFA strongly urges the U.S. Senate to amend H.R. 6201 with by replacing the paid leave mandate and accompanying tax credit with an administratively managed program.
For the U.S. small business sector, an administratively managed mechanism will better ensure the liquidity of small businesses in this critical moment.
Critical improvements are needed to the legislation that will encourage and facilitate business to keep employees “on the books” and ensure continuation of employer provided benefits, especially health care benefits.
We appreciate the desire in Congress to take quick action to improve public health and limit economic harm caused by COVID-19. IFA and franchise business across the country stand ready to help the Senate improve this important legislation.
HOW DO I GET INVOLVED?
Join the Franchise Action Network at www.franchiseactionnetwork.com. From there, you’ll be able to send targeted emails on this issue to you Senator to urge him or her to support franchise-friendly changes to this legislation.
