Charlie is an attorney in the Labor & Employment Department, focusing his practice on representing management in all aspects of labor and employment law. Charlie views his clients as his partners and,...Read More by Author
Transition Update: A Look at President Biden’s Plans for Sick Pay and Minimum Wage
Newly inaugurated President Joe Biden recently outlined his plans to hit the ground running in his first 100 days in office, including a $1.9 trillion spending bill that he hopes the Democrat-controlled Congress will pass quickly. Included in that proposed spending bill are two items in particular that employers should pay attention to and that have been the topic of recent HR Legalist coverage: a minimum wage increase, and extension of paid leave under the Families First Coronavirus Response Act (“FFCRA”).
As recently noted here, the new year brought with it an increase to several states’ minimum wage, including California, Connecticut, Florida, Illinois, Maryland, Massachusetts, New Jersey, New York, and Virginia, with the end goal being an eventual $15 per hour minimum wage. As the various states take differing paths to arrive at the desired $15 per hour minimum, the lack of uniformity can be somewhat of a headache for national employers. The Biden Administration seeks to put the U.S. on track for an eventual nationwide $15 per hour minimum wage, though the specific timeframe and mechanisms for doing so remain unclear.
Various Republican members of Congress have criticized the proposal, indicating that it would shutter small businesses already reeling from the effects of COVID-19 and, by extension, eliminate jobs. Notably, Biden’s proposal does not have an exception for small businesses and non-profits. Now that the Democrats control both houses of Congress, the measure could pass without Republican support. However, the Biden administration would likely still need the support of the more moderate wing of the Democratic party, including Joe Manchin of West Virginia and Kyrsten Sinema of Arizona. Employers will need to stay tuned, as the ultimate details of the proposal could be changed as a result of negotiations amongst Democrats.
On a separate note, HR Legalist recently noted here that the Consolidated Appropriations Act, signed by President Trump on December 27, 2020, declined to extend the FFCRA (the benefits of which we have summarized here), which expired on December 31, 2020. Though it did not extend the FFCRA, it did permit employees who voluntarily provide “FFCRA like” paid benefits to employees to claim a dollar-for-dollar tax credit on wages paid to employees taking leave under such a policy.
The Biden Administration seeks not only to revive the FFCRA but to add to it as well. Indeed, if the Biden Administration has its way, not only will the mandatory leave provisions return, but exemptions for employers with more than 500 employees or less than 50 employees will be eliminated. A statement released by the incoming administration further indicated that its aim is to provide more than fourteen weeks of paid leave to parents with caregiving responsibilities who are faced with the closure of a school or daycare center, caretakers of those with COVID-19, people quarantining, and those who need time off of work to get vaccinated. Finally, the administration’s plan would grant a refundable tax credit for 100% of the cost of providing such paid leave to employers with fewer than 500 employees.
These two issues have the potential to have a major impact on employers and are in a constant state of flux given their politically charged nature. Employers should therefore take care to monitor the rapidly changing landscape and to consult with their employment attorneys to ensure compliance during these uncertain times. As always, HR Legalist will continue to monitor these issues and provide updates as appropriate.
The information contained in this publication should not be construed as legal or medical advice, is not a substitute for legal counsel or medical consultation, and should not be relied on as such.