In a major step to combat the coronavirus pandemic, President Trump signed a $100 billion relief package into law Wednesday night, which includes paid emergency leave for many workers.
The law gives employees up to 14 days of paid sick leave if they are being tested for COVID-19, being treated for it, or have been diagnosed with it. There’s also paid leave for those helping family members with the virus and for those whose children are home from school.
Other major provisions include free COVID-19 testing, more dollars for food assistance programs, unemployment benefits, and funding for Medicaid.
However, the expanded sick leave portion does not apply to businesses with 500 or more employees such as McDonald’s or Subway.
“Some critics will say it did not go far enough—or example, why are large employers—those with over 500 employees—exempt from the new law?” said Rebecca Bernhard, a partner at international law firm Dorsey & White. “Many note that it is smaller employers who are more vulnerable to the economic difficulties and employees of those smaller companies that are most likely to need federal mandated benefits. However, imposing mandatory economic obligations onto small employers is not something that would have received such quick bi-partisan and presidential support. Compromises have to happen. That still leaves us wondering why large employers were exempt.”
Bernhard said the most interesting provision in the new law is the unemployment access section. The law should allow the acceptance of more applications for unemployment benefits. She noted that many states have already passed orders to reduce or eliminate barriers for applicants seeing unemployment benefits, and she expects more to follow.
Another provision should empower states to help employers navigate through layoffs, reduced hours, work-from-home policies, and furloughs without fear of an increased tax assessment or other consequences, Bernhard said.
The attorney said the new law puts small businesses in a peculiar position.
“The practical combination of the unemployment provisions and the limits on the additional paid sick time create a perverse incentive for small employers to do better by their employees to implement short-term layoffs; such employees can then receive unemployment benefits where those same employees will not see any relief from the emergency leave and FMLA modifications in the new law,” Bernhard said.
Now the focus turns to the $1 trillion economic stimulus package that includes aid for small businesses and direct payments to Americans.
Stocks across the restaurant industry lifted Thursday after a handful of organizations called on the federal government to pass legislation. Brinker International, Dominos, Wendy’s, Jack in the Box, Cracker Barrel, Dine Brands, and Denny’s were among chains that saw a bump in share prices.
The National Restaurant Association said in a letter to the federal government that the restaurant industry could see losses of $225 billion in the next three months, along with the loss of 5 million to 7 million jobs. The Association asked for a $145 billion restaurant and foodservice industry recovery fund to help cover operations and pay employees.
The International Foodservice Distributors Association sent a letter to Trump as well, urging the administration to work with Congress to develop legislation to relieve businesses under distress.
In the letter, Mark Allen, president and CEO of the Association, said that foodservice distributors typically operate at a 2 percent margin or less, meaning a large change in sales can have a significant impact. He also noted that the foodservice distributor industry is valued at $280 billion, including 15,000 distribution centers, 350,000 employees and more than 153,000 vehicles.