As I noted yesterday, the House version of the Families First Coronavirus Response Act provides for paid sick leave and FMLA. Under the bill, employers will receive a 100% tax credit against the employer portion of social security taxes in order to pay for this benefit. At first, I presumed this reimbursement would apply to public employers. However, I’ve been told and have confirmed that the most recent version of the bill contains a “special rule” that:
STATE AND LOCAL GOVERNMENTS.—This credit shall not apply to the Government of the United States, the government of any State or political subdivision thereof, or any agency or instrumentality of any of the foregoing.
This special rule applies to both the paid sick leave and paid FMLA provisions in H.R. 6201. I’ve been told that state and local governments are trying to eliminate this special rule. However, if this law passes with this language, it appears that public agencies in California will not receive any reimbursement from the federal government for the cost of paid sick leave and FMLA.