Partner Don Schroeder was quoted in the Law360 article, “An Employer’s Cheat Sheet for the 854-Page Virus Relief Bill,” about whether the legislation created an incentive for layoffs.
Schroeder told Law360 that the act creates two ways to keep workers paid during the crisis: Providing direct help to workers who lose their jobs, and extending loans to businesses to help them maintain pay and benefits. But some are concerned the former path is too generous, incentivizing employers to close up shop rather than wait out the crisis.
This led Sens. Lindsey Graham, R-S.C., Tim Scott, R-S.C., Ben Sasse, R-Neb., and Rick Scott, R-Fla., to threaten to derail the bill hours before the Senate vote Wednesday, though they ultimately relented. But the concern is real, said Schroeder. Coupled with many employers’ looming obligations to provide paid sick days and leave to workers affected by the virus under the Families First Coronavirus Response Act, there are “few economic incentives for employers to do anything but lay off employees right now,” he added.
“It’s giving a lot of benefits to employees, either employed or no longer employed, but it does not appear to give significant benefits to the employers to ensure that they’re not the ones stuck footing the bill,” he said.