Congress recently passed the Families First Act – the so called, second of three phases planned to handle the health and economic consequences of the coronavirus. This measure is meant to provide free testing for the virus, expand paid leave to some American workers, and increases access to unemployment insurance.
But how does this bill cover America’s Independent Workers? What additional measures can congress provide in the third bill to ensure all American workers are healthy, safe and financially secure during this crisis?
The Families First Act
On Wednesday, the U.S. Senate passed the modified version of the House’s Families First Act. With a prior funding bill signed into law on March 6th, Congress and the President have taken two relatively massive and expensive steps to help combat the health and financial outcomes of this virus.
This multibillion-dollar aid package which will take effect on April 2nd, does the following:
Expands Medicaid benefits
Orders free testing for COVID-19
Mandates emergency Family and Sick Leave for companies with fewer than 500 employees.
And provides tax credits for employers and the self-employed.
What does it mean for the Independent Workforce?
With this measure, Congress has decided that self-employed tax credits will be the most effective way to provide a first step in financial assistance to America’s self-employed and Independent Contractors.
Under the new law, a credit will be provided against the self-employment tax paid by all Independent Workers within the United States.
The credit would cover 100% of the workers’ sick and family leave.
And would cover 67% if they are taking care of a family member of if their child’s school is shut down.
The amounts would be the lesser of either their average daily self-employment income, or $511 per day caring for themselves, and $200 caring for a family member.
The average daily self-employment income is defined as the net earnings from self-employment of the individual for the taxable year, divided by 260 (working days in a year).
And sick leave would be available for 10 days with family leave up to 50.
According to the new law, self-employed individuals would be refunded from the Treasury by submitting documentation while filing their SE taxes. And although this second measure by congress demonstrates steps in the right direction – it does not solve the immediate crisis of work loss faced by millions.
A Third Phase
Despite the tax credits and expansion to FMLA, it has already been determined that a third bill will be necessary to provide a stimulus package to all working Americans who will be out of work due to the significant social distancing practices being adapted by businesses across the country. Treasury has signaled to both the Senate and House its intention for direct payments to American workers.
iPSE-U.S. believes it is of the utmost importance for the next bill to include aspects of the following.
Direct cash assistance: Upon recommendations from the Treasury to pay out immediate checks to American workers – we believe this should extend to all workers not just employees. Senator Mitt Romney and Gary Peters highlighted how such a significant chunk of our workforce is not protected by actions already enacted.
Regulatory Relief: Steps taken by the Federal Motor Carrier Safety Administration which issued a declaration to provide hours of service relief. Additional measures must be taken to free up our supply chains (which are often supported by Independent Workers).
Further Small Business Assistance: Low interest loans and grants are of the utmost importance for the millions of Independent Workers – the SBA must begin to further expand its disaster loan assistance program.
Our Co-President Mike Bishop, a former Congressman to Michigan’s 8th congressional district offered his insight that, “an infusion of cash from the government is helpful but making sure Independent Workers and small businesses have the resources to bridge this crisis is the key. Along with low interest loans and grants, the federal government should immediately pass a bill to mitigate the tax liability of independent contractors and small businesses who will not be able to make quarterly payments.”
This likely may not end with the third bill and measure, The Trump administration has indicated it is committed to providing a massive stimulus to help push
For the most up to date information on this, be sure to visit ipse.us/covid-19 for access to latest news, resources and content on how to manage your Independent Work during this crisis.