By Stephen K. Cooper

Law360 (March 14, 2020, 1:38 AM EDT) -- House lawmakers early Saturday morning passed emergency legislation to provide support to American families impacted by the novel coronavirus, including a new tax credit for employers who provide emergency paid sick leave for their workers. 

The Families First Coronavirus Response Act, or H.R. 6201, which passed the House by a vote of 363 to 40, was the subject of two days of intense negotiation between House Speaker Nancy Pelosi, D-Calif., other House Democratic leaders and Treasury Secretary Steven Mnuchin. Hours before its passage, President Donald Trump declared a national emergency that will free up billions of dollars to help states, small businesses and individuals respond to the outbreak.

In a tweet before the vote, Trump said he fully supports the bill that provides "free CoronaVirus tests, and paid sick leave for our impacted American workers." The president also said he directed the secretaries of the departments of Labor and Treasury to issue regulations that provide more flexibility to small businesses.  

Senate lawmakers are expected to consider the bill next week while the House is scheduled to begin a one-week recess, which could be made longer due the impact of COVID-19 in their congressional districts. 

The House measure is the second bill that lawmakers have passed this month to provide economic support to families. Trump signed an $8.3 billion relief package in early March to combat the new coronavirus. 

"As the Senate works to pass this bill, the House will begin work on a third emergency response package to protect the health, economic security and well-being of the American people," Pelosi said in a letter to lawmakers ahead of the House vote. "We will do so in continued consultation with scientists, researchers, health care professionals, public health officials and community leaders, so that we can craft the most effective, evidence-based response."

Pelosi said the legislation would provide workers with two weeks of paid emergency sick leave, 90 days of paid family and medical leave, and enhanced unemployment insurance for workers who lose their jobs because of the outbreak.

The measure would also combat food insecurity by strengthening SNAP, student and senior meals, and food banks, Pelosi said. The bill would also boost funding for Medicaid health insurance for state, tribal and local governments.

House Ways and Means Committee Chairman Richard Neal, D-Mass., said he was confident this measure will pass Congress with full bipartisan support and reach the president's desk without issue.

"Americans are looking to their government leaders to come together and present real solutions," he said. "We are taking decisive action to help limit the spread of coronavirus, to allow Americans critical access to testing, and to provide families' financial security in the near and long term." 

Texas Republican Kevin Brady, the ranking member on House Ways and Means Committee, said he decided to vote in favor of the legislation "because it achieves the president's goal of free testing and helps working Americans who are ill, quarantined, or caring for others due to coronavirus, by providing a tax credit to employers."

The legislation would provide employers with a refundable tax credit to offset the cost of providing a worker with paid medical leave, according to a bill summary. The bill caps the amount of qualified sick leave wages taken into account for each employee at $511 per day.

The credit would offset $200 per day of wages for employees who must care for a loved one or whose child is home because of a school or daycare closing.

Self-employed workers would also qualify for the same level of refundable tax credit to offset wages paid during an illness, with a corresponding lower amount available if the absence from work is used to take care of a family member or provide for a school-aged child who must stay home. The bill also includes $15 million for the Internal Revenue Service to implement the tax credits for paid sick and paid family and medical leave.

Congress intends to work on another coronavirus bill that could include tax incentives to stimulate the economy and assist working families, with Trump and Mnuchin both calling on Congress to approve a cut in payroll taxes. Democratic response to the proposed payroll tax cut has been lukewarm, with some suggesting that it would negatively impact the Social Security program.  

House Democrats plan to make a major push to expand the earned income tax credit, even though Republicans have complained about the cost of doing so. Democrats Tim Ryan of Ohio and Ro Khanna of California unveiled legislation Friday calling for an emergency expansion of the EITC program to provide up to $6,000 for each individual who earned less than $65,000 last year. 

The legislation would double the current credit for recipients who received it in 2019. Families would get an immediate payment of half of the credit, with the remainder paid at three months and six months in order to provide immediate stimulus, according to a summary of the bill.  

"In order to alleviate the economic fallout of the coronavirus, we must ensure hard-working Americans have money in their pockets and are able to pay their bills," Khanna said in a statement. 
 
--Editing by Neil Cohen and Emily Kokoll.

For a reprint of this article, please contact reprints@law360.com.