Senators’ Legislation Would Make State and Local Governments Eligible for Emergency Paid Leave Payroll Tax Credits

WASHINGTON, D.C. [04/28/20]—Today, U.S. Senators Tina Smith (D-Minn.) and Dick Durbin (D-Ill.) announced plans to introduce a legislative fix that would help state and local governments provide public employees with paid leave when they need it most. 

The Families First Coronavirus Response Act requires many public and private employers to provide paid leave for workers affected by the coronavirus pandemic. That law provides tax credits to private-sector employers to cover the costs of paid leave. But the package did not extend those tax credits to public-sector employers. This is putting a financial strain on state and local governments at a time when many are grappling with additional costs brought on by the coronavirus pandemic.

The senators’ legislation will fix this problem by making state, local and Tribal governments eligible for paid leave payroll tax credits.

“Minnesota employers, including state and local governments, are facing an unprecedented economic crisis due to the coronavirus pandemic," said Sen. Smith. "It’s unfair that Minnesota’s state and local governments aren’t eligible for these tax credits to help give police, firefighters and other public employees paid leave when they most need it. They should receive relief to help offset the additional cost of paid leave, just like private companies. My legislative fix will right this wrong and—more importantly—help support paid leave for Minnesotans affected by the pandemic."

“Our bill would provide much needed relief to state and local governments who are at the forefront of this public health crisis.  Making the tax credits for emergency paid sick and family leave created by the Families First Coronavirus Response Act available to state and local governments is fair and the right thing to do,” said Sen. Durbin.