Former Vice President Joe Biden, the likely Democratic presidential nominee, on Thursday released a plan calling for federal subsidies to help companies keep on more employees during the coronavirus pandemic.
Biden proposed scaling up state-run “short-time compensation programs” under which, as he described it, “firms in distress keep workers employed but at reduced hours and the federal government helps make up the difference in wages.”
The goal is to keep workers attached to their jobs, wages and benefits, even if employers cut their hours. “We should be committed to keeping as many people as possible attached to their employment, so they can easily return to work when appropriate, and maintain their income and benefits,” Biden said in a statement. “This is more than just the right thing to do — it is the surest road to a rapid recovery, because the faster everyone returns to their jobs, the faster we can improve demand and get our economy running again.”
The Biden campaign said 27 states have such short-time compensation plans and that, if elected, Biden would look to reform and expand such programs. Biden said he would have the programs “be 100% permanently funded by the federal government” and expanded to all states and territories by “using a mix of conditioned assistance and additional incentives.”
Biden also proposed allowing the program to help businesses cover rent and other necessities, automatic triggers for the emergency aid and a tax credit to help cover employer health care costs for workers whose hours are cut. “While it is crucial that employees keep their full benefits, having to fund the full health care costs of workers when they are seeing a significant fall in revenue can discourage companies from choosing short-time compensation over layoffs,” the Biden campaign said.
The $2.2 trillion coronavirus relief package enacted last month provides 100% federal funding for short-time compensation programs, with benefits capped per person at the total amount workers would have received had they lost their job, according to The Hill.