March 21, 2023

New Comprehensive Paid Leave Program Proposed by White House Budget

Blueprint Aims to Introduce Ideas More than Introduce New Laws
Calculator and a few dollar bills
On March 9, the White House announced President Biden’s budget proposal for fiscal year (FY) 2024. For the first time, President Biden outlined a new national, comprehensive paid family and medical leave program. With $325 billion in funds, the Social Security Administration would lead a family and medical leave program that would provide workers with up to 12 weeks of partial wage replacement. Additionally, the budget calls on Congress to require employers provide up to seven days of paid sick leave. While the White House budget proposal is extremely unlikely to advance in the 2023-2024 session of Congress, any new national family and medical leave program with mandatory sick days will present the industry with a new issue to consider. 

The formal budget request reintroduced several of the Administration’s existing priorities, as well as new tax revenues. Within the proposal are initiatives that could support the restaurant industry, as well as potential changes that would put stress on restaurant operators. We will continue our work with Congress and the Administration to include provisions that will benefit the restaurant industry. 

Issues the Association is eager to learn more about  

As Congress deliberates on the Administration’s proposed budget, we look forward to learning more about the following proposals.  

New proposals for paid family leave, medical leave, and paid sick leave. The Administration requested $325 billion in funding for a national, comprehensive paid family and medical leave program controlled by the Social Security Administration that allows up to 12 weeks of leave for eligible workers. The ask includes a request for Congress to require employers to provide seven job-protected paid sick days each year to all workers. Lastly, they included $10 million to help states expand access to paid leave benefits, including grants and the creation of a technical assistance hub to share best practices among states. 

Increasing food safety & nutrition oversight. The proposed budget requested $133 million (10% increase) for the Food and Drug Administration to strengthen food safety and nutrition capacity as well as $41 million ($37 million more than prior year) to bolster food safety efforts, which would support the implementation of new FDA traceability requirements. Additionally, the Administration asked for $12 million in new funding to support food labeling modernization and $15 billion to advance a pathway to free school meals for an additional nine million children—meals that our members help provide. 

Opportunities for the restaurant industry  

The Association was pleased to see the following initiatives and requests included in the Administration’s budget proposal.  

Bolstering workforce opportunities and training programs. The Administration proposed $335 million for the Registered Apprenticeship Program, as well as $200 million for Sectoral Employment through the Career Training for Occupational Readiness (SECTOR) program to develop and expand public-private workforce initiatives. Lastly, they requested $100 million to build community colleges’ capacity to work with employers to deliver training programs. 

Enhancing child tax credit and childcare educational programs. The proposed budget wants to allocate $600 billion to childcare programs and expand the Child Tax Credit (CTC) from $2,000 per child to $3,000 per child for children ages six to 17 years old. Further, they are increasing the CTC to $3,600 per child for children six years old and under. The proposed expansion has helped some financially vulnerable families overcome hurdles to labor force participation. 

Stabilizing food prices and reducing supply chain disruptions. The Association was pleased to see the Administration show direct support for farmers by allocating $4 billion for agriculture research funding, and $373 million for the ARS crop production program to focus on reducing crop losses. Additionally, they asked for $208 million above the 2023 level to increase voluntary adoption of agricultural conservation practices through the Natural Resources Conservation Service. The Administration also sought to increase the food supply by giving $1 billion to expand meat and poultry capacity, $400 million for Regional Food Business Centers, $245 million to create a fairer, more competitive food system, and $240 million in supporting new supply chains and markets that uplift small and mid-sized farmers. As evidenced by the last few years, a strong supply chain will help to stabilize food prices, as well as encourage fewer critical food shortages. 

Improving infrastructure and electric vehicle support. The Administration is seeking to allocate $230 million toward strengthening the global food supply through port infrastructure development. Additionally, they requested $76.1 million go to highway programs and funding to repair roads and bridges, as well as funding to build out a national network for electric vehicle chargers. Lastly, the Administration asked for $801 million across 21 agencies for zero-emission fleet vehicles and associated charging infrastructure. These improvements will help to lower overhead costs while incentivizing sustainable initiatives for businesses. 

Proposals to Monitor  

Below are proposals the Association plans to closely monitor in the coming months.  

Net Investment Income Taxes. The Administration asked for $650.5 billion to increase the 3.8% Net Investment Income Tax (NIIT) to 5% and for it to be applied to every pass-through business earning over $400,000 in annual, active income. The Association strongly opposed the expansion of NIIT in 2021 and 2022 and will continue to do so moving forward. 

Repealing the stepped-up basis for inherited family-owned restaurants. The budget proposal asked Congress for $213.9 billion to repeal the stepped-up basis for an inherited family-owned restaurant, specifically requesting to change the basis on which they are taxed. This change would devastate multigenerational businesses, creating unnecessary burdens as next generations step into ownership roles and deepen family legacies.  
Increasing the corporate tax rate and the excise tax. Similar to recent budget proposals, the Biden Administration requested $1.33 trillion to increase the corporate tax rate from 21% to 28%, as well as asking for $237.9 billion to quadruple the 1% excise tax on repurchases.  

More resources for expansive Labor Department and National Labor Relations Board oversight. The Administration asked for $2.3 billion for the Department of Labor’s (DOL) agencies such as the Wage and Hour Division and OSHA—an increase of nearly $430 million. Additionally, they asked for a $376 million increase for the National Labor Relations Board.  

Moving forward, the Association is closely monitoring changes and will continue to support, evaluate, or oppose these initiatives as Congress considers what will be in the final budget bill.