House Set to Pass COVID Relief Bill, Sen. Sanders Changes Minimum Wage Plans

February 26, 2021

After the Senate parliamentarian ruled against including a minimum wage increase in the COVID relief bill, Sen. Sanders vowed to add language to the bill that removes tax breaks from large companies that do not pay at least a $15 per hour wage.

The bill includes funding to:

  • Provide COBRA subsidies for employers through September 30, 2021;

  • Increase and extend the generosity of the ACA premium subsidies for purchasing coverage in the exchanges;

  • Incentivize states to expand their Medicaid programs; and

  • Speed up vaccine distribution and administration.

On Thursday, the Senate parliamentarian ruled against including a minimum wage increase in the Senate version of the bill because it does not meet the chamber’s budget rules.  President Biden does not support overruling the parliamentarian at this point.

Backdoor increase through the tax code?  Sen. Sanders (I-VT) said he will work with Democrats on “an amendment to take tax deductions away from large, profitable corporations that don't pay workers at least $15 an hour and to provide small businesses with the incentives they need to raise wages.”

Senate Finance Committee Chairman Ron Wyden says he will seek a 5% penalty on big companies that fail to pay employees a certain amount, what he calls a “Plan B” since the  minimum wage can’t be included in COVID relief bill.  The plan would also include safeguards to block companies from outsourcing labor to avoid paying “living wages” to employees.  Republican Sen. Josh Hawley says he will also push to force companies with revenues of more than $1 billion to pay employees $15 an hour.

GOP alternative?  Sen. Romney and Cotton released their own proposal, the Higher Wages for American Workers Act, which would incrementally increase the minimum wage to $10 by 2025, and then adjust it for inflation every two years after that. The plan would also require all employers to use the E-Verify employment authorization system.  

Outlook:  As chair of the Senate Budget Committee, Sen. Sanders can include such a provision in the Senate COVID relief bill, if he can find an approach that all 50 Democrats in the Senate can support.  Once the Senate amends the COVID relief bill, it will go back to the House for a vote and then to President Biden to sign.