The problem is that the boost to unemployment benefits enacted by Congress is overkill for many workers, leading to perverse incentives.

Because the extra $600 is a flat extra benefit, the gap between what unemployed workers can get now versus what they were earning when they worked is even larger for lower-earning workers. And it is not just deep-blue states like California. In Texas, for example, unemployed workers who previously earned up to $58,000 per year will be better off unemployed, at least for the first four months.

Now think of what this means when we re-open the economy. Some workers will go back to work because they might fear their job disappearing if they hold out. But many will not want to give up the higher payments, and businesses will now be competing with government for workers at the same time they are digging out of a huge financial hole. In fact, many low margin businesses may not be able to afford those higher wages.

Do not get us wrong; we like faster wage growth. What we do not like are government policies that create perverse incentives to avoid work once it becomes more available.

If bad policies drive wage increases, it makes it tough for businesses to hire, which leads to a more prolonged surge in unemployment and a slower return to the standard of living we had before COVID-19.

Early in the Great Depression, the Hoover administration urged companies to maintain wages in spite of deflation. The idea was that if wages were kept high, workers would have more purchasing power, which would boost output. But workers were already getting a boost from falling prices, and firms that kept wages high would not hire new workers. It made the Depression worse.

By boosting unemployment benefits, the government has put businesses in a position where they have to boost wages, indirectly making the same mistake as President Hoover.

Brian S. Wesbury is chief economist and Bob Stein is deputy chief economist at First Trust. Their column appeared in Monday Morning Outlook. Read it in its entirety at .

The latest guidance by the DOL significantly expands a Q&A document issued earlier last week exploring key questions about the Families First Coronavirus Response Act (FFCRA), which President Trump signed into law March 18. The law takes effect April 1 and remains in place through 2020.

The new items touched on what the DOL deemed critical issues, including the application of so-called intermittent leave, when workers take leave for short periods of time, and how the law applies to businesses that are forced to shutter amid the COVID-19 pandemic.

To help Americans weather the economic storm brought on by the virus, the Families First Act requires businesses with fewer than 500 workers to provide emergency short- and long-term paid leave.

The law provides two weeks of time off at full pay to workers who cannot work for reasons connected to the virus, such as being quarantined or caring for a loved one who is. The law applies to part- and full-time workers, providing them as many hours off as they generally work in two weeks, up to 80 hours.

Additionally, employers must pay employees at their full wage if they are taking time off for themselves or two-thirds of their regular pay if they have to care for a family member, up to certain caps. The bill also amends the Family and Medical Leave Act to give workers long-term paid time off at partial pay if they can’t work because their child’s school has closed.

Employers covered by the law can seek reimbursement of any qualifying wages they pay under the FFCRA through tax credits.

Find an application for leave for employees to submit at .

In its initial batch of guidance last week, the DOL touched on issues that included which categories of workers could be counted toward the 500-worker threshold.

Friday’s version tackled topics such as how the FFCRA will incorporate the concept of intermittent leave, which has long been among the most vexing issues for employers to handle when it has arisen in the context of the FMLA.

The DOL said employees who are able to work remotely can break up their intermittent leave time. That means workers who have their employer’s blessing can telework until noon, take intermittent paid leave for two hours, and then go back to teleworking.

If a worker has to physically report to work, the DOL said his or her ability to take intermittent paid sick leave under the new law will be more restricted since the concept behind it is to keep people who can’t work for COVID-19-related reasons away from others. If people are quarantined because of COVID-19, are experiencing symptoms of the disease or are caring for someone who is suspected to be infected, intermittent paid sick leave won’t be an option, the agency said.

“Unless you are teleworking, once you begin taking paid sick leave for one or more of these qualifying reasons, you must continue to take paid sick leave each day until you either (1) use the full amount of paid sick leave or (2) no longer have a qualifying reason for taking paid sick leave,” the agency said.

Employees who can’t telework can take intermittent leave under the new law to take care of kids whose schools or child care facilities were forced to close because of the virus. They can work only Tuesdays and Thursdays, for example, as long as their employer agrees to the arrangement.

Elsewhere in the updated guidance, the DOL said workers won’t be able to avail themselves of any of the leave options made available in the FFCRA during any time period in which their employers are closed, whether it is shuttered for lack of business or because of an order by public officials. But workers who find themselves in those situations can potentially claim unemployment benefits.

If a business remains open but furloughs workers, those individuals similarly won’t be entitled to leave under the FFCRA but can seek unemployment, the DOL said.

Earlier guidance last week included notices that employers must post that lay out the various triggers for paid sick and leave time, the amount of time workers can take off and the amount they’ll be paid while off work. Learn more online at .

Source: Law360