Perhaps by the time this column reaches TCI Magazine readers’ hands, certain states and even the federal government will have begun to lay out various strategies and pathways to reopening the country following the unprecedented changes COVID-19 has inflicted upon every day of our lives. However, at the time of this writing – Congress just announced it will not return to Washington, D.C., until May 4 – employers, employees and individuals continue to navigate the flurry of relief measures President Trump signed into law in March.
Those measures, which are referred to as Congress’s three-phase response to the coronavirus outbreak, required President Trump and Congress to bridge partisan divides in order to pass three major pieces of legislation within three weeks that would provide relief to individuals, families and a U.S. economy struggling with the consequences of the COVID-19 pandemic.
On March 6, President Trump signed into law H.R. 6074, the Coronavirus Preparedness and Response Supplemental Appropriations Act, 2020, which allocated $8.3 billion in aid to the United States’ public-health response to COVID-19. This initial response was intended to prevent, prepare for and respond to the spread of coronavirus through funding allocated to the development of countermeasures and vaccines and to support core public-health functions such as surveillance, infection control and other activities. This initial phase did not provide any major relief to individuals or businesses, but it did clarify that the Small Business Administration’s (SBA’s) disaster loans could be made in response to COVID-19.
The next phase of the response, the Families First Coronavirus Response Act (FFCRA), was signed into law March 18. This law includes provisions such as free coronavirus testing, expanded food assistance and (expanded?) unemployment benefits. The law also created two new and temporary paid-leave requirements for private employers with fewer than 500 employees: 1) Emergency Family and Medical Leave Expansion Act and (2) Emergency Paid Sick Leave Act.
The first provision allows eligible employees of covered employers to use up to 12 workweeks of Family and Medical Leave Act (FMLA)-protected leave to care for the employee’s minor child whose school or care provider is unavailable due to a COVID-19 public-health emergency. The leave, following the first 10 days, must be paid at two-thirds the regular rate of pay (capped at $200 per day, per employee, up to $10,000 total per employee).
The second provision provides up to 80 hours (pro-rated for part-time workers) of paid sick leave at the employee’s regular rate of pay for leave taken for the employee’s quarantine, self-isolation or medical diagnosis (capped at $511 per day and $5,110 total per employee) and at two-thirds the employee’s regular rate of pay if the employee is unable to work because of caregiving and other needs (capped at $200 per day and $2,000 total per employee).
Importantly, the legislation provides an exemption from both provisions for businesses with fewer than 50 employees if such leave “would jeopardize the viability of the business as a going concern.” For employers who cover the costs of the newly created leave upfront, H.R. 6201 provides employers in the private sector with refundable tax credits. Members are encouraged to consult with employment counsel on the obligations under this new law.
On March 27, 2020, President Trump signed into law the most recent piece of legislation, H.R. 748, the Coronavirus Aid, Relief and Economic Security (CARES) Act, a $2 trillion emergency-relief bill that includes numerous provisions to assist employers and employees during the COVID-19 induced job disruption and economic downturn. For qualifying small businesses and certain nonprofits, the CARES Act established the Paycheck Protection Program (PPP) to provide loans for up to eight weeks of payroll costs, including benefits. Loans made under the program are eligible for forgiveness if the recipient retains employees and maintains payroll. While PPP loans are available until June 30, 2020, at the time of this writing, the SBA had exhausted the $349 billon Congress had appropriated for the program, and a deal for providing additional funding to the program was at an impasse.
The CARES Act also enhances the existing state unemployment insurance (UI) system and creates a parallel system called Pandemic Unemployment Assistance. The enhanced UI system provides added support for those eligible for traditional state UI benefits, while the Pandemic Unemployment Assistance system provides support for individuals who are not otherwise eligible for benefits under the state UI system, including those who are self-employed, are independent contractors or lack sufficient work history. While the UI system normally extends benefits to individuals for a period of 26 weeks, both the bill’s enhanced UI system and the Pandemic Unemployment Assistance system provide up to 39 weeks of coverage at regular state UI rates and provide an additional $600 per week in payments until July 31.
It is widely understood that Congress will need to pass additional stimulus measures in order to prop up the economy, and it is expected that lawmakers will work on a “Phase 4” once it returns to D.C. on May 4. As PPP loans have run dry, Congress will look to bolster this program before turning to a separate stimulus measure that will build upon the policies implemented in the CARES Act, and possibly will turn to other policy priorities such as infrastructure spending.