The CARES Act – COVID-19 Federal Stimulus Package Benefits for Employers and Employees

During this unprecedented time, many Americans have concerns about how they will be able to minimize the negative effects that the coronavirus pandemic (COVID-19) has on their families and businesses.

To provide relief, Congress recently passed the federal stimulus package, known as the CARES Act, to aid the families and businesses affected. As an employer or employee, how can this benefit you?

When breaking down the stimulus package, it can be understood in four broad categories – I have created an easy to remember acronym to help simplify – “S.U.L.T.”

 

S – Expanded Paid Sick and Family Leave for Employees

U – Expanded Unemployment Benefits for Employees

LLoan Forgiveness Programs for Employers/Businesses

TTax Relief for Employers/Businesses

S – Expanded paid sick and family leave for employees

Under the CARES Act and the prelude Family First Act, private employers with 500 or fewer employees are required to provide eligible employees who are affected by COVID-19 with up to 10 weeks of paid family leave and up to 10 days of paid sick leave. Depending on the employee’s level and situation, there are daily caps on the amounts employers must pay employees for paid sick leave and family leave. This applies to employees who work for large companies.

All employees may still have other paid and sick leave available to them, depending on their company’s policies and the state they reside in. For example, in California, all part- and full-time employees are eligible for up to 3 days of paid sick leave annually. Additionally, the Kin Care Law in California allows employees to use up to half their sick leave to care for an immediate family member that is ill.

Employees may also qualify for unpaid leaves of absence, such as the Family Medical Leave Act (FMLA), for their own serious medical condition or the serious medical condition of an immediate family member.

U – Expanded unemployment benefits for employees 

Both the federal government and most state governments have waived the normal requirement that an employee must work a certain amount of time to be eligible for unemployment benefits. Employees also are no longer required to wait until a week after a layoff or separation to apply for unemployment benefits. 

Normally, independent contractors and business owners are not eligible for unemployment benefits. However, the CARES Act provides unemployment benefits both for employees and independent contractors/self-employed individuals such as Uber drivers, hairstylists, and other business owners.  

First, these individuals must apply for their own state unemployment benefit.  On top of their state benefit, they are eligible to receive up to an additional $600 per week under the CARES Act through July 31, 2020.  These benefits are retroactive from January 27, 2020 for individuals who were laid-off, terminated, or experienced a reduction in their business (independent contractors and small businesses).  Once an individual’s unemployment benefits runs out, individuals can apply for an additional 13 weeks of emergency unemployment benefits. Independent contractors and small business owners are eligible for up to 39 weeks of unemployment benefits.   

L & T – Loan forgiveness and tax relief for businesses 

The goal of the CARES Act is to help businesses, especially small businesses, stay alive. Loan forgiveness programs are offered to cover things like overhead, rent, payment of employee payroll, health and retirement benefits. In order to have the loan forgiven, the employer must agree to keep employees working or rehire the employees when the operation resumes. Businesses are also offered relief in paying payroll and other business taxes.

Stimulus Checks

Additionally, many Americans will receive stimulus checks based upon their adjusted gross incomes as reflected in their 2018 or 2019 tax filings: 

  • Individuals who make less than $75,000 will receive a $1,200 check
  • Individuals who make up to $99,000 will receive a smaller check
  • Married couples making under $150,000 will receive $2400 + an extra $500 per dependent child
  • Married couples who make up to $198,000 will receive a smaller check

 

There also are added benefits through the State and local governments, so be sure to check your state EDD, state and local government websites for more information. 

Resources 

Both employees and employers can find helpful resources by visiting websites for the Department of Labor, Equal Employment Opportunity Commission, and the Center for Disease Control

Angela Reddock-Wright is an employment law attorney, mediator, and investigator in Los Angeles, CA. She is the Founder and Managing Partner of the Reddock Law Group, an employment and dispute resolution firm that provides Alternative Dispute Resolution (ADR) services including mediation, arbitration, and third-party investigations, specializing in employment and labor law, bullying and hazing matters. Angela also is a member of the panel of Mediators and Arbitrators of Judicate West, a leader in providing private dispute resolution services. 

Known as the “Workplace Guru,” Angela is an influencer and leading authority on employment, workplace/HR, and Title IX issues.  She is passionate about the workplace and working with employers and employees to help create great and healthy workplaces. She believes the greatest capital a company or organization has is its “human capital.”  

Angela is a regular legal and media commentator and analyst and has appeared on and provided commentary with such media outlets as Court TV, CNN, ABC, CBS, KTLA, KPCC Airtalk-89.3, the New York Times, the Washington Post, the LA Times, People Magazine, and Essence Magazine.

 

For more information regarding tips on how to manage and deal with coronavirus in the workplace, connect with Angela on LinkedIn for new updates, or contact her here

This communication is not legal advice. It is educational only. For legal advice, consult with an experienced employment law attorney in your state or city.

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