By Mark Valentini, Director of Legislative Affairs
In response to the COVID-19 pandemic, Congress has passed two bills providing financial aid and is currently debating a third bill that will provide significant economic stimulus (subsequently known as “Phase 1,” “Phase 2,” and “Phase 3”).
Phase 1 – On March 6, 2020, the president signed an $8.3 billion emergency spending bill (H.R.6074 Coronavirus Preparedness and Response Supplemental Appropriations Act) providing immediate funds for the U.S. Department of Health and Human Services (HHS) to confront the immediate public health threats posed by COVID-19, procure medical supplies, develop vaccines, and provide assistance to state and local health agencies.
Phase 2 – On March 18, 2020, the President signed a $100 billion spending bill (H.R.6201, the Families First Coronavirus Response Act), which would go toward testing and treatment for COVID-19 and expand unemployment and emergency food assistance programs. The bill also includes provisions requiring employers to pay for sick leave and family medical leave for employees directly impacted by COVID-19. These provisions go into effect on April 2, 2020, and expire no later than December 31, 2020.
The following family and sick leave provisions apply to businesses employing 500 employees or less:
- Should an employee be diagnosed or show symptoms of COVID-19, or is required not to come to work due to medical or government edict mandating a quarantine, employers must pay two weeks’ sick leave benefits to that employee not to exceed 80 hours (part-time employees would receive pay based on the average number of hours worked over the course of two weeks), and not to exceed $511/day or $5,110 total.
- Should an employee need to care for a loved one under quarantine, or care for children who must stay home because of school closures, employers must pay sick leave benefits for up to two weeks at ⅔ regular pay not to exceed $200/day or $2,000 total.
- Employees unable to work because of unexpected child care responsibilities resulting from the COVID-19 pandemic will be entitled to up to 12 weeks of paid leave at ⅔ their regular salary, not to exceed $200 per day/$10,000 total. Businesses with 50 employees or less will be exempt from these requirements if it poses an undue burden on business operations.
There will be a 30-day non-enforcement period beginning April 1 (not April 2) to allow businesses to adjust to these provisions. Information on how businesses can take advantage of the tax credit is expected to be made public shortly and should be available at this page: www.irs.gov/coronavirus.
The U.S. Department of Labor (DOL) has published guidance on the legislation here, which includes examples how businesses can take advantage of the tax credits.
Phase 3 – Around midnight on March 26, 2020, the Senate passed S.3548, the Coronavirus Aid, Relief and Economic Security (CARES) Act. The House is expected to pass the bill expeditiously for the President to sign by the weekend.
“Phase 3” will be an economic stimulus package expected to inject over $2 trillion into the U.S. economy, including loans for small businesses that are disrupted by the pandemic, as well as loan forgiveness to businesses for up to the amount paid to employees for paid sick and family leave.
The bill also includes:
- 4 months of more unemployment insurance instead of 3 months.
- $150 billion for a state, tribal, and local Coronavirus Relief fund.
- $10 billion for SBA emergency grants of up to $10,000 to provide immediate relief for small business operating costs.
- $17 billion for SBA to cover 6 months of payments for small businesses with existing SBA loans.
- $30 billion for the Disaster Relief Fund to provide financial assistance to state, local, tribal, and territorial governments, as well as private nonprofits providing critical and essential services.
- Make rent, mortgage and utility costs eligible for SBA loan forgiveness.
- Add a retention tax credit for employers to encourage businesses to keep workers on payroll during the crisis.
For other advocacy updates, visit the COVID-19 Resource Center.
Director of Legislative Affairs , PHCC-National Association