HOW THE CORONAVIRUS AID, RELIEF, AND ECONOMIC SECURITY (CARES) ACT EXPANDS UNEMPLOYMENT COMPENSATION & PROVIDES OTHER EMPLOYEE BENEFITS:
WHAT EMPLOYERS NEED TO KNOW
On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (CARES), was signed into law. The CARES Act is the third aid package intended to address the economic hardship caused by the COVID-19 pandemic. The law provides approximately $2 trillion in funding and makes a $260 billion investment into the unemployment insurance program. There are several significant changes to unemployment compensation (UC) and the CARES Act provides clarification of the Families First Coronavirus Relief Act (FFCRA), which becomes effective April 1, 2020. Read our alert regarding FFCRA here.
These are the highlights of the CARES Act implications for employers to know:
The CARES Act provides enhanced unemployment insurance benefits to employees for total and partial unemployment and to employers for retaining certain employees.
Title II – Assistance for American Workers, Families and Businesses
Subtitle A -- Unemployment Insurance Provisions
Section 2102 – Pandemic Unemployment Assistance
Section 2102 expands UC to cover employees who were terminated or who are unable to work or experiencing reduced hours because of COVID-19, and who are not otherwise eligible for regular compensation or extended benefits. This includes those individuals who have exhausted all rights to regular unemployment or extended benefits under State or Federal law.
Section 2104 – Emergency Increase in Unemployment Compensation Benefits
Section 2105 – Temporary Full Federal Funding of the First Week of Compensable Regular Unemployment for States with No Waiting Week
Section 2107 – Pandemic Emergency Unemployment Compensation
Section 2108 – Temporary Financing of Short-Time Compensation Payments in States with Programs in Law
Section 2109 – Temporary Financing of Short-Term Compensation Agreements
Section 2111 – Assistance and Guidance in Implementing Programs
Section 2112-2114 Applies to Unemployment Benefits Under The Railroad Unemployment Insurance Act.
Section 2206 – Exclusion for Certain Employer Payments Of Student Loans
Section 2301 – Employee Retention Credit for Employers Subject to Closure Due to COVID-19
If an eligible employer receives a covered loan under paragraph (36) of section 7(a) of the Small Business Act (15 U.S.C. 636(a)), as added by section 1102 of this Act, such employer shall not be eligible for the credit under this section.
Section 2302 - Delay of Payment of Employer Payroll taxes
III. The Act confirms the emergency FMLA and sick leave benefits available to employees and advanced tax credits employers can take in providing these benefits.
Section 3601 - Limitation on paid leave
Section 3602 - Emergency Paid Leave Act Limitation
Section 3605 - Paid Leave for Rehired Employees
Section 3606 - Advance Refunding of Credits
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