President Donald Trump signed the massive $2.3 trillion coronavirus relief and government funding bill on Sunday night, averting an impending government shutdown and extending billions of dollars in coronavirus aid. Much of the relief is an extension of benefits under previous Coronavirus stimulus and relief legislation, but there are some notable variations.
What’s in and what’s out?
OUT – Mandatory FFCRA Leave Expires, but Tax Credit Option Remains
The Families First Coronavirus Response Act (FFCRA) requires employers with fewer than 500 employees to offer employees two types of paid leave benefits for certain qualifying reasons related to COVID-19: (1) up to 80 hours of emergency paid sick leave and (2) up to 10 additional weeks of expanded family medical leave for various qualifying reasons. When FFCRA went into effect, the entitlements were set to expire on December 31, 2020. Lawmakers decided they would not extend the FFCRA beyond that date, but instead will allow employers to decide if their company will continue to provide paid leave and, therefore, continue to be eligible for the extended payroll tax credit. This option is available until March 31, 2021.
- Payroll credit for paid sick leave. The amounts paid by an employer for sick leave between January 1 and March 31, 2021, are eligible for the payroll tax credit if the leave would be creditable had the FFCRA been extended through March 31, 2021. Employees may also now carry over any unused paid sick time to next year if their employer takes advantage of the tax credit extension. Employees are not entitled to additional leave on January 1, 2021, beyond the FFCRA’s original limits. Similarly, employers will not receive tax credits if they provide more leave than required by the FFCRA’s original limits or for ineligible employees.
- Payroll credit for paid family leave. Similarly, employers can be reimbursed via tax credit for qualifying paid family leave to employees taken between January 1 and March 31, 2021, if leave would have been required to be paid under an extension of the FFCRA. An employee’s eligibility for the 10 weeks of paid family leave provided by the FFCRA depends on how much family leave the employee had already taken during their employer’s 12-month period used for Family and Medical Leave Act (FMLA) leave entitlement (if the employer is also covered by FMLA). The employer’s eligibility for a tax credit for providing and paying employees paid family leave continues through March 31, 2021.
- Action item: Will your company continue to provide both paid sick leave and paid family leave to eligible employees until March 31, 2021?
OUT – No Federal Liability Shield from COVID-19 Lawsuits, but There May be State Protections
Lawmakers could not reach consensus on immunity from COVID-19 lawsuits for businesses, despite attempts to reach a compromise. Although there is no federal immunity in this act, state law has provided protection in some instances. In September 2020, Ohio Gov. Michael DeWine signed House Bill 606 into law: (1) to provide civil immunity for health care providers who provide medical services, and (2) to provide civil immunity for businesses. Under the law, corporations, individuals, and other entities such as schools and colleges are immune from most civil lawsuits for injuries, death or loss of property caused by the exposure to, or the transmission or contraction of, COVID-19. Exceptions exist if there is a showing of reckless, intentional or willful or wanton misconduct resulting in the illness.
- Action item: Employers should continue to enforce COVID-19 workplace protocols in compliance with local, state, and federal health guidelines to mitigate any potential damages or liability.
IN – Extension of PPP Loans
The Paycheck Protection Program (PPP) introduced under the CARES Act provided much-needed relief to small businesses via forgivable loans to cover employee wages, among other things. The new bill secures additional funding and adds over $284 billion to the PPP. The Small Business Administration has 10 days to implement new rules, so further guidance may be forthcoming. The new relief act also specifies that businesses may deduct business expenses paid for with the proceeds of forgiven PPP loans from their taxes.
IN – Unemployment Extension
The second relief package extends unemployment benefits for millions of jobless gig-workers and independent contractors, as well as the long-term unemployed, as follows:
- Individuals in two key pandemic unemployment programs will now receive benefits for another 11 weeks. Plus, those collecting jobless payments will receive a $300 weekly federal supplement through mid-March.
- However, because President Trump did not sign the bill prior to the previous bill’s expiration on Saturday, those in the Pandemic Unemployment Assistance and the Pandemic Emergency Unemployment Compensation programs will likely not receive a payment for the final week of the year. And the $300 federal supplement may only last 10 weeks instead of 11 weeks because states can’t provide benefits for weeks that start before programs are authorized, and the legislation calls for the extra payments to end on March 14.
IN – Extended Eviction Protection
The relief package also extends the national ban on evictions put in place by the Centers for Disease Control and Prevention until January 31 and provides $25 billion in emergency rental assistance for those who lost their sources of income during the pandemic.
IN – Direct Assistance Payment
The second round of stimulus checks will be issued for $600 per individual adult with adjusted gross income on 2019 tax returns of up to $75,000 per year, heads of households making up to $112,500, and $1200 per couple (filing jointly) earning up to $150,000. The amount phases out for those earning over those thresholds. Those with children aged 16 and under claimed on the 2019 tax return qualify for an additional $600 per child.
Should you have any questions in regard to the content of this alert, please do not hesitate to reach out to Critchfield and allow our experienced attorneys to assist you.