CARES Act for Economic Relief Signed into Law

The Coronavirus Aid, Relief, and Economic Security Act (CARES) passed in the Senate late Wednesday night on a unanimous vote, and the House passed it Friday morning. President Trump signed it Friday afternoon. The act provides $2 trillion in various programs intended to support workers and provide relief for the U.S. economy.

The legislation includes direct payments to individuals and families, federally backed loans for businesses, expansion of unemployment insurance, and more than $100 billion sent directly to U.S. hospitals fighting the COVID-19 pandemic.

Key provisions of the act include:

Small Business Loans

$350 billion will be available for small businesses (under 500 employees), for loans up to $10 million. These collateral-free loans can be used for payroll, paid leave, health care benefits, rent, utilities, etc. The loans can also be used by self-employed and sole proprietors, and independent contractors. Loans can be eligible for forgiveness if they meet specific criteria.

Direct Payments to Individuals and Families

Checks will be sent to middle class and lower income adults, including $1,200 per individual with income under $75,000, and $500 per child. They are expected to be distributed in mid- to late April.

Extended Unemployment Insurance

The unemployment insurance program for laid-off workers is extended to allow four months of full pay rather than the usual three months, and raises the maximum unemployment insurance benefit by $600 per week. This applies to workers in large and small businesses, independent contractors, and the self-employed.

Employer Payroll Tax Credit

A refundable payroll tax credit for employers who continue to employ workers. The 50% credit offsets the employer's share of Social Security taxes up to $10,000 of qualified wages per employee. Qualified wages differ depending on employers’ size: for those with more than 100 full-time employees, these are wages paid when employees are not working due to COVID-19. For those with fewer than 100 full-time employees, all employee wages qualify for the credit. Payroll and corporate tax payment deadlines will also be extended.

Health Care System Support

More than $150 billion will go to hospitals, researchers, and suppliers of key medical equipment and Personal Protective Equipment (PPE). $100 billion will go directly to hospitals and the health system.

State and Local Government Support

$150 billion will go to state and local governments to help with costs related to the pandemic.

There are also provisions for adjustments in retirement accounts and charitable contributions, as well as student loan payment deferrals and a temporary ban on evictions.

This bill is in addition to H.R. 6201, Families First Coronavirus Response Act, which cleared the House last week and passed in the Senate this week.

The full legislation is available here: https://www.congress.gov/bill/116th-congress/senate-bill/3548/text

Questions about how your business would be affected by the new law? We are ready to help you work through this challenging time, and protect you, your business, and your employees and community. Please contact one of our Employment, Healthcare, or Government and Municipal Law attorneys via email, or call us at 859-255-8581.