
After much haggling, Congress passed its second major COVID-related relief package on December 21, 2020. The $900 billion package is included in the 5,593-page Consolidated Appropriations Act of 2021, which is expected to be signed by President Trump shortly and will provide funding for the federal government between now and the end of the current fiscal year on September 30, 2021.
COVID-related Provisions
The COVID-related provisions include, among other things:
- Direct payments of up to $600 per adult and child, subject to household income limits;
- More than $284 billion for further “second draw” Paycheck Protection Program (PPP) loans;
- $15 billion "in dedicated funding for live venues, independent movie theaters and cultural institutions";
- $300 per week for enhanced unemployment insurance benefits;
- $25 billion for rental assistance and an eviction moratorium extension;
- $82 billion for education providers;
- $10 billion for child care assistance;
- $13 billion in increased Supplemental Nutrition Assistance Program and child nutrition benefits;
- $7 billion to increase broadband-internet access;
- Billions of dollars for COVID vaccine distribution, testing, and contact-tracing efforts; and
- A tax credit "to support employers offering paid sick leave.”
Employer Impacts
Organizations in particular sectors, including air travel, entertainment, real estate, child care, broadband internet and healthcare, should consult with their counsel to determine eligibility for specifically earmarked funds and potential employment implications.
More broadly, the key provisions for employers are likely to be the second-draw PPP loans; enhanced unemployment insurance benefits; COVID vaccine distribution, testing, and contact-tracing funds; and the continued tax credit for paid sick leave and family leave.
Paycheck Protection Program
With regard to the PPP, the package allows certain businesses to take second-draw loans. Those loans will be generally limited to businesses with fewer than 300 employees that have seen gross revenue reductions of at least 25% during the first, second, or third quarter of 2020. The package also reduces the amount a borrower can receive from $10 million to $2 million, gives businesses more flexibility regarding uses for the money, and simplifies the forgiveness process for loans under $150,000.
The bill also includes limitations on loan amounts for seasonal employers and prohibits loans to (among others) any entity “primarily engaged in political or lobbying activities,” any entity in which Chinese or Hong Kong entities own more than 20%, and any entity with a Chinese resident on its board of directors.
In addition, although it provides more flexibility regarding the uses of funds, the bill generally limits forgiveness of the loans to 166.66% of the amount of the loan used for payroll costs. In other words, most employers will still need to spend at least 60% of the loan proceeds on payroll costs in order for 100% of the loan to be forgivable.
Unemployment Benefits
The package includes a $300 weekly federal enhancement in unemployment benefits for 11 weeks, from the end of December 2020 through March 14, 2021. This amount is half of the earlier pandemic-related enhancement, which expired at the end of July. The package also extends two other unemployment programs that were created by the CARES Act in March, both of which were set to expire at the end of this week:
- The Pandemic Unemployment Assistance program expands jobless benefits to gig workers, freelancers, independent contractors, the self-employed, and certain other people affected by the coronavirus; and
- The Pandemic Emergency Unemployment Compensation program provides an additional 13 weeks of payments to those who exhaust their regular state benefits.
Under this bill, both programs will close to new applicants on March 14 but will continue through April 5 for existing claimants who have not yet reached the maximum of 50 weeks.
COVID Testing and Related Provisions
The package also includes numerous health-related provisions meant to address the ongoing COVID pandemic. Among other things, it provides $22.4 billion for the “Public Health and Social Services Emergency Fund,” to be distributed to states, localities, territories, tribes, tribal organizations, urban Indian health organizations, and other health service providers to tribes “for necessary expenses for testing, contact tracing, surveillance, containment, and mitigation, including support for workforce, epidemiology, [or] use by employers...”
It remains unclear exactly how these funds will be distributed by the recipient governments and organizations, but employers may be eligible based on the extent of their involvement in COVID-related testing, contact-tracing, or related efforts.
Notably, it does not appear that this bill includes any changes to current law regarding employer testing relating to COVID, nor does it include any limitations on employer liability, which had been proposed in earlier drafts of the package.
Tax Credit for Paid Leave
Finally, the package extends certain tax credits under the Families First Coronavirus Response Act (the “FFCRA”) for amounts paid by employers from December 30, 2020 to March 31, 2021. Among other things, the package provides a “payroll credit for paid sick leave” for amounts paid by an employer “by reason of the Emergency Paid Sick Leave Act . . .” and a separate “payroll credit for paid family leave” for amounts paid by an employer “by reason of the Emergency Family and Medical Leave Expansion Act.”
Conclusion
Employers may find limited relief in this bill, but the terms are lengthy and complex, and many of the provisions are industry-specific.
Please contact a member of the Labor & Employment Team at Lewis Roca if you have questions or would like to discuss the bill as it applies to your organization and your unique circumstances.
This material has been prepared by Lewis Roca Rothgerber Christie LLP for informational purposes only and is not legal advice. Specific issues dealing with COVID-19 are fluid and this alert is intended to provide information as it is currently available. Readers should not act upon any information without seeking professional legal advice. Any communication you may have with a Lewis Roca Rothgerber Christie LLP attorney, through this announcement or otherwise, should not be understood by you to be attorney-client communication unless and until you and the firm agree to enter into an attorney-client relationship
Tags: COVID-19 Rapid Response Team, Labor and Employment- Partner
David is conscientious about his work quality. His clients rely on his trial experience, trust his tactful approach, and benefit from his drive to win.
David McElhinney, partner in the firm’s Litigation and Labor and Employment practice groups, works with employers helping them ...
- Partner
Howard Cole’s practice includes both traditional labor law and employment law and litigation. His practice is limited to exclusive representation of employers in both the private and public sectors, including gaming, health care, public agencies, construction companies, and ...
- Of Counsel
John Gray is of counsel in the firm’s Litigation Practice Group. With more than a decade of experience in Arizona, California, and other forums across the nation, John has handled a wide range of cases and litigated well over 100 matters to final resolution, including numerous class ...
- Partner
Kris Kostolansky counsels businesses, and represents their interests in court in intellectual property, commercial contract, business tort, and employment law disputes. He works with companies to implement best business practices to avoid litigation and streamline business ...
- Partner
Laura is valued by clients for her strategic and client-centric counsel on matters involving employment law compliance, litigation prevention, and litigation defense.
Laura Pasqualone is a partner in the firm’s Labor and Employment and Litigation practice groups, practicing ...
- Partner
Mary Ellen Simonson has 30 years of experience in representing management in both the public and private sector in all aspects of employment relations. Her practice ranges from advising employers on litigation avoidance strategies and day-to-day issues in the workplace, to advocacy in ...
- Partner
Melanie leads her practice with empathy, expertise, and integrity. Clients benefit from her established practice and extensive legal knowledge and experience.
Melanie Pate, a partner in the firm's Litigation Practice Group, focuses primarily on labor and employment issues. She spent 15 ...
- Partner
Susan Sperber's practice emphasizes labor and employment law, religious institutions law, immigration law, and commercial and corporate litigation.
In the employment arena, Susan provides assistance to clients on a wide range of employment-related issues and has tried cases in both ...
About This Blog
Lewis Roca is immersed in your industry and invested in your success. We share insights and trends that can affect your business.
Search
Topics
Archives
- February 2021
- January 2021
- December 2020
- October 2020
- September 2020
- August 2020
- July 2020
- June 2020
- May 2020
- April 2020
- March 2020
- February 2020
- January 2020
- December 2019
- November 2019
- October 2019
- September 2019
- August 2019
- July 2019
- June 2019
- May 2019
- April 2019
- March 2019
- November 2018
- April 2018
- February 2018
- January 2018
- December 2017
- November 2017
- September 2017
- August 2017
- June 2017
- May 2017
- April 2017
- March 2017
- November 2016
- October 2016
- September 2016
- August 2016
- April 2016
- January 2016
Authors
- Anne Aikman-Scalese
- Alfredo T. Alonso
- Amy E. Altshuler
- Oliver S. Bajracharya
- Edwin A. Barkel
- Trevor G. Bartel
- G. Warren Bleeker
- Brooks Brennan
- Ogonna M. Brown
- Michael W. Cabrera
- Chad S. Caby
- John Carson
- Rob Charles
- Brent R. Cohen
- Howard E. Cole
- Carla A. Consoli
- Ross L. Crown
- Thomas J. Daly
- Pat Derdenger
- Hannah Dolski
- Susan M. Freeman
- Jessica L. Fuller
- John C. Gray, CIPP/US
- Gregory Y. Harris
- Art Hasan
- Frances J. Haynes
- Dietrich C. Hoefner
- Jennifer K. Hostetler
- Marla J. Hudgens
- David A. Jackson
- Aaron D. Johnson
- Kyle W. Kellar
- Eric N. Kniffin
- Kris J. Kostolansky
- Shaun P. Lee
- Glenn J. Light
- Laura A. Lo Bianco
- Karen Jurichko Lowell
- Stanley B. Lutz
- H. William Mahaffey
- Constantine Marantidis
- Michael J. McCue
- David C. McElhinney
- Lindsay L. McKae
- Robert H. McKirgan
- Linda M. Mitchell
- Steven T. Moortel
- Gary J. Nelson
- William D. Nelson
- Laura Pasqualone
- Melanie V. Pate
- David A. Plumley
- Kurt S. Prange
- Stephen Richer
- Robert F. Roos
- Karl F. Rutledge
- Daniel A. Salgado
- Mary Ellen Simonson
- Susan Strebel Sperber
- Jeffrey J. Steffen
- Jan A. Steinhour
- Casey J. Stiteler
- Ryan M. Swank
- Dustin R. Szakalski
- Mary Tran
- Jennifer A. Van Kirk
- Hilary D. Wells, CIPP/US
- Drew Wilson
- Karen L. Witt
Recent Posts
- Arizona Tax 2020 Year in Review
- Board Education and Training for Financial Institutions Are Key Elements of Business Success
- The IP of Everything Podcast - Episode 6 - The IP of Memes
- 2018 Wire Act Reinterpretation Set Aside: First Circuit Court of Appeals Affirms the U.S. District Courts Ruling
- USPTO Increases Trademark and TTAB Fees for 2021
- Congress Passes Second Major COVID-related Relief Package: How Will it Impact Employers?
- Save to Win: Prize-linked Saving Accounts
- EEOC Issues New Guidance to Employers Regarding Mandatory Covid-19 Vaccinations
- URGENT: Widespread Hacking Campaign Could Require Immediate Action
- Ransomware Attack Hits Major Service Provider for Accounting and Healthcare Organizations