The House just voted to pass the estimated $2 trillion stimulus package to stabilize the U.S. economy during the COVID-19 pandemic. The Senate unanimously passed the Coronavirus Aid, Relief, and Economic Security Act (“Act”) on March 26th. Congress worked in conjunction with the White House to pass this third phase of legislation, and it is expected that President Trump will enact it later today. The Act is the next phase of the federal government’s effort to stimulate the economy as it responds to the COVID-19 pandemic.

    Here are the main takeaways from the Act:

• Amends the Emergency Family and Medical Leave Expansion Act by defining an eligible employee to include one who (1) was laid off on or after March 1st (2) had worked at least 30 days within previous 60 days before the layoff, and (3) has been rehired;
• Provides payroll-tax relief for businesses that continue to employ workers through the COVID-19 pandemic by allowing businesses to defer their payroll taxes to allow them to continue paying wages;
• Creates a refundable payroll tax credit of up to $5,000 for each employee on payroll when certain conditions are met;
• Businesses with 500 or fewer employees that retain and pay wages through the COVID-19 pandemic are eligible for emergency loans to cover costs of payroll, operations, and debt service, and provides that the loans be forgiven in whole or in part under certain circumstances;
• Creates a loan and loan guarantee program for businesses that employ between 500 to 10,000 employees to ensure their solvency through the crisis. These business loans would be charged an interest rate of no higher than two percent and would not accrue interest or require repayments for the first six months. Companies accepting the mid-size business loans must retain at least 90 percent of their staff at full compensation;
• Expands unemployment insurance and requires the federal government to give unemployed individuals an extra $600 a week for four months on top of their state benefits;
• Provides direct payments to individuals of $1,200 plus $500 per child if the individual is within the adjusted gross income caps;
• Suspends 10% early distribution penalty for distributions up to $100,000 from retirement accounts made between January 1st to December 31st to taxpayers under age of 59 ½ who test positive for COVID-19 or SARS-CoV-2 for coronavirus related expenses;
• The Department of Defense will obtain $1.2 billion to pay for the National Guard’s COVID-19 pandemic response;
• Creates a public health and social emergency fund to reimburse health care providers for expenses and lost revenues related to the COVID-19 pandemic. Hospitals would obtain $65 billion in reimbursements. The legislation also boosts reimbursements by 20% for institutions treating Medicare patients diagnosed with COVID-19;
• Protects individuals from foreclosures and evictions. Specifically, any individual facing financial hardship due to COVID-19 pandemic shall be given forbearance on a federal backed mortgage loan of up to 180 days. Foreclosure proceedings may not begin until May 18, 2020; and
• Suspends payments on federal student loans without penalty through September 30th, and ensures that no interest will be accrued on the federal student loans while payments are suspended.

    We are continuing to monitor the COVID-19 coronavirus pandemic. With the next phase of legislation passed by Congress to respond to the COVID-19 pandemic expected to be enacted today, employers are urged to assess the effects the stimulus package will have on its operations and workforce.

    We are here to guide you through the phases of legislation enacted by the federal government in responding to the COVID-19 pandemic. If you have any questions about the Coronavirus Aid, Relief, and Economic Security Act, please feel free to contact Kemp Smith at 915-533-4424.