After months of deliberation and endless negotiation, Congress sealed the deal late Sunday night on a $900 billion COVID-19 economic relief package, finally delivering long-overdue help to businesses and individuals. While much of the relief seems to be an extension of benefits and rights afforded under the previously passed Coronavirus Aid, Relief, and Economic Security (CARES) Act in March, there are some notable variations that employers should be aware of. The following summary outlines 3 key provisions employers need to know and should plan for immediately.
- FFCRA Expires at the End of the Year
The Families First Coronavirus Response Act (FFCRA) was signed into law on March 18, 2020. Generally, the 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. When FFCRA went into effect, the paid sick leave entitlements were set to expire on December 31, 2020. While many argued that extension of such leave would be critical in the midst of rising COVID-19 cases, the second stimulus bill does not include an extension of the FFCRA. While employees will no longer be entitled to FFCRA leave, the new bill does allow employers to take advantage of FFCRA tax credits on any wages paid through March 31, 2021 (as long as the leave was taken prior to the December 31 expiration date). Thus, employers should prepare for FFCRA leave to expire at the end of the month. Importantly, employers should communicate to employees that leave under the FFCRA will be unavailable starting in the new year and that employees will lose any balance of unused FFCRA leave beginning on January 1, 2021. Employers should ensure continued compliance with applicable state-specific paid sick leave laws and keep apprised of any potential efforts by the incoming Biden administration to extend and / or revisit FFCRA leave.
- No Liability Shield from COVID-19 Lawsuits
Republicans were unable to advance an immunity provision for businesses from coronavirus-related lawsuits. With Democrats strongly opposing any such provision, there were attempts to reach a compromise, including possible immunity only through the end of the year. However, the absence of any such provision in the final bill means that employers may face increasing lawsuits from employees alleging employer responsibility or negligence for COVID-19 infections. It is imperative that employers implement COVID-19 workplace protocols that are in line with local, state, and federal health guidelines—and that measures are strictly enforced in an effort to mitigate any potential damages or liability.
- 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 critical funding and adds over $284 billion to the PPP. The deal also includes a deductibility of PPP loan proceeds, which would allow businesses to deduct expenses paid for with the proceeds of PPP loans from their 2020 taxes. While the new round of PPP loan applications may be met with scrutiny, businesses should begin accounting for expenses and determining the need for a first—or second—PPP loan.
With the full text of the second stimulus bill released just this afternoon, we expect and hope to see additional guidance from federal and state agencies in short order. We will continue to monitor developments as they become available.