Congress' COVID-Relief Package Bill
On Monday, December 21, 2020, Congress passed a $2.3 trillion COVID-relief package. The President signed the COVID-relief package on December 27, 2020, enacting the bill into law. The relief package provides several major benefits to small businesses and individuals in response to the ongoing COVID-19 crisis.
The relief package revives aspects of the CARES Act to aid small businesses. It renews the Payroll Protection Program for small businesses with 300 or fewer employees, providing additional loan opportunities for businesses, provided that the loans go to paying their employees. The Payroll Protection Program runs through March 31, 2021. It also expands the forgivable expenses under the Payroll Protection Program to include supplier costs, investments in facility modifications, and personal protective equipment. It is worth noting that, while the Payroll Protection Program was helpful for some industries that were able to provide services throughout the pandemic, other industries, like the hospitality industry, did not benefit as substantially from the Payroll Protection Program because there was not enough work for employees, even if their payroll was protected. So, it is likely that this revival of the Payroll Protection Program will only help certain industries able to continue providing services during the pandemic.
The relief package also provides unemployment assistance. It extends the time period for all pandemic unemployment insurance programs until March 14, 2021. It also increases the unemployment insurance benefits by $300 per week. This increase would raise Louisiana’s unemployment insurance amount to $547. The relief package also provides $1 billion to States for technology modernization and fraud prevention within their unemployment insurance systems. This $300 increase in unemployment insurance is half of the previous unemployment insurance increase at the start of the pandemic, which received criticism from business owners who were unable to convince employees to return to work because some employees made more money on unemployment than they did in their positions prior to the pandemic.
In addition to unemployment, the relief package provides individual income assistance by providing a direct stimulus check of $600 for each adult and child, with this amount decreasing for individuals with over $75,000 in income and couples with over $150,000 in income. This benefit has received criticism from members of both sides of the political spectrum. Although the President criticized this $600 amount as too low, he conceded and signed the bill into law on December 27th.
Some areas that were expected to be addressed are not in the current relief package. The COVID-relief package did not extend the Families First Coronavirus Response Act, which expired on December 31, 2020. However, the relief package extends the payroll tax credits to employers if they voluntarily provide paid leave to their employees for reasons covered by the FFCRA. This extension of the payroll tax credit expires March 31, 2021. Also, the relief package does not include additional protections for employers regarding liability for potential claims of COVID-19 exposure from customers or employees. A limited immunity from liability for COVID-19 exposure claims was initially discussed by Congress, however, it is not likely that the incoming Executive Administration would consider such a provision.
The major aspects of this bill, including the Payroll Protection Program and payroll tax credit extensions, are set to expire on March 31, 2021. It is very likely that the incoming White House Administration will have more on its legislative agenda in response to COVID-19. Breazeale, Sachse, and Wilson will continue to watch for developments of Federal COVID-19 relief. Employers should continue to follow the Federal government’s response to COVID-19 and anticipate additional changes shortly after the new White House Administration steps in on January 21st.