On March 27, 2020, President Trump signed into law the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). This massive piece of federal legislation is aimed at providing relief to both individuals and businesses affected by the COVID-19 pandemic.
While many portions of the bill have made headlines in recent days, such as individual stimulus payments and economic relief for big businesses, several provisions will have a significant impact on employers here in Nevada. Some of the important provisions of the law include:
Unemployment Insurance Assistance
One key provision of the law is the expansion of unemployment insurance. The CARES Act expands unemployment assistance by and through the creation of a Pandemic Unemployment Assistance program that will last through December 31, 2020. Under the program, covered individuals who are unemployed, partially unemployed, or are unable to work due to COVID-19 between January 27, 2020 and December 31, 2020, are eligible for unemployment benefit assistance.
This benefit is in addition to the unemployment benefits an individual is receiving through Nevada’s Unemployment Insurance program.
Qualifying individuals are eligible for $600 per week for up to four months, until July 31, 2020. While the additional $600 benefit is only available for the first four months of the program, the period an individual may receive unemployment benefits was expanded to 39 weeks instead of the typical 26 weeks provided under Nevada law.
Additionally, the CARES Act expanded the pool of individuals who are eligible for unemployment benefits to include self-employed individuals, gig workers, independent contractors, and those with limited work history.
Financial Assistance to Individuals
The most oft talked provision of the CARES Act is the one-time cash rebates paid to qualifying individuals. Under the CARES Act, qualifying individuals will receive a tax credit of $1,200 for individual taxpayer (with an income less than $75,00) or $2,400 for joint taxpayers (with an income less than $150,000), plus $500 for each child of the taxpayer.
Importantly, these rebates are not taxable income for the recipients as they are a credit against tax liability. Tax returns from either 2018 or 2019 will generally be used to calculate the rebates.
Amendments to the Families First Coronavirus Response Act
Notably, the CARES Act also made certain amendments to the recently passed Families First Coronavirus Response Act (FFCRA). Specifically, the CARES Act provides that any employee who had worked for at least 30 days and were subsequently laid off on or after March 1, 2020, and rehired, do not need to work an additional 30 days to meet the requirements for emergency paid sick leave or emergency FMLA under the FFCRA.
Additionally, the CARES Act precludes the use of intermittent emergency paid sick leave. This means that the employer’s requirement to provide emergency paid sick leave ends once the employee has used the full 80 hours (for full-time employees) or when the employee returns to work, whichever comes first.
Lastly, the CARES Act allows for employers to obtain tax credits earlier to cover the cost of paid leave under FFCRA by withholding employment tax deposits. Employers doing so will not be penalized.
Business Loans
One of the hallmarks of the CARES Act is the provision of loan support to small businesses through loans administered by the Small Business Administration (SBA). These loans are designed to help employers cover payroll costs and other expenses during the COVID-19 crisis.
These loans can be subject to forgiveness if the loan amount is equal to the amount of qualifying costs spent during an eight-week period after the origination of the loan. Those costs include payroll costs (not to exceed $100,000 per employee), interest on secured debt obligations, and rent and utilities in place prior to February 2020.
The Nevada Association of Employers is working hard to bring you up-to-date information about the COVID-19 pandemic and how to navigate the new laws affecting Nevada Employers. If you have any questions, please do not hesitate to contact us.
