Please visit our COVID-19 resources page with more information for business owners and employees.
On Wednesday, March 25, the Senate passed the Coronavirus Aid, Relief, and Economic Security Act, or CARES Act.
This bill is meant to help alleviate the burden of COVID-19 for both businesses and workers.
While this Act still has to travel through House approval and be signed by the President before it becomes law, there are a few provisions we’d like to explore now.
The CARES Act will provide assistance for small businesses, financial aid to the healthcare system, as well as provide financial assistance to Americans within a certain income level and expand unemployment insurance. We’ve broken down a few aspects of the bill that could potentially affect your business and employees.
How it affects businesses
The CARES Act will provide financial assistance opportunities for businesses with fewer than 500 employees impacted by the COVID-19 pandemic.
In order to be eligible for loan, a business must:
- Have been in operation on 02/15/2020
- Have paid employees or 1099 contractors
- Make a “good faith certification that the uncertainty of the current economic conditions are making a loan necessary & it’s necessary to support the business’s ongoing operations.”
- Acknowledge funds will be used to retain employees, make payroll, and pay a mortgage, lease, or utility payment.
Loan amounts will be 2.5 times the business’ average monthly payroll for the last 12 months. This loan program has a few notable benefits including: non-recourse loans, no personal guarantee needed, no required collateral, no fees, and no obligations to seek other loan sources.
A potential highlight of the bill also includes loan forgiveness for the amounts used for payroll, mortgage, and lease payments.
How it affects unemployment
The CARES Act also includes relief for individuals affected by COVID-19, including an expansion of unemployment insurance. Under the bill, unemployment benefits would increase up to $600 each week for four months and extend up to 13 weeks past the typical 12-28 weeks.
The bill also expands benefit eligibility so individuals who wouldn’t typically be eligible, like contractors or self-employed workers and those who are partially unemployed, can receive benefits.
These are just two of the changes you’ll see if the CARES Act passes. We’ll cover the other details and any changes as soon as it is signed into law.
If you have questions about how this bill could impact your business and your employees, contact your HR business partner or call us at 888.811.5150. We’re happy to help!
