*a prior version of this post indicated the House vote was still pending. The House passed this legislation on March 27, 2020.
Like you, we are closely monitoring the rapid developments caused by the COVID-19 pandemic. The latest is Congress passing the Coronavirus Aid, Relief, and Economic Security Act (or “CARES” Act). We focus below on the employment-related provisions of the Act, but encourage you to continue checking our COVID-19 Resource Hub for additional updates on other aspects of the Act.
Direct Payments to Individuals
Under the Act, direct payments of $1,200 will be made to single individuals who earn $75,000 or less in adjusted gross income, and $2,400 to married couples who earn $150,000 or less in adjusted gross income, according to their 2018 tax returns or 2019 tax return if already filed. There will be an additional $500 payment per child. These payments scale down as income increases, phasing out entirely for individuals earning $99,000 and joint filers without children earning $198,000.
Increased Unemployment Benefits
The Act also provides assistance to states to administer and expand unemployment benefits. The Act provides payments of $600 per week (for up to four months) to individuals who qualify for unemployment benefits, which is in addition to the amount the individual would otherwise qualify for. It also extends by 13 weeks the number of weeks for which an individual may receive unemployment benefits, and reimburses states that eliminate the one-week waiting period before benefits are issued. These provisions apply to employees as well as individuals not traditionally eligible for unemployment benefits (including self-employed individuals, independent contractors, those with limited work history, and others) who are unable to work due to COVID-19.
The Act also includes temporary funds to reimburse nonprofits, government agencies, and Indian tribes for half the costs they incur paying unemployment benefits through the end of the year.
Clarification of Emergency Paid Family and Medical Leave
The Act clarifies that employees who worked for at least 30 days, and were laid off on or after March 1, 2020, do not need to wait another 30 days upon rehire before being eligible for emergency paid family and medical leave under the Families First Coronavirus Response Act, which we discussed here.