President Trump has signed Coronavirus Aid, Relief, and Economic Security Act (CARES Act), a $2 trillion economic stimulus package designed to help employees and businesses survive the economic impact of Covid-19.
Much of the act relates to direct payment and loans but there are sections that affect employers and employees alike.
Small Business Loans The CARES Act gives employers the following options and benefits, which may allow them stay open and keep more people employed:
· Emergency Grants:Small businesses may be eligible for emergency grants of up to $10,000 to cover immediate operating costs.
· Loans:The Small Business Administration (SBA) may provide loans of up to $10 million per business; any portion of that spent to pay employees, keep workers on payroll, or pay for rent, mortgages, or existing debt could be forgiven, provided workers remain employed through the end of June.
· Tax Credits:Businesses who have experienced a decline in gross receipts of 50% as compared to the same quarter of 2019 or who have been fully or partially shutdown by order may be eligible to receive a refundable tax credit for 50% of qualified employee wages up to $10,000 per employee. This is unrelated to the dollar-for-dollar payroll tax credit that can be taken for FFCRA leaves.
· Payroll Tax Deferment: Businesses may defer payment of employer payroll taxes imposed between the enactment of this law and December 31, 2020 with half of the deferred taxes due by December 31, 2021 and the rest due by December 31, 2022. This is unrelated to the dollar-for-dollar payroll tax credit that can be taken for FFCRA leaves.
We encourage you to follow the IRS Coronavirus Tax Relief page and the SBA Coronavirus Loan Resources page, as well as consult with your tax professional or financial advisor for how this may affect your business. Impact on Unemployment Insurance The act expands unemployment benefits by 13 weeks and adds $600 to the weekly amount an individual would usually receive.While these unemployment benefits are generous, employers should still consider their options and incentives under the CARES Act mentioned above before making decisions about reduced hours, furloughs, or layoffs. Employees who experience reduced hours, furloughs, or layoffs should be encouraged to file for unemployment insurance as soon as possible. We recommend that both employers and employees visit their state’s unemployment insurance department website and track local and state news, as departments across the country are updating their rules to facilitate displaced workers during this time.
Artemiste is committed to helping our clients navigate through these ever-changing HR challenges. We will continue to publish updates as they become available and are available to answer any questions during the crisis and beyond.
Discover Our Expertise - Artemisteoffers a wide range of Human Resources services to help your business needs. We understand the challenges employers are facing and will work with you to ensure you have the best guidance and tools available. Contact us today for a complimentary consultation
Aisling Byrne, SHRM-SCP, CEBS, CMS, CPLPis the CHRO and CTLD at Artemistewhere creating great places to work is our passion. Ms. Byrne is a frequent contributor to the Artemiste blog on many topics including onboarding, talent development, performance management, compensation planning, employee engagement, total rewards and learning and development.
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