Legal Alert: CARES Act Amendment

Posted: 12/29/2020 | Employment, Business, COVID-19

Now that H.R. 133, the Coronavirus Response and Relief Supplemental Appropriations Act of 2021 (the “Act”), has been signed into law, many are asking “what does it mean for my business?” The focus of many news outlets is relief checks to individuals, rent assistance, and unemployment. You should know that, once again, small businesses (under 500 employees) were included, as well.

This includes $284 billion for additional Paycheck Protection Program Loans (“PPP” Loans). Businesses that received a loan the first time around may be eligible for a second loan if:

  1. They have less than 300 employees (this includes affiliate companies);
  2. They have used all of the original loan received; and
  3. The business sustained at least a 25% loss in any quarter of 2020.

Unlike the original $10 million loan available to first time borrowers, second loans are capped at $2 million.

One looming concern for small businesses has been the Families First Coronavirus Relief Act (“FFCRA”), which encompasses the Emergency Paid Sick Leave Act (“EPSLA”) and the Emergency Family Medical Leave Expansion Act (“EFMLEA”). If you are my client, we have probably spent some time over the past year discussing leave issues related to the FFCRA.

Unfortunately, like the original CARES Act, the supplement is vague in areas that will require more clarity. Until the Department of Labor gives us additional guidance, here is what we know:

  • Small business tax credits for paid leave pursuant to the EFMLEA and EPSLA have been extended through March 31, 2021;
  • The Act does not extend the mandatory leave provisions of the EFMLEA and EPLSA for private employers; and
  • The Act does not offer additional leave or renewed leave that would not otherwise be renewed under the traditional Family Medical Leave Act.

In sum, if an employer chooses to offer paid leave to an employee pursuant to the EPSLA or EFMLEA and that employee has not already exhausted their paid leave under the same, the employer is still eligible for a tax credit through March 31, 2020.

Many speculate there may be additional changes to the Act in 2021. As information becomes available, we will keep you up to date.

Additional information:
H.R. 133
Summary from Congress
Summary from The National Conference of State Legislatures

If you have questions, please reach out to me or your Rothberg attorney.

Rachel J. Guin, Partner|[email protected]

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