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Employment Law Implications of the CARES Act

The Coronavirus Aid, Relief, and Economic Security (CARES) Act is best known for the stimulus checks that most Americans have received to help mitigate the economic effects of the COVID-19 epidemic. But within the legislation are several items that are important for employers and employees to know about, including workers who have been laid off.

The CARES Act includes several provisions about sick leave and family and medical leave. The following apply to companies with less than 500 employees and certain public employers, effective through December 31, 2020:

  • Employees who were laid off on March 1 or later and then rehired by the same company are immediately eligible for emergency Family and Medical Leave Act (FMLA) leave. The usual 30-day waiting period is waived.
  • Self-employed people can obtain a payroll tax credit advance for payment of emergency FMLA leave or emergency paid sick leave.
  • Employees who take emergency FMLA leave can receive $200 per day, up to $10,000 total.
  • Employees under government- or doctor-ordered quarantine are entitled to emergency paid sick leave of $511 per day, up to $5,110 total.
  • Employees caring for someone else who is under quarantine or who have to stay home to care a for a child due to school or daycare closure is entitled to emergency paid sick leave of $200 per day, up to $2,000 total.

Expanded unemployment insurance is also provided by the CARES Act. This expansion takes three forms:

  • Pandemic unemployment assistance (PUA) — This grants unemployment eligibility to self-employed workers and independent contractors.
  • Pandemic unemployment compensation (PUC) — All unemployment recipients receive an extra $600 per week through July 31. This occurs automatically, and no action need be taken.
  • Pandemic emergency unemployment compensation (PEUC) — This increases the unemployment limit from 26 weeks to 39 weeks.

For employers, the CARES Act provides a Paycheck Protection Program (PPP) to help cover payroll and other costs. PPP loans are made by the Small Business Administration and turn into grants as long as a certain percentage of the money is used to retain employees. Employers can also get an Employee Retention Payroll Tax Credit for 50 percent of wages (up to $10,000 per employee) paid in each quarter during the pandemic.

The New York law firm of Maduegbuna Cooper LLP advises employees and employers on all COVID-19-related issues. If you have any questions about the CARES Act, our employment law attorneys are ready to answer them. Call 212-232-0155 or contact us online to schedule a free initial consultation.

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