Day-to-day life has been dramatically impacted by the coronavirus disease 2019 (COVID-19), and many businesses have been forced to close or limit their service to slow the spread of COVID-19. In response, Congress has passed several pieces of legislation to assist individuals and businesses affected by the virus.

The Families First Coronavirus Response Act

The Families First Coronavirus Response Act (FFCRA) was signed into law on March 18, 2020. The Act requires employers with less than 500 employees to provide both emergency paid sick leave (EPSL) and emergency leave under the Family and Medical Leave Act (EFMLA). Both types of leave are available during the period from April 1 through December 31, 2020 as follows.

  • Emergency Paid Sick Leave (EPSL): Employees are entitled to two weeks of EPSL if they are unable to work, including telework, for specific reasons related to Covid-19. The EPSL benefit is 80 hours of pay that is subject to caps based on the reason for leave.
  • Family and Medical Leave Act (EFMLA): An employee is entitled to twelve weeks of leave under the EFMLA only if the employee is unable to work due to a need to care for a child under 18 years of age whose school or daycare provider has been closed due to Covid-19. The first two weeks of this leave are unpaid, but eligible employees can take their EPSL pay during these two weeks. For weeks 3-12, the employee receives 2/3rds of regular pay, subject to the same statutory cap as EPSL. The employee may not be terminated during this twelve-week period.

Employers will receive payroll tax credits and/or refunds for the full amount of EPSL or EFMLA pay they provide to employees. A more detailed discussion of the Families First Coronavirus Response Act can be found here.

The Coronavirus Aid Relief and Economic Security Act

The Coronavirus Aid Relief and Economic Security Act (the CARES Act) passed and was signed into law on March 27, 2020. This bill will apportion over $2 trillion to help counter the economic and health impacts of the pandemic. This bill will send checks directly to eligible individuals and families, provide loans to small businesses and non-profits (500 employees or less), and assist certain industry sectors and allocates funding for state and local governments. Key provisions of the CARES Act are discussed here.

  • SBA and Treasury direct lending programs

For small businesses, generally with 500 or fewer employees, there are two programs regulated by the U.S. Small Business Administration (SBA): (1) a new loan program under the Paycheck Protection Program (PPP), and (2) an expanded program of Economic Injury Disaster Loans (EIDL). The CARES Act extends eligibility for PPP and EIDL beyond typical SBA-defined small businesses to include, qualified 501(c)(3) nonprofits, 501(c)(19) veterans’ organizations, and sole proprietors and independent contractors.

Under the PPP, eligible borrowers may qualify to receive a loan in the amount of 2.5 times their average monthly payroll to meet certain defined short-term operational cashflow needs up to $10 million. PPP loans have favorable terms and are eligible for partial forgiveness. Although affiliation rules typically prevent many private equity-sponsored companies from qualifying for SBA loans, the CARES Act waives these rules under the PPP for certain accommodation and food service businesses. Under the EIDL, eligible borrowers who have suffered substantial economic injury may qualify to receive a loan up to $2 million to meet certain working capital needs. Loans typically have favorable terms and payments are deferred for 12 months.

For mid-sized businesses with 500 to 10,000 employees, the CARES Act authorized a new Treasury Direct Loan program. Eligible borrowers may qualify to receive low interest loans to retain at least 90% of their workforce. Borrowers must accept restrictions on the borrower’s ability to increase executive compensation, pay dividends, buy back stock, regulate unions, and outsource jobs. To determine if any of these loan programs may be right for your business, and for a more detailed discussion of SBA and Treasury programs under the CARES Act, please click here. We expect the SBA and Treasury Department to issue regulations on these programs in the next 10-15 days, and we will monitor such regulations and update this discussion.

  • Tax relief 

The CARES Act amended a range of provisions across the Internal Revenue Code, affecting both individuals and businesses. The legislation modifies a number of 2017 Tax Cuts and Jobs Act provisions (relating to net operating losses, alternative minimum tax credit carryforwards, business interest expense limits, excess business loss limits, and immediate expensing of qualified facility improvement costs); enacts a refundable payroll tax credit for employers that retain employees; defers payment of the employer’s portion of payroll taxes; adjusts several aspects of the charitable contribution deduction; implements an exclusion for employer payments of student loans; and suspends a federal excise tax on spirits for those used in producing hand sanitizers. A more detailed discussion of tax relief in the CARES Act, can be found here.

  • Relief for Retirement Plan Participants

The CARES Act provides for retirement plan relief for individuals affected by Covid-19. The relief provisions allow for retirement plan and IRA tax-favored distributions and for certain expanded plan loan limits and repayment postponements. In addition, waivers for 2020 required minimum distributions are provided. A more detailed discussion of relief for retirement plan participants in the CARES Act can be found here.

  • Other Employee Benefit Plan Relief Provisions

The CARES Act provides relief regarding funding requirements and benefit restrictions for defined benefit and cash balance plans. Moreover, educational assistance benefit plans may now cover an employer’s payment of principal or interest on qualified education loans. In addition, the Act also requires group health care plans to cover certain COVID-19 related services, and expands Qualified Medical Expenses to include over-the-counter drugs without a prescription for the purposes of healthcare FSAs, HSAs, HRAs and Archer MSAs.  A more detailed discussion of other employee benefit plan relief provisions in the CARES Act can be found here.

Disclaimer: This Blog/Web Site is made available by the law firm of Liskow & Lewis, APLC (“Liskow & Lewis”) and the individual Liskow & Lewis lawyers posting to this site for educational purposes and to give you general information and a general understanding of the law only, not to provide specific legal advice as to an identified problem or issue. By using this blog site you understand and acknowledge that there is no attorney client relationship formed between you and Liskow & Lewis and/or the individual Liskow & Lewis lawyers posting to this site by virtue of your using this site. The Blog/Web Site should not be used as a substitute for legal advice from a licensed professional attorney in your state regarding a particular matter.

Privacy Policy: By subscribing to Liskow & Lewis’ E-Communications, you will receive articles and blogs with insight and analysis of legal issues that may impact your industry. Communications include firm news, insights, and events. To receive information from Liskow & Lewis, your information will be kept in a secured contact database. If at any time you would like to unsubscribe, please use the SafeUnsubscribe® link located at the bottom of every email that you receive.

Print:
EmailTweetLikeLinkedIn
Photo of Randye Snyder Randye Snyder

Randye Snyder provides consultation, planning and advice on the tax and ERISA aspects of employee benefit plans (pension, profit sharing, 401(k), deferred compensation, health and welfare), executive compensation, equity-based arrangements and incentive compensation programs. She frequently collaborates with other members of the firm…

Randye Snyder provides consultation, planning and advice on the tax and ERISA aspects of employee benefit plans (pension, profit sharing, 401(k), deferred compensation, health and welfare), executive compensation, equity-based arrangements and incentive compensation programs. She frequently collaborates with other members of the firm on the ERISA and employee benefit aspects of company mergers and acquisitions and other sophisticated business transactions, as well as employee benefit plan mergers, combinations and terminations in general and when arising in connection with company reorganizations.

Photo of Nina Skinner Nina Skinner

Nina Skinner counsels privately-held and publicly-traded corporations, start-up companies and nonprofit organizations in various stages of business transactions.

Photo of Kindall C. James Kindall C. James

Kindall James is a labor and employment lawyer who helps her clients resolve difficult HR and personnel issues that run the gamut from employees sending inappropriate emails, text messages, and strange pictures to one another, to more serious issues involving workplace violence and…

Kindall James is a labor and employment lawyer who helps her clients resolve difficult HR and personnel issues that run the gamut from employees sending inappropriate emails, text messages, and strange pictures to one another, to more serious issues involving workplace violence and threats.  She counsels employers, business owners and managers, and defends them in a wide variety of employment-related disputes in the state and federal courts of Texas and Louisiana.  This includes defending employers against claims under the Fair Labor Standards Act, Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act, the Americans with Disabilities Act (ADA), ERISA, and other federal and state laws. Kindall also handles claims involving non-compete agreements, trade secrets, and unfair trade practices and competition.

Photo of John C. Anjier John C. Anjier

John Anjier is a business and litigation lawyer and adviser representing and assisting clients with securities regulation, corporate and business transactions, and securities, white collar, and professional liability litigation.   “My 25 years of securities and white collar experience, gives me a unique and…

John Anjier is a business and litigation lawyer and adviser representing and assisting clients with securities regulation, corporate and business transactions, and securities, white collar, and professional liability litigation.   “My 25 years of securities and white collar experience, gives me a unique and valuable perspective in crafting solutions for clients to meet their business and regulatory needs.  I have seen what happens firsthand when the documents for the deal or the filing with the SEC contains mistakes.  This combination gives me a sense of how to help put a deal together more efficiently and effectively.”

Photo of John T. Bradford John T. Bradford

John Bradford practices energy and natural resources taxation, finance, and corporate law at the state, federal, and international levels. He advises clients on the tax and business consequences of specific acquisitions, dispositions, financings, joint ventures, hedging activities, and day-to-day business operations.

Photo of Jeffrey P. Birdsong Jeffrey P. Birdsong

Jeff Birdsong is an associate in the firm’s New Orleans office, practicing in the areas of nonprofit law and federal, state, and local taxation.

Jeff helps individuals and companies analyze tax consequences for an array of transactions and works to resolve individual and…

Jeff Birdsong is an associate in the firm’s New Orleans office, practicing in the areas of nonprofit law and federal, state, and local taxation.

Jeff helps individuals and companies analyze tax consequences for an array of transactions and works to resolve individual and corporate income tax, franchise tax, property tax, and sales tax disputes.

He also counsels nonprofit and tax-exempt organizations in obtaining tax exemptions, structuring internal governance, and planning related to intermediate sanctions and unrelated business income.

Photo of C.J. Miller C.J. Miller

C.J. Miller is a business lawyer in the firm’s Lafayette office, with experience practicing in the areas of commercial finance, secured transactions, commercial real estate, general business law, and estate planning and succession administration.

Photo of Thomas J. McGoey II Thomas J. McGoey II

Tommy is the leader of the firm’s commercial litigation practice group and a member of the firm’s Board of Directors. He is a go-to labor and employment lawyer with experience throughout Louisiana and the U.S. With his nearly 35 years of experience, he…

Tommy is the leader of the firm’s commercial litigation practice group and a member of the firm’s Board of Directors. He is a go-to labor and employment lawyer with experience throughout Louisiana and the U.S. With his nearly 35 years of experience, he helps employers across a wide range of industries with contentious human resources claims and issues, both inside and outside the courtroom. Most recently, he has guided employers through a range of concerns related to the COVID-19 pandemic.

Photo of Madeline Thomas Madeline Thomas

Madeline is a business lawyer in the firm’s Houston office and handles a variety of transactional matters, including real property acquisitions and divestitures and sophisticated oil and gas projects, both onshore and offshore.  She has represented clients in all phases of energy exploration…

Madeline is a business lawyer in the firm’s Houston office and handles a variety of transactional matters, including real property acquisitions and divestitures and sophisticated oil and gas projects, both onshore and offshore.  She has represented clients in all phases of energy exploration, development, and production, ranging from lease drafting to complex litigation.

Photo of Kelly Brechtel Becker Kelly Brechtel Becker

Kelly Becker is a litigator whose appellate practice regularly includes cases before the Louisiana courts of appeal, the Louisiana Supreme Court, and the United States Fifth Circuit Court of Appeal. Her practice focuses on complex litigation, including environmental, energy, and commercial matters.  Based…

Kelly Becker is a litigator whose appellate practice regularly includes cases before the Louisiana courts of appeal, the Louisiana Supreme Court, and the United States Fifth Circuit Court of Appeal. Her practice focuses on complex litigation, including environmental, energy, and commercial matters.  Based on her experience, Kelly is frequently retained to write amicus briefs on behalf of businesses and trade organizations in matters of industry-wide significance. Kelly is certified by the Louisiana Board of Legal Specialization as an Appellate Practice Specialist. She is one of only thirteen lawyers in the state of Louisiana with this designation.