Federal Relief – The White House, Senate Republicans and House Democrats appear to be at an impasse and time is of the essence. Unemployment programs are running out of money and regardless of when another bill is approved by Congress, there will be a gap in the distribution of benefits in many states. It’s also worth noting that the enhanced unemployment benefit authorized in earlier relief bills has now expired. Meanwhile, economic indicators continue to show the economy is in the midst of an unprecedented downturn.
Included below are the key provisions of the Republican proposal, which differs dramatically from the Democratic proposal which was released many weeks ago:
- Worker Compensation: Unemployment Benefits and Stimulus Checks
The proposed bill would provide a weekly $200 federal unemployment benefit add-on for two months, down from the current $600/wk set to expire this Friday. Starting in Oct., this flat benefit would be converted to a federal add-on (up to $500), which would replace 70 percent of lost wages when added to existing state unemployment benefits. The bill would also provide another round of stimulus checks, up to $1,200 for individuals and $2,400 for married couples, with the same eligibility requirements as the CARES Act. The bill would also provide $500 for dependents, regardless of age.
The two most important provisions related to tax relief are an expanded Employee Retention Tax Credit (ERTC) and expanded Work Opportunity Tax Credit (WOTC). The ERTC would be increased to 65 percent, up from 50 percent. This tax credit is available to employers for wages paid to employees if they have had to partially or fully suspend their business OR if they have seen a significant decline in gross receipts. The required decline in gross receipts for eligibility would be reduced to 25 percent, down from 50 percent. The maximum amount of qualified wages would be increased to $30,000 this year, up from $10,000. Finally, the threshold for employees under which all wages are qualified for the credit for working employees – not just furloughed employees – would be raised to 500, up from 100. The WOTC would be expanded to include qualified COVID unemployment insurance recipients hired prior to Jan. 1, 2021. The credit amount applicable to this new group would be 50 percent of the first $10,000 in first-year wages. We have long been supportive of WOTC enhancements, as more people are certified through the program in our industry than nearly any other.
Also of note, a tax credit referred to as the Safe and Healthy Workplace Tax Credit would establish a refundable payroll tax credit equal to 50 percent of an employer’s qualified employee protection expenses. These include personal protective equipment, contactless payment equipment, cleaning supplies, COVID testing for employees, and qualified workplace reconfiguration expenses. Each quarter, the credit cannot exceed the cap based on the number of employees. The cap is equal to $1,000 for each of the first 500 employees, plus $750 for each employee between 500 and 1000, plus $500 for each employee that exceeds 1,000. The credit would be available retroactive to Mar. 12, 2020, and run through Jan. 1, 2021.
- Paycheck Protection Program II (PPP II) and Recovery Loans
Eligibility for the PPP II is limited to businesses that meet the applicable SBA revenue size standard, or have no more than 300 employees, and can demonstrate a 50 percent drop in gross revenues. The program would be slightly modified in other respects. Loan amounts capped at $2 million would be calculated by multiplying the average total monthly payment for payroll the year before the loan origination date by 2.5 with a 60/40 cost allocation to payroll and non-payroll costs to receive full forgiveness. The legislation would also establish low-cost loans to help small businesses and seasonal businesses in lower-income areas, according to census data. They would be available to employers with no more than 500 employees that can demonstrate a 50 percent reduction in gross revenues and meet the applicable SBA revenue size standard. Loans would be available up to twice the borrower’s annual revenue, capped at $10 million. The loans would have a 100 percent SBA guarantee, and a maturity of up to 20 years with a one percent fixed interest rate.
The bill includes temporary, targeted liability protections for employers, who are making “reasonable” efforts to follow public health guidelines, against personal injury claims related to actual or alleged exposure to COVID-19. Under the bill, individuals have one year from the date of “actual, alleged, feared or potential for exposure” to file a civil suit. It states that the liability shield is retroactive to Dec. 1, 2019 and will remain in effect until either Oct. 1, 2024, or the end of the national public health crisis. The bill preempts all state laws that impose liability for exposure-based claims on broader grounds.
California – The governor announced he has no plans to delay the pending increase in the state minimum wage to $14/hr scheduled for Jan. 1, 2021 and then to $15/hr by 2022.To Access Align's Analysis: Log In or Subscribe
Colorado – The state labor department announced it will hold hearings in late Aug. to consider making inflation-related adjustments to the state’s minimum wage.To Access Align's Analysis: Log In or Subscribe
DoorDash – The Australian subsidiary of the delivery platform reached an agreement with a transportation union to provide pandemic-related paid leave to their drivers. While it has no bearing in the United States, it is a notable precedent in the ongoing conversation around independent contractors and portable benefits.To Access Align's Analysis: Log In or Subscribe
NLRB – The National Labor Relations Board released a proposed rule this week that would make it harder for union organizers to obtain employee contact information.To Access Align's Analysis: Log In or Subscribe
Restaurant Opportunities Center (ROC) – ROC released two new reports within the past few weeks and announced a new policy campaign, the Right-to-Return Project.To Access Align's Analysis: Log In or Subscribe
Los Angeles County, CA – Next week, the Board of Supervisors will hold a hearing on potential legislation to require food handling certification for delivery drivers.To Access Align's Analysis: Log In or Subscribe
Alaska – The Alcoholic Beverage Control Board extended until Nov. 15 the temporary allowance of curbside pickup of alcohol and delivery of beer and wine when included with an order of food.To Access Align's Analysis: Log In or Subscribe