COVID-19
Federal Relief Bill – The U.S. Congress approved the third federal relief bill, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). The $2 trillion package is specifically designed to provide liquidity to employers, incentivize them to keep employees on payroll and provide direct assistance to workers. Federal agencies will now begin the rulemaking process and the final regulations and guidance are expected in the coming weeks. The legislation has three major components: loans for businesses, tax relief and worker assistance.
Loans: Most small and mid-sized companies can access a loan program managed by the Small Business Administration (SBA) which has been allocated $350 billion. The vast majority of hospitality employers will qualify for the two SBA programs: the Paycheck Protection Program and Emergency Economic Injury Disaster Loans (EIDL). The Paycheck Protection Program loan would equal 250 percent of a borrower’s average monthly payroll up to a maximum of $10 million. The money can only be used for specified purposes: primarily employee compensation / benefits, mortgage / rent payments. The loan will be forgiven if employers maintain their prior staffing levels. The forgiveness amount will be reduced proportionally by the number of employees laid off during this period relative to the borrower’s prior employment levels. For large companies, the Treasury and Federal Reserve have been allocated $454 billion to loan companies in exchange for stock or other forms of equity. This program will operate similar to the TARP program.
Tax Relief: The act provides tax relief in a number of areas. It creates a 50% refundable payroll tax credit for a portion of wages paid by impacted employers. It also allows for the delay of up to 50% of employer payroll taxes. Among other provisions, the legislation addresses a long-time industry priority – providing a technical correction for the qualified improvement of property (QIP).
Worker Assistance: A direct payment of $,1200 will be paid to all U.S. residents who earned under $75,000 with an additional $500 per child. Those making under $99,000 will receive some portion of that amount. The legislation also loosens rules and penalties around accessing retirement funds. Most importantly, the bill bolsters the country’s unemployment insurance program, expanding benefits to more individuals and lengthening the program to 39 weeks. It also provides an additional $600 per week in benefits up to four months.
Tax Deferrals – Last week, President Trump announced that, “the Treasury Department will defer tax payments, without interest or penalties, for certain individuals and businesses negatively impacted.”To Access Align's Analysis: Log In or Subscribe
Shelter-In-Place Orders – Within a week’s span, a number of states followed California and New York issuing shelter-in-place, or stay-at-home orders. The list is up to twenty states: California, Colorado, Connecticut, Delaware, Hawaii, Idaho, Illinois, Indiana, Louisiana, Michigan, Minnesota, New Jersey, New Mexico, New York, Ohio, Oregon, Vermont, Washington, West Virginia, and Wisconsin. Kentucky, Pennsylvania, Maryland, Massachusetts, and Nevada have ordered all nonessential businesses in the state to close. A number of cities have also announced stay-at-home orders as well. Restaurants and grocers have qualified as essential and picking up food or groceries is qualified as a designated purpose. Delivery also has been allowed. Some restaurant operators have been providing their workers letters detailing that they work for an “essential” business.
Price Gouging – State attorneys general this week began focusing their attention on price gouging occurring through online marketplaces. A bipartisan group of thirty-three attorneys general took action against third-party sellers on Amazon, Walmart, Craigslist, Ebay and other sites.To Access Align's Analysis: Log In or Subscribe
Hazard Pay / Protecting Workers – A number of retailers have increased wages for workers. It’s also worth noting that many of these retailers, particularly grocers, are in the midst of hiring workers to handle the surge in customer demand. Grocers and some restaurants have also taken steps to protect workers, installing “sneeze guards,” at checkout counters. More details.
Partnerships – Henrico County, VA is soliciting restaurants to submit applications to provide meals for first responders. In effect, local restaurants will become the county’s commissary for emergency operations. This is a partnership that could be, and should be, replicated across the country.To Access Align's Analysis: Log In or Subscribe
Wages
Hayward, CA – The city council took the first step to delay a planned increase in the local minimum wage to $15/hr effective July 1.To Access Align's Analysis: Log In or Subscribe
Walmart – The company is the latest major retailer to temporarily hike their minimum starting wages in an effort to keep up with record consumer demand.To Access Align's Analysis: Log In or Subscribe
Paid Leave
Labor Department – The agency released a guidance document this week, outlining the details of the paid leave program created by the Families First Coronavirus Response Act (FFCRA). It is scheduled to take effect April 1.To Access Align's Analysis: Log In or Subscribe
Internal Revenue Service – The IRS released guidance this week related to the Families First Coronavirus Response Act (FFCRA), outlining how employer reimbursement related to the new paid leave mandate will work. According to the IRS, “the two new refundable payroll tax credits, designed to immediately and fully reimburse them, dollar-for-dollar, for the cost of providing Coronavirus-related leave to their employees” will be “quick and easy to obtain” either through a deduction in payroll tax liability or a refund by the IRS.To Access Align's Analysis: Log In or Subscribe
New Jersey – The governor signed legislation expanding paid sick and family leave benefits to workers who are diagnosed with COVID-19 or those who are caring for an afflicted family member.To Access Align's Analysis: Log In or Subscribe
Amazon – Under pressure from labor advocacy groups, Amazon announced they will extend paid leave benefits to all part-time and seasonal delivery employees including those who self-quarantine. The company continues to be a lightning rod for activists and policymakers who contend the company is using the health crisis to take advantage of both workers and consumers.To Access Align's Analysis: Log In or Subscribe
Labor Policy
NLRB – The National Labor Relations Board (NLRB) announced that it is pushing the effective date of the new union election rules to June 1, coming on the heels of postponing all union elections until at least April 3.To Access Align's Analysis: Log In or Subscribe
Scheduling
Philadelphia, PA – Despite industry efforts to further delay implementation, the city’s scheduling mandate will go into effect April 1.To Access Align's Analysis: Log In or Subscribe