A Florida Employer’s Guide to 2020 CARES Act in the Coronavirus Era
In this time of economic uncertainty and financial market volatility caused by the COVID-19 pandemic, employers must adapt to the new coronavirus reality as well as comply with new employment laws. One such law was the enactment of the Coronavirus Aid, Relief, and Economic Security (CARES) on March 27, 2020.
The Act provides economic assistance to employers, employees, and businesses to cope with the devastating financial effects of the coronavirus pandemic. We have prepared a guide to the CARES Act.
Expanding Unemployment Benefits
The CARES Act expands rights to unemployment benefits for workers who are unemployed due to the coronavirus pandemic. Also, the Act provides an unemployment compensation program for the following categories of American workers:
- Self-employed individuals;
- Gig workers;
- Independent contractors; and
- Individuals whose work histories might not qualify for benefits.
The Act also guarantees an additional $600 per week in unemployment benefits above the amount a worker is receiving under state law. The extra payment can be received for up to four months. The state of Florida offers a maximum of $275 a week for up to 12 weeks.
The federal coronavirus relief bill has extended an eligible individual’s ability to receive unemployment compensation by an additional 13 weeks, through December 31, 2020. However, the law prevents workers from receiving unemployment compensation while also receiving paid sick leave from their employer.
Providing a Refundable Payroll Tax Credit
The CARES Act also provides favorable tax provisions for employers affected by the coronavirus pandemic. While most provisions are generally applicable, some are limited to eligible employers.
For example, employers are eligible for a refundable payroll tax credit for employee retention if:
- Their business was fully or partially closed due to a state or federal order restricting travel, commerce, or group meetings; or
- Their company experienced a significant reduction in receipts due to the coronavirus pandemic.
The tax credit amounts to 50% of the qualifying wages paid to an employee in a particular quarter, but cannot exceed $10,000 per worker. However, an employer cannot earn these tax credits if he or she receives loans under the Paycheck Protection (PP) Program.
Receiving Small Business Loans Under the PP Program
The CARES Act also set up the Paycheck Protection Program, which provides emergency loans, the so-called Paycheck Protection loans, to small businesses. The program provides loans under the PP program through June 30, 2020, to employers:
- With fewer than 500 workers;
- Who were in business on February 15, 2020; and
- Who pay employees or contractors.
The Act counts individuals working on a full- or part-time basis, or another basis, when determining whether an employer employs fewer than 500 workers. However, some employers in the restaurant and lodging industries may also receive emergency loans through the PP program, even if they have over 500 employees.
The maximum allowable amount of emergency loans provided by the program is the lesser of:
- $10,000,000; or
- 2.5 times the average monthly payments made for payroll costs during the 12 months before the loan disbursement.
Find out how the CARES Act affects your company by consulting with our West Palm Beach employment law attorneys. Contact Pike & Lustig, LLP, to get a no-obligation consultation by calling at 561-291-8298.