What is the CARES Act?

On Friday, March 27, 2020, the President signed the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”).  The CARES Act answers one question a lot of Americans had, which was, “How much money am I going to get in this stimulus?”  In addition to that, the CARES Act expands unemployment benefits, pauses student loan payments and other debt, and clarifies paid FMLA and Sick Leave.

STIMULUS CHECK BREAKDOWN

Probably the most anticipated part of the CARES Act was how the $1,200 payment, formally called recovery rebate, would work.  Now, we finally have some details on how it will be calculated. Here are some of the main details:

How Much Is The Rebate?

• $1,200 per individual
• $2,400 per joint filers 
• $500 additional per qualifying child

Are There Any Income Limits?

The Recovery Rebate decreases by $5 for every $100 over the following limits:

• • $75,000 for individuals
    • Zeros out at $99,000

• • $112,500 for head of household
    • Zeros out at $136,500

• • $150,000 for joint filers
    • Zeros out at $198,000

The limits are based on adjusted gross income on 2019 or 2018 tax filings.

When Do I Get The Rebate?

There’s no definitive date for when rebates will be delivered.  The CARES Act only says that payments will be made “as rapidly as possible”.  No payments are allowed after December 31, 2020 though, so you should expect a payment at least before that.

Is The Rebate Taxable?

No, the recovery rebates will not be subjected to taxes.

3 SIGNIFICANT CHANGES TO UNEMPLOYMENT BENEFITS

There are three important changes in the CARES Act that help people who are struggling with layoffs or loss of income due to Covid-19.  These are:

1. Increase of amount of people eligible for unemployment benefits;
2. Increase of the amount received for unemployment benefits; and 
3. Increase in the number of weeks individuals can receive benefits.

Increase of Amount of People Eligible for Unemployment Benefits

Under Pandemic Unemployment Assistance (“PUA”), which I like to call the Left Behind Provision, people who may not be eligible to receive benefits under state unemployment law could receive benefits.  This is extremely impactful because of the growing amount of people working as independent contractors in the gig economy. It also includes people who have exhausted their benefits under state law, and people who may not qualify because they did not work the required number of weeks prior to filing unemployment.

There are essentially two ways to qualify for PUA. First, you have to be able to work and available for work but unemployed or partially unemployed OR you are unable to work because of one of the following reasons:

• You were diagnosed with Covid-19 or have symptoms and you’re in treatment 
• Someone in your household has Covid-19
• You’re providing care to someone diagnosed with Covid-19
• Child or other person you are primary caregiver for can’t go to school or facility because it’s closed and you need child or other person to go to school or facility so you can go to work
• You’re unable to reach job because of quarantine imposed as direct result of Covid-19
• You’re unable to work because doctor told them to self quarantine due to concerns related to Covid-19
• You had a job lined up, but now do not or can’t get to the job directly because of Covid-19
• You became breadwinner because head of household died from Covid-19
• Forced to quit your job because of Covid-19
• Your job closed because of Covid-19
• Other criteria by Secretary of Labor for unemployment assistance

Increase of Amount Received for Unemployment Benefits

The Emergency Increase In Unemployment Compensation provision increases the amount of money people can receive as weekly benefits.  In addition to the weekly benefit amount calculated by the state unemployment office, individuals will receive $600. It’s up to the state if the payments from regular unemployment and the Emergency Increase will be made at the same time or at different times.

Increase in Number of Weeks Benefits Can be Received

The Pandemic Emergency Unemployment Compensation (“PEUC”) provision increases the amount of weeks people are eligible to receive unemployment benefits.  Currently, Ohio and most other states offer 26 weeks of unemployment benefits. PEUC adds an additional 13 weeks to that amount, making it 39 weeks of benefits. 

As long as a state is participating in PEUC, it is not allowed to reduce the number of weeks that people can receive unemployment benefits. PEUC is available to people who are able to work, available to work, and are actively seeking work.  Thankfully, there is some flexibility to meeting the “actively seeking work” requirement if your ability to seek work is impacted by Covid-19.

MORE LAWS TO COME

I covered some of the parts of the CARES Act that most impact employees.  But there are more that intertwine with the Families First Coronavirus Relief Act, and others that focus more on aid for small business and increased support for the healthcare industry.  At this time, it’s hard to say if this will be enough, and I don’t think many are arguing that it is. As new legislation passes, I’ll do my best to keep you all informed of your quickly changing rights!

James J. Hux is the Owner and Sole Attorney at Hux Law Firm, LLC. His practice areas include employment discrimination, personal injury, and general civil litigation throughout the State of Ohio.