How the CARES Act Protects Workers Pay and Benefits

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With the coronavirus crisis burgeoning in the U.S. and around the world, Uncle Sam has stepped in to help American workers displaced by the pandemic.

That aid comes in the form of a $2.2 trillion stimulus package passed by the Senate and signed into law by the president on March 27, 2020.

While the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) provide widespread financial relief across the U.S. economy, it’s focused on laid-off or sidelined workers are generating most of the buzz around the country.

Specifically, Title II of the CARES Act offers financial relief for U.S. workers negatively impacted by coronavirus crisis, also known as COVID-19, mainly by protecting worker pay, boosting unemployment benefits and broadening benefits eligibility.

Let’s take the Act’s specific statutes one at a time.

The Paycheck Protection Program

To stem layoffs and keep money in the pocket of Main Street American workers, the CARES Act includes a Paycheck Protection Program component that addresses the need for employers to keep meeting payroll without having to layoff or sideline employees during the COVID-19 crisis.

That would benefit workers by keeping them on their employer’s payroll and buy companies time until the coronavirus crisis abates.

Here’s how the program works. The Act changes existing language in the Small Business Act to generate Paycheck Protection Plan for U.S. companies that qualify for financial assistance.

To qualify, the employer must have fewer than 500 employees on the payroll or otherwise meet existing Small Business Administration standards for the company’s specific industry.

The PPP does carve out exceptions for certain industries to qualify for benefits. For example, a food services company with more than 500 staffers can qualify for federal government aid if its workforce is spread out beyond a single location.

Qualifying companies can tap federal government resources to take out a loan that is 2.5 times its current payroll costs over a specific time frame. The cash must be used to meet regular payroll obligations and other business-related expenses for the eight weeks laid out in the CARES Act.

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