On March 18, President Trump enacted H.R. 6201, known as “Phase 2,” which provides economic stimulus and relief to the American workforce impacted by COVID-19. The following is a summary of key provisions that will impact the business operations of Security Industry Association (SIA) members. including tax credits for employers, employee paid leave and unemployment insurance.
SIA Members Should Know:
- The package contains a refundable payroll tax credit to reimburse local businesses for paid sick leave and family and medical leave wages paid to employees that are affected by COVID-19. Regarding cash flow issues, the U.S Treasury Department stated that “employers will be able to use cash deposited with the IRS to pay sick leave wages. Additionally, for businesses that would not have sufficient taxes to draw from, Treasury will use its regulatory authority to make advances to small businesses to cover such costs.”
- The law permits the U.S. Secretary of Labor to exempt businesses with fewer than 50 employees from Family and Medical Leave Act requirements where it creates significant hardship.
Below is a detailed summary of H.R. 6201 provided by the U.S. House Ways and Means Committee (view full size):
Additional Provisions Impacting SIA Members Include:
Self-Employed Tax Credit
- 100 percent of self-employed individuals’ sick-leave equivalent or 67 percent if they were taking care of a sick family member or child if their school was closed.
- An individual’s sick-leave equivalent amount will be the lesser of their average daily self-employment income, or $511 per day if caring for themselves or $200 if caring for a family member. An employer shall provide paid leave for each day of leave that an employee takes after taking the initial 10 days unpaid (or electing to substitute any accrued vacation leave, personal leave or medical or sick leave for unpaid leave).
- Self-employed individuals could receive a family leave credit for as many as 50 days for the lesser of $200 or their average daily self-employment income.
- Provides as much as $1 billion for emergency transfers to states in fiscal 2020 to process and pay unemployment benefits.
- Each state will receive a proportional amount based on the share of federal unemployment taxes paid by its employers.
- States will receive half of their allocations within 60 days of the bill’s enactment if they certify that they meet certain requirements.
- States will receive the remaining funds if their unemployment claims increased by at least 10 percent over the same quarter in the previous year.
- States could modify certain unemployment policies, including rules related to job searches and initial payment waiting periods, on an emergency temporary basis.
Extended Unemployment Benefits:
- Laid-off workers can receive unemployment benefits for as long as 26 weeks in most states.
- After exhausting those benefits, individuals in states with rising unemployment can qualify for an additional 13 weeks of benefits – or 20 weeks in some states.
What’s Next for Congress and the Administration?
Congress and the Trump administration have now passed two COVID-19 aid packages – Phase 1 allowed $1 billion in loan subsidies to be made available to help small businesses and nonprofit organizations which have been impacted by financial losses.
The Trump administration is expected to unveil a multi-trillion-dollar stimulus package, known as “Phase 3,” to provide financial relief to critical industries such as the airlines, aerospace and other travel-related sectors. SIA will provide further details once the stimulus package has been released.