The COVID-19 pandemic is sending shockwaves through nearly every facet of our lives. Our economy is experiencing an unprecedented crisis as a record number of Americans are filing first-time jobless claims. But a recent piece of federal legislation called the Coronavirus Aid Relief and Economic Security (CARES) Act aims to provide relief for those who are temporarily out of work due to furloughs and layoffs.
What is the CARES Act?
The CARES Act was signed into law on March 27, 2020. This crucial piece of legislation provides emergency assistance and healthcare response for individuals, families, and businesses affected by the pandemic. It builds upon previous congressional actions by including provisions for temporary coverage of individuals who have exhausted their entitlement to regular unemployment compensation.
Within the act is the new Federal Pandemic Unemployment Compensation program. As part of this program, eligible individuals who are collecting certain unemployment insurance benefits, including regular unemployment compensation, will receive an additional $600 per week in federal benefits for weeks of unemployment ending on or before July 31, 2020. Rounding out the program, Pandemic Emergency Unemployment Compensation allows those who have exhausted benefits under regular unemployment compensation or other programs to receive up to 13 weeks of additional benefits.
Ultimately, these elements of the act provides up to 39 weeks of benefits, and these benefits are available beginning on or after January 2020 and ending on or before December 31, 2020.
Is There Assistance for Those in the Gig Economy?
Typically, part-time employees, gig workers, seasonal workers, and the self-employed aren’t able to take advantage of unemployment compensation benefits. The CARES Act provides for these workers through Pandemic Unemployment Insurance, which aims to help those who lost work as a direct result of COVID-19 through the end of the year.
Those who file will be able to take advantage of PUA for a maximum of 26 weeks, and the compensation amount will be similar to traditional unemployment. The federal government requires PUA to be tracked separately from regular unemployment, and government agencies are expected to build new online platforms to track pandemic assistance.
What about Small Businesses?
For companies with 500 or fewer employees, emergency grants and a forgivable loan program are now available, and changes to rules for expenses and deductions are meant to make it easier for companies to keep employees on the payroll. To cover immediate operating costs, the act offers small businesses emergency grants that provide up to $10,000.
Through the Paycheck Protection Program, the Small Business Administration (SBA) is providing direct incentives for small businesses to keep their workers on the payroll. The SBA will forgive the loan if all employees are kept on the payroll for 8 weeks and if any portion of the loan is used to maintain payroll, keep workers on the books, or pay for rent, mortgage and existing debt.
Can Students Find Relief?
The CARES Act also includes help for college students and graduates in the form of deferred loans and interest payments through September 30 without penalty. Students can turn unused work-study funds into supplemental grants and continue paying work-study wages while schools are suspended.
Learners who are forced to drop out as a result of coronavirus won’t have that time away from school deducted from their lifetime limits on subsidized loan and Pell Grant eligibility, and they will not be asked to pay back any grants or other aid already received.
Find out more about the CARES Act by visiting the U.S. Department of Labor’s newsroom.