Coronavirus Aid, Relief, and Economic Security Act—Key Employer TakeawaysSullivan & Cromwell LLP - April 24, 2020
Updated April 24, 2020. The Paycheck Protection Program and Health Care Enhancement Act (the “Act”) was passed by the U.S. Senate via unanimous consent on April 21, 2020 and by the U.S. House by a vote of 388 to 5 on April 23, 2020, and was signed by President Trump on April 24, 2020. In addition to certain supplemental appropriations related to health care, the Act amends the Coronavirus Aid, Relief, and Economic Security Act by increasing the appropriations to the Paycheck Protection Program from $349 billion to $659 billion, an increase of $310 billion. The initial $349 billion has already been distributed. Of the $310 billion in additional appropriations for the Paycheck Protection Program, $60 billion is earmarked for loans made by certain lenders: (1) at least $30 billion for loans made by insured depository institutions and credit unions with assets between $10 billion and $50 billion, and (2) at least $30 billion for loans made by “community financial institutions” as well as insured depository institutions and credit unions with assets less than $10 billion.
The Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) is the largest economic stimulus package in United States history, providing about $2 trillion in relief and covering a wide range of subjects. This memorandum focuses on the key CARES Act provisions affecting employers and employees, specifically (1) the expansion of unemployment assistance in the Relief for Workers Affected by Coronavirus Act (the “Relief for Workers Act”); (2) amendments to the recently enacted Families First Coronavirus Response Act; (3) the “Paycheck Protection Program” to provide forgivable loans to small businesses in the Keeping American Workers Paid and Employed Act; (4) the employment-related conditions on the loans, loan guarantees, and other financial assistance available under Title IV of the CARES Act, including limits on officer and employee compensation and requirements to remain neutral if the employees of certain businesses seek to unionize; and (5) the provisions in the CARES Act that provide tax and ERISA relief to employers and employees.