As COVID-19 containment efforts expand, a growing number of employers are seeing major disruptions to their operations or reductions in services. Similarly, a growing number of employees are concerned about significant drops in wages caused by quarantines, reductions in work hours, school closures, or job eliminations. In an effort to mitigate the impact of COVID-19 containment efforts on employers and employees alike, several resources and programs have been set up to provide assistance. Below is a brief summary of some of those resources.
RESOURCES FOR EMPLOYERS
U.S. Small Business Administration Disaster Loan Assistance
Employers suffering economic injury caused by COVID-19 may be eligible to apply for disaster loan assistance through the federal Small Business Administration ("SBA"). SBA's Disaster Loans offer up to $2 million in assistance for a small business to provide vital economic support to help overcome the temporary loss of revenue they are experiencing. These loans may be used to pay fixed debts, payroll, accounts payable and other bills that can't be paid because of COVID-19's impact. The interest rate for these loans is 3.75% for small businesses without credit available elsewhere; businesses with credit available elsewhere are not eligible. The interest rate for non-profits is 2.75% and the repayment periods can be up to a maximum of 30 years.
California Unemployment Insurance Work Sharing Program
Employers impacted by COVID-19 through reductions in services or slowdowns in business may apply for the California Unemployment Insurance ("UI") Work Sharing Program. The UI Work Sharing Program permits employers to avoid layoffs by reducing the work hours and wages of their current employees and partially offsetting those reductions with UI benefits to those employees. Workers of employers who are approved to participate in the UI Work Sharing Program receive a percentage of their weekly UI benefit amount based on the percentage of hours and wages reduced, not to exceed 60%.
America's Job Center of California Rapid Response Services
Employers facing closures or major layoffs caused by COVID-19 may request the assistance of the Rapid Response Services program through America's Job Center of California ("AJCC"). Among other resources, the Rapid Response Services program provides employees who are impacted by closures or layoffs with job training, career counseling, job search assistance, résumé preparation, and interview workshops, all of which may ultimately help lower employer UI costs by helping impacted employees find new employment more quickly.
Payroll Tax Deadline Extension
Pursuant to Governor Gavin Newsom's Executive Order N-25-20 issued on March 12, 2020, employers experiencing financial hardship caused by COVID-19 may now request up to a 60-day extension of time to file their payroll reports and/or deposit state payroll taxes, all without penalty or interest. Such a request must be received by the California Employment Development Department ("EDD") within 60 days of the original delinquency date.
RESOURCES FOR EMPLOYEES
California State Disability Insurance
Employees who are unable to work due to an exposure to or infection by COVID-19 are eligible to file for California State Disability Insurance ("SDI") through the EDD. SDI provides short-term benefit payments to employees suffering a full or partial loss of wages due to illness or a quarantine caused by COVID-19. The benefit amounts are generally equal to 60% to 70% of an employee's regular wages and can range between $50 to $1,300 per week. Although there is typically a one-week unpaid "waiting period" requirement before an employee becomes eligible for SDI benefits, Governor Newsom's Executive Order N-25-20 waives the waiting period requirement for SDI claims, allowing employees to receive SDI benefits covering the first week that they are unable to work. Eligible employees can typically expect to receive SDI benefit payments within a few weeks of submitting their claim.
California Paid Family Leave
Employees who must take time away from work to care for an ill or quarantined family member due to COVID-19 may file a claim for Paid Family Leave ("PFL"), which provides employees up to six weeks of benefit payments to offset wage losses caused by family leave. The benefit amounts are generally equal to 60% to 70% of an employee's regular wages and can range between $50 to $1,300 per week. Eligible employees can typically expect to receive PFL benefit payments within a few weeks of submitting their claim.
California Unemployment Insurance
Employees experiencing wage losses caused by COVID-19 because their work hours have been reduced, they have been laid off, or because they have taken time away from work to care for a child affected by a school closure may file a claim for UI benefits. UI provides partial wage replacement payments to employees who lose their job or have their hours reduced, through no fault of their own. Eligible employees may receive benefits that range from $40 to $450 per week.
OTHERS RESOURCES IN THE WORKS
In addition to the foregoing state resources, on March 13, 2020, the United States House of Representatives passed H.R. 6201: Families First CoronaVirus Response Act ("H.R. 6201"), which would, among other things, provide an emergency paid leave program.
H.R. 6201 would provide emergency paid leave benefits for employees who are unable to work and must take an "emergency leave day" due to illness or quarantine caused by COVID-19, because they are caring for someone who is ill or quarantined due to COVID-19, or because they are caring for a child whose school has closed due to COVID-19. The paid leave program would be administered by the U.S. Social Security Administration and would provide employees with tax free benefit payments equal to two-thirds (2/3) of their average monthly wages up to a maximum of $4,000 per 30-day period.
Notably, however, H.R. 6201 also includes several limitations on these benefits that may limit its impact for California employees. For example, under the current version of H.R. 6201, if an employee takes a qualifying "emergency leave day," but also receives any other form of paid leave for that day from either the state (e.g., PFL benefits pay from the EDD) or a private party (e.g., state-mandated sick leave pay from an employer), then the benefit under H.R. 6201 for that day will be reduced dollar-for-dollar by the amount received from the state or private party through their paid leave program. Thus, if an employee receives more than 2/3 of their lost wages through a state or employer's paid leave program, then they will not be eligible for benefits under H.R. 6201. Additionally, if an employee is unable to work for a qualifying reason under H.R. 6201, but receives any other form of compensation for that day other than from a paid leave program (e.g., vacation pay, paid time off, UI benefits), or is eligible to receive UI benefits during that same week, then that day will not be classified as an "emergency leave day" that is eligible for benefits under H.R. 6201. These limitations, coupled with California's PFL benefits program, mandatory paid leave requirements for employers, expanded UI benefits eligibility, and generous paid leave policies now offered by many employers in California, H.R. 6201's benefits to California employees will likely be very limited.
Whether these benefits or limitations remain unchanged is yet to be determined. Although H.R. 6201 passed the House with broad bipartisan support, and President Donald J. Trump has announced his support of H.R. 6201, the measure has yet to be taken up by the U.S. Senate. The Senate is expected to review and vote on the measure in the days following its return to session on March 16, 2020, but so far there have been no indications of whether the Senate will expand or further limit the emergency paid leave benefits under the current version H.R. 6201.
