On March 27, 2020 the President Trump signed into law a massive stimulus bill, H.R. 748, which provides, among other things, a host of employment related protections and benefits to New Jersey workers. The stimulus package, titled the Coronavirus Aid, Relief, and Economic Security Act, or the CARES Act (hereinafter referred to as the “CARES Act”), provides aid to American citizens that have been negatively impacted by the novel Coronavirus, COVID-19, pandemic.
Included in the Act’s employment protections are additional unemployment compensation benefits, expands paid leave protection, and provides payroll protections to small businesses. The bill has been heavily negotiated by both political sides for the past few weeks. The final negotiated bill has received overwhelming bipartisan approval, receiving an approval by the Senate on Wednesday in a 96-0 vote. The employment related benefits provided under the CARES Act to New Jersey workers include the following:
The CARES Act expands eligibility for unemployment benefits to those workers who have lose their jobs are a result of the coronavirus outbreak. As a result of the public health emergency declared earlier this year, the CARES Act defines “covered individuals” to include workers who, under state or federal law, would not otherwise be eligible for unemployment benefits, but have lost their jobs because of the pandemic—even if those individuals are currently unable to work because of the virus. Not only does the Act extend coverage for persons infected, or caring for those infected, with Coronavirus, but also those who have lost their employment as the result of quarantine directives. Covered individuals are able to collect benefits under the CARES Act for up to 39 weeks. New Jersey unemployment law currently provides for benefits up to a maximum of twenty (26) weeks of a period of unemployment.
Some workers who have not been traditionally eligible for unemployment benefits may be eligible under the expansive definition of eligible workers. Eligible workers include self-employed individuals and independent contractors, including gig economy workers, who have been rendered unable to work as a result of the COVID-19 pandemic. Workers who have the ability to telework with pay and those who are receiving paid sick leave or paid time off will remain ineligible for unemployment benefits.
The CARES Act also included emergency benefits for individuals collecting benefits. The CARES Act allows states to enter into an agreement with the Secretary of Labor to allow for states to provide additional benefits to employees who are eligible for unemployment benefits because of the coronavirus outbreak. States that choose to enter into the agreement will receive aid from the federal government to reimburse to additional benefits provided to eligible unemployed workers.
The CARES Act’s expansion of coverage will continue to December 31, 2020. Individuals who became unemployed prior to the enactment of the CARES Act would have the ability to retroactively recover benefits from as early as January 27, 2020.
Under the CARES Act, eligible unemployed workers may receive an additional $600 per week in unemployment compensation benefits, dubbed “Federal Pandemic Unemployment Compensation”, paid in addition to the regular benefits otherwise collectable under state law. Additional benefits under the CARES Act will be available at such a time as the state enters into an agreement with the federal government and only remain available until July 31, 2020.
The CARES Act amends provisions of earlier Coronavirus legislation, the Families First Coronavirus Response Act. These amendments allow a larger range of employees to receive paid sick leave as a result of the pandemic. The CARES Act expands eligibility for paid Coronavirus related sick leave to employees that had recently been rehired. Previously, to be eligible for paid during Coronavirus related sick leave, employees must have been employed by their employer for at least 30 calendar days. The CARES Act allows employees who had been laid off no earlier than March 1, 2020 and subsequently rehired qualify for paid sick leave, so long as they have been employed by their employer for a 30 of the last 60 days.
The CARES Act also seeks to provide additional payroll protections to small businesses, of less than 500 employees. Under the CARES Act, the Small Business Administration would provide loans to qualified businesses to cover business expenses, including payroll, during the covered period of March 1, 2020 and to December 31, 2020. The CARES Act defines payroll costs to include, wages ($100,000 per individual employee during the covered period), vacation and sick leave, and healthcare benefits, among other things. These loans would be eligible for forgiveness for appropriate cost incurred during the covered period.
Our office will continue to monitor Coronavirus related-employment legislation as it continues to develop. If you have questions about how these laws will impact your employment, or about how the Coronavirus pandemic has impacted other employment rights or protections, our employment lawyers are working remotely and are available for telephone, email and/or video conferencing.