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Employer’s Guide to the New CARES Act

The Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) was passed on Friday, March 27. In addition to amending the paid leave provisions of the Families First Coronavirus Response Act, it designates nearly $2 trillion to assist with COVID-19 efforts and effects. Notably, it provides $250 billion to fund unemployment and expands benefit coverage. Below, we’ve highlighted the most important parts of CARES that employers should know.

Most notably, the CARES act expands unemployment coverage and increases benefits.

Now, those not traditionally eligible for unemployment benefits such as the self-employed, independent contractors, those with limited work history, and others who are unable to work as a direct result of the coronavirus may collect unemployment. The Act also expands coverage for certain coronavirus-specific situations, such as when an individual is unable to work due to a quarantine order, coronavirus diagnosis, or caregiving responsibilities. These individuals are eligible for the same weekly benefit amounts as those who traditionally qualify for unemployment; however, these benefits can be back-dated to January 27, 2020.

In addition to expanding coverage, the Act also increases benefits. Unemployed individuals will now be paid an additional $600 per week through July 30, 2020. This amount is a flat-rate increase to all individuals now qualifying for unemployment and is paid in addition to what the individual already receives. The length of benefits was also increased to provide for payment for an additional 13 weeks for those who remain unemployed after their state-provided benefits terminate. That means that Ohio employees will be eligible to collect benefits for a total of 39 weeks.

Notably, these provisions could mean that certain individuals will earn more under unemployment than they made while they were working. Therefore, employers should carefully review their current workforce strategies and consult with their attorneys for guidance in how to proceed.

If you have questions about the CARES Act and how it applies to your business, please contact Brendan Feheley or Danielle Crane.

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