Feeling a little dazed and confused about the latest stimulus plans?  You are not alone.  As court challenges about the constitutionality of the President’s latest executive orders are threatened and Congress continues to try to reach a deal on the next stimulus package, you might find yourself asking, rather than exclaiming, “alright, alright, alright?”

So, where exactly are we?  On Saturday, the President issued four executive orders intended to bypass the Congressional deadlock over the next stimulus bill.  The two competing bills in Congress, the House’s HEROS act and the Senate’s HEALS act, share more than just letters (three).  After a brief review of the President’s Orders, we will provide a brief summary of the HEROES and HEALS bills.  Hopefully, after reading our summary, you will be a little less confused.  We make no promises, however, about whether you will be any less dazed.

1.    The President’s August 8, 2020 Executive Orders

On August 8, 2020, President Trump issued several Executive Orders that will become effective on September 1, 2020. Those Orders include the following:

• • Extension of supplemental unemployment benefits. Unemployment benefits would be supplemented by $400 per week (less than the most recent stimulus law’s $600 per week supplement), with federal government contributing $300 and the state governments contributing the remaining $100.
  • Employers must offer employees a deferral of employees’ payroll tax deduction from September 1 through December 31, 2020. This order impacts employees who make less than $4000 every 2 weeks or $104,000 per year and comprises a deferral, not forgiveness. The employee will still owe the taxes for the 2020 tax year.
  • Interest on federal student loans are waived until December 31, 2020 and lenders may delay payments altogether until December 31, 2020.
  • Encouraging and providing financial assistance to public housing authorities, affordable housing owners, landlords and recipients of federal grant funds to minimize evictions and foreclosures.

The Orders do not appear to include any changes to the Families First Corona Response Act (“FFRCA”) or the CARES Act. These executive orders also do not include a stimulus check and/or any direct payments to taxpayers.

Challenges abound in implementing the Orders. Aside from possible legal challenges on whether the President has usurped Congress’s power of the purse, several of the Orders require state governors to voluntarily agree to the enhanced unemployment program. That is not a sure thing.   Employers also have the additional challenge of informing employees about the payroll tax deferral program without increasing their own possible exposure or headaches if the employees fail to pay those taxes when due.

2.    We Can be HEROES, Just for One Day

The stimulus bill proposed by the House of Representatives includes the proposed House Bill 6800, Health and Economic Recovery Omnibus Emergency Solutions Act or the HEROES Act

Among other things, the HEROES Act would provide the following:

• • Additional direct payments of up to $1,200 per individual;
  • Expanded paid sick days, family and medical leave, unemployment compensation, nutrition and food assistance programs, housing assistance, and payments to farmers;
  • Expansion of the Paycheck Protection Program;
  • A fund to award grants for employers to provide pandemic premium pay for essential workers;
  • Several tax credits and deductions;
  • Funding and requirements for COVID-19 testing and contact tracing;
  • Elimination of cost-sharing for COVID-19 treatments;
  • Extension and expansion of the moratorium on certain evictions and foreclosures;
  • Employers must develop and implement infectious disease exposure control plans;
  • FY2020 emergency supplemental appropriations to federal agencies; and
  • Payments and other assistance to state, local, tribal, and territorial governments.

3.    We Could HEAL, Just for One Day

The Senate has proposed several bills that cumulatively are known as the HEALS Act – Health, Economic Assistance, Liability Protection, and Schools Act.

Among other things, the HEALS Act would provide the following:

• • Additional direct payments to individuals based on a new calculation of payment (including former pay rate) per individual;
  • Relief for businesses, universities, schools and hospital in the form of a “liability shield” that prevents lawsuits COVID related damages, with limited exceptions;
  • Extension of additional unemployment benefits (at a reduced amount);
  • Additional funding to continue small business recovery and emergency loans;
  • Additional funds for a second round of the Paycheck Protection Program with proposed restrictions as to eligibility of company to qualify (i.e. size of employee base and percentage of revenue lost this year);
  • Additional funding for school districts to allow kids back to in-person school;
  • Use of Funds from last Coronavirus Relief Bill for municipalities and states to use, but no additional funding granted;
  • Creation of “trust” committees to address the federal trust funds including Social Security, Highway, and Medicare trust funds;
  • Additional funds for testing, to support the National Institute of Health and Centers for Disease Control and Prevention;
  • Expansion of the business “meal” deduction to a 100% deduction for business “meal” expenses through the rest of the year.

4.    Less Confused, More Dazed

As the House and Senate continue to try to bridge the gaps between HEROES and HEALS (can HALOS be far behind?), the September 1^st effective date of President’s Orders draws closer.  Aside from monitoring developments in Washington, employers may consider starting to develop proper disclosures to provide employees about payroll tax deferrals.

It is always a best practice to consult with your payroll and accounting department and/or firms in terms of tax consequences and payroll issues.  You may also wish to consult with legal counsel regarding employment-related issues, regardless of the whether the HEALS-HEROES gap is bridged.  The attorneys in our Austin and Dallas offices are available to answer any questions you may have.

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