It has taken Congress and the President a while, but on December 27, 2020, the new, $900 billion COVID stimulus bill was signed into law.  The law extends some of the protections that have been in place during 2020 and adds others, including:

• • Direct stimulus payments;
  • Renewal of unemployment benefits;
  • Renewal of the Paycheck Protection Program (“PPP”);
  • Funds to equip schools with protection equipment;
  • Extension of tax deferred payments;
  • Extension of eviction ban and rental assistance;
  • Nutrition assistance including assistance to food banks; and
  • Funds for vaccine development and distribution.

Stimulus Payments: The price tag on the new stimulus law is dwarfed by the $2 trillion CARES Act that was passed last spring. Part of the reason for the price differential includes fewer workers who will receive stimulus checks and less unemployment money from the federal government for unemployed workers.  Stimulus payments will be $600.00 per worker instead of the $1,200 included in the CARES Act. In addition, the threshold of salary minimums to qualify for the stimulus check is higher. Both of these items mean that fewer workers will receive less money than received stimulus money last spring.

Unemployment Payments: The new stimulus law became effective just as two unemployment programs were set to end on December 26, 2020: The Pandemic Unemployment Assistance program, which provided aid to self-employed, temporary workers and project workers; and the Pandemic Emergency Unemployment Compensation program, which provided an additional 13 weeks of benefits beyond the typical 26 weeks that states provide to jobless workers. The new stimulus law provides unemployed workers an extra $300 on top of their state benefits for 11 weeks (through March 14, 2021).  This is half the $600 previously included in the CARES Act.

Second PPP: A more complete discussion of the new PPP The package reopens the PPP is included in our companion blog.

Education payments: The new stimulus law provides $82 billion in aid for K-12 schools and colleges.  An additional $10 billion is included to support child-care providers that have struggled because of the pandemic.

Rental Assistance: The new stimulus law extends until January 31, 2021, the eviction protection set to expire at the end of the year. It also provides rental assistance for individuals who lost their sources of income during the pandemic. The money can be used for payment of rent or utilities.

Nutrition Assistance: The package raises SNAP benefits by 15% for six months but does not expand eligibility.  It also expands the Pandemic-EBT program to families with children under age 6 who receive food stamps, deeming them “enrolled” in childcare and eligible for benefits. The program now provides money to low-income families with school-age children in lieu of the free and reduced-price meals they would have received in school. The package sends $400 million to food banks and food pantries through The Emergency Food Assistance Program. It also provides $175 million for nutrition services for seniors, such as Meals on Wheels, and $13 million for the Commodity Supplemental Food Program, which serves more than 700,000 older Americans monthly.

Vaccine and Hospital payments: The new stimulus law provides $20 billion for the purchase of vaccines to be administered to those who cannot otherwise afford it, as well as another $8 billion for vaccine distribution. It also provides financial assistance to states for COVID testing and to hospitals and health care providers for reimbursement of health care-related expenses or lost revenue resulting from the pandemic.

Payroll Tax Repayment: Employers who are deferring their workers’ payroll taxes under the President’s executive action from August – December 2020, now have until the end of 2021 to increase their employees’ withholding to pay back the taxes owed. Employers previously had until April 30, 2021 to withhold and pay back taxes owed by employees from the last half of 2020, but now, employers have until the end of 2021.

Not included in this package:

1. This new stimulus law does not include any direct additional assistance to state or local government. While the law includes assistance for emergency resources for schools, for state highways, for transit agencies, Amtrak, airports, for health-related expenses of state, local, tribal and territorial government, and for intercity buses, it does not provide direct aid to state and local governments who have taken in lower sales tax dollars during 2020 due to the pandemic. The law extends the deadline for states to spend the previously given coronavirus relief funds by one year.

2. As with the last stimulus package, there is no COVID-19 liability to guard against lawsuits against businesses, schools, hospitals and other organizations from people who said these institutions caused them to acquire the coronavirus, except for instances of gross negligence. The coronavirus liability shield, along with money for state and local funding, has been severed into a separate piece of legislation.

Given the number of limitations in this new stimulus package, it is always advisable to consult with an attorney, human resources manager, and risk manager before deciding how to proceed. The attorneys in our Austin and Dallas offices are available to answer any questions you may have.

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