Background: To explain key relief for 501(c)(3) nonprofits and small businesses in the $2 Trillion CARES Act (complete text), we published our CARES Act Alert #1 (Help for Small Businesses & 501(c)(3)s via the PPP); CARES Alert #2 (Get Ready to Apply); CARES Alert #3 (PPP vs EIDL), CARES Alert #4 (Treasury Guidance), CARES Alert #5 (SBA’s Interim Final Rule), CARES Alert #6 (IFR on Affiliation & Religious Nonprofits); and CARES Alert #7 (FBO Guidance). Over $350 Billion of the CARES Act is meant for small entities – small businesses and 501(c)(3)s, including Faith-Based Organizations (FBOs) – with no more than 500 employees. Most of this money flows through two loan/grant programs administered by the Small Business Administration (SBA): Economic Injury Disaster Loan (EIDL) and Paycheck Protection Program (PPP). To govern these programs, the SBA recently issued the following guidance:
This CARES Act Alert #8 focuses on the Act’s significant expansion of unemployment benefits. Such benefits are vital for many individuals and employers – whether nonprofits, FBOs, or churches. In this regard, the Department of Labor (DOL) just published guidance on April 5: Unemployment Insurance Program Letter 16-20 (UIPL 16-20) interpreting the CARES Act. In this Alert, we summarize key features of the Act’s expansion of unemployment benefits. We also note items employers should consider if they do pursue layoffs or other changes in conditions of employment.
- They have been diagnosed with COVID-19 or are experiencing symptoms and are seeking a medical diagnosis.
- A member of their household has been diagnosed with COVID-19.
- They are providing care for a family member or household member who has been diagnosed with COVID-19. (UIPL 16-20 specifies that an “individual who is assisting a family member who is able to adequately care for him or herself is not providing care under this category.”)
- A child or other member of the household for which the individual has primary caregiving responsibility is unable to attend school or another facility because of the COVID-19 emergency and the individuals cannot work because of the need to provide care to that child or household member. (UIPL 16-20 specifies that this category “includes an individual whose job allows for telework, but for whom the provision of care to the child or other person with a closed school or other I-5 facility requires such ongoing and constant attention that it is not possible for the individual to perform work at home.”)
- They are unable to reach their place of work because of a quarantine order imposed as a direct result of COVID-19. (UIPL 16-20 specifies that this includes a state or municipal travel restriction imposed to combat the spread of COVID-19.)
- They are unable to reach their place of employment because they have been advised to self-quarantine by a healthcare provider as a result of COVID-19.
- They were scheduled to begin employment but now do not have a job or cannot reach the job as a direct result of COVID-19.
- They have become the breadwinner or major supporter for a household because the head of the household has died as a direct result of COVID-19.
- They had to quit their job as a direct result of COVID-19.
- Their place of employment is closed as a direct result of COVID-19.