Coronavirus Aid, Relief, and Economic Security (CARES) Act
The House passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act today. The bill is now headed to the President’s desk for signature. You can find an updated version of the bill here.
In yesterday’s HR Update, MBA answered some FAQs about the CARES Act. You can find yesterday’s HR Update with those FAQs and other coronavirus-related HR Updates here. Additional CARES Act FAQs
- Has the CARES Act been signed into law?
- No, the CARES Act was passed in the Senate and the House but must still be signed by the President.
- Does the CARES Act provide emergency grants to small businesses?
- Yes, the CARES Act, provides $10 billion dollars for emergency grants that provide up to $10,000 to qualifying small businesses to cover immediate operating costs.
- What is the Paycheck Protection Program?
- The Paycheck Protection Program allows small businesses, which are generally defined as businesses with fewer than 500 employees, to apply for forgivable loans to cover expenses such as payroll, rent, and utilities. The goal of the program is to incentivize employers to keep employees on their payroll and rehire employees who have lost their jobs due to the virus.
- The CARES Act set aside $350 million for small businesses under this Program. Each business can borrow based on their payroll needs. The loans will be capped at $10 million.
- Will using a PEO like MBA impact my ability to qualify for a small business loan under the CARES Act?
- No. The CARES Act is clear that 13 CFR 121.103, which governs exempt business affiliations, applies to the CARES Act. This regulation allows employers who use employee leasing companies, like MBA, to still qualify for SBA loans. See 13 CFR 121.103(b)(4).
- Additionally, the SBA has confirmed the regulatory requirements in its Small Business Compliance Guide: Size and Affiliation A Guide to the SBA’s Size Program and Affiliation. The guide states “a business that leases employees from a business primarily engaged in leasing employees to other businesses or which enter into a co-employer arrangement with a Professional Employer Organization (PEO) is not affiliated with the leasing company or PEO solely because it leases or co-employs employees.” A copy of the Guide can be found here. See page 16.
- I have additional questions about the CARES Act. Are there any resources available?
- Yes. MBA will be providing additional information in our HR Updates next week about this bill.
Additionally, the Chambers of Commerce released a Small Business Guide to the Act, which can be found here.
The Senate’s Committee on Small Business & Entrepreneurs also issued a press release earlier this week with additional information on the bill, which can be found here.