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Congress Adopts “Phase Two” Coronavirus Relief Bill

Congress Adopts “Phase Two” Coronavirus Relief Bill Background Decorative Image

On Wednesday, March 18, 2020, the U.S. Senate passed the “Phase Two” coronavirus relief bill.1 Known as the “Families First Coronavirus Response Act,” it was passed by the House of Representatives early Saturday morning, March 14.  President Trump signed it Wednesday evening. Phase Two focuses on paid leave, coronavirus testing, food assistance, and unemployment insurance:

  • Phase Two requires employers with fewer than 500 employees to provide paid leave for workers – two weeks of paid sick leave and up to twelve weeks of paid family and medical leave. This requirement applies to employees who are infected by the virus, quarantined as a result of the virus, caring for a sick family member, or affected by closure of a school, childcare or other care facility. Employers will receive a tax credit to cover the costs of providing the mandated leave. (See additional insight here.)
  • There are several exclusions from the paid leave requirements:
    • Large employers – with over 500 employees – are excluded.
    • The Labor Department can exempt workers at companies with fewer than 50 employees if providing paid leave would jeopardize the viability of the business.
    • Certain health care providers and emergency responders are excluded.
  • Phase Two provides for free coronavirus testing.
  • It increases funding for food assistance programs by over $1 billion.
  • Phase Two provides $1 billion for emergency grants to states to assist with processing and paying unemployment insurance benefits.

The Senate is now working on a more extensive, $1 trillion, “Phase Three” relief package, with the objective of passing it this week so the House can take it up next week. This bill is being negotiated with input from Treasury. Items under consideration – subject to changes – include:

  • A small business interruption loan program funded at $300 billion and guaranteed at 100 percent by the government.
    • Loans would be offered by U.S. financial companies.
    • Treasury would issue regulations on interest rates and maturities.
    • Eligible borrowers would have 500 or fewer employees.
    • Loans would cover six weeks of payroll, capped at $1,540 per week per employee.
    • This program would be in addition to the disaster loan assistance offered by the Small Business Administration.
  • $50 billion in aid for the airline industry.
  • $150 billion for other distressed sectors of the economy – the hospitality, energy, and public transport sectors have been mentioned.
  • Two rounds of payments totaling $250 billion each, to be paid on April 6 and May 18 directly to Americans below an income level to be determined.

Please visit our Coronavirus: Preparation & Response series for additional resources we hope will be helpful.

1 Phase One (passed in early March) provided $8.3 billion for development of a coronavirus vaccine, state and local government efforts to address the outbreak, overseas response efforts, and an increase in loans to small businesses.


This information is provided by Vinson & Elkins LLP for educational and informational purposes only and is not intended, nor should it be construed, as legal advice.