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Coronavirus Aid, Relief, and Economic Security Act (CARES Act)
Practical Law Glossary Item w-024-8034 (Approx. 4 pages)
Glossary
Coronavirus Aid, Relief, and Economic Security Act (CARES Act)
The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) is the third major piece of federal legislation enacted in response to the US outbreak of COVID-19, the disease caused by the 2019 Novel Coronavirus (SARS-CoV-2) (Pub. L. No. 116-136 (Mar. 27, 2020)). The CARES Act is intended to provide economic relief to individuals and businesses facing economic hardship due to the outbreak. Among other provisions, the CARES Act includes:
- Numerous employee benefit and executive compensation requirements, including amendments to the COVID-19 coverage mandate under the Families First Coronavirus Response Act (FFCRA), other changes affecting health and welfare plans, as well as several fringe benefit, retirement plan, and executive compensation-related provisions (see Legal Update, CARES Act Contains Numerous Employee Benefit and Executive Compensation Provisions, Including Changes to COVID-19 Testing Mandate).
- Labor and employment provisions that expand unemployment benefits, impose paid sick leave and expanded family and medical leave requirements, fund short-time compensation programs, amend certain FFCRA provisions, require neutrality towards unions, and protect collective bargaining agreements (CBAs) in specified situations, among other initiatives (see Legal Update, CARES Act Includes Key Labor and Employment Provisions).
- Temporary rules that roll back certain changes made by the Tax Cuts and Jobs Act (TCJA) that adversely affect businesses in distress, and additional business and individual tax relief (see Legal Update, CARES Act Includes Tax Relief for Businesses and Individuals).
- Bank regulatory-related relief provisions (see Legal Update, CARES Act: Bank Regulatory Relief Provisions) and consumer regulatory-related relief provisions (see Legal Update, CARES Act: Consumer Regulatory Relief Provisions).
- Relief programs, including forbearance and foreclosure suspension, for residential and commercial multifamily mortgage borrowers with federally backed mortgages (see Legal Update, COVID-19: Federal CARES Act Stimulus Provides Relief for Federally Backed Residential and Multifamily Mortgage Loans).
- Provisions granting the US Patent and Trademark Office (USPTO) and the US Copyright Office with the temporary authority to extend filing deadlines (see Legal Update, CARES Act Grants Temporary Authority to USPTO and Copyright Office).
- Temporary amendments to the Bankruptcy Code that raise the debt threshold for small businesses under the Small Business Reorganization Act (SBRA), and modify certain provisions of Chapters 7 and 13 (see Legal Update, CARES Act: Revised Sections of the Bankruptcy Code to Mitigate Effects of COVID-19).
- Limits on dividends and buybacks for companies accepting government loans (see Legal Update, Stimulus Package Passed by Senate Includes Limits on Dividends and Buybacks).
The effective and sunset dates of certain CARES Act requirements may vary depending on the particular provision.