Congress Passes and Trump Signs Year-End Appropriations and COVID Stimulus Bill with Key Employment Benefits | Practical Law

Congress Passes and Trump Signs Year-End Appropriations and COVID Stimulus Bill with Key Employment Benefits | Practical Law

On December 21, 2020, Congress passed the Consolidated Appropriations Act, 2021 (CAA-21), a $2.3 trillion omnibus appropriations bill. The CAA-21 provides $900 billion in COVID-related stimulus and contains several significant employment provisions, including extensions of unemployment and other benefits provided under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act).

Congress Passes and Trump Signs Year-End Appropriations and COVID Stimulus Bill with Key Employment Benefits

by Practical Law Labor & Employment
Law stated as of 26 Feb 2021 • USA (National/Federal)
On December 21, 2020, Congress passed the Consolidated Appropriations Act, 2021 (CAA-21), a $2.3 trillion omnibus appropriations bill. The CAA-21 provides $900 billion in COVID-related stimulus and contains several significant employment provisions, including extensions of unemployment and other benefits provided under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act).
UPDATE: Although then-President Trump had expressed disapproval of certain provisions (though largely not those addressed by this Legal Update), he signed the bill into law on December 27, 2020.
On December 21, 2020, after months of stalled negotiations, Congress passed with overwhelming bipartisan support the Consolidated Appropriations Act, 2021 (CAA-21). The $2.3 trillion, 5,593-page omnibus appropriations bill includes $900 billion in a second round of COVID-related stimulus relief (Division M, Coronavirus Response and Relief Supplemental Appropriations Act, 2021) and other COVID-related benefits (Division N). The CAA-21 contains several key labor and employment provisions, including the Continued Assistance for Unemployed Workers Act of 2020. Despite then-President Trump's public call for higher payments to individuals and his expressed disapproval of several other provisions in the CAA-21, he signed the Act into law on December 27, 2020.
The CAA-21 extends (with some modification, and some payment gaps due to the timing of enactment) many benefits provided under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) enacted in March 2020. For more on the CARES Act, see Practice Note, COVID-19: Unemployment Benefit Provisions of the CARES Act and FFCRA and Practice Note, Road Map to the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). The Act also allows employers to continue to take tax credits for qualifying paid sick and family leave under the Families First Coronavirus Response Act (FFCRA) through March 14, 2021. For more on the FFCRA, see Practice Note, COVID-19: Paid Sick and Family Leave Under the FFCRA.
This Legal Update highlights the key employment-related provisions in the Act but is not intended as a detailed summary of the broad-reaching legislation. Practical Law will continue to supplement this Legal Update and related resources with further developments, including agency regulations and interpretive guidance if and when they become available.

Key Employment Law Provisions

The key employment-related provisions of the Act address:
  • Pandemic Unemployment Assistance (PUA) benefits. The temporary federal PUA program enacted as part of the CARES Act provided covered individuals with up to 39 weeks of unemployment benefits, beginning on January 27, 2020, and ending on December 31, 2020 (15 U.S.C. § 9021(b)). The Act extends and modifies many of those provisions (Act, Div. N, Title II, Subtitle A, Ch. 1 (Continued Assistance for Unemployed Workers Act of 2020), Subch. I (Extension of CARES Act Unemployment Provisions); see also Practice Note, COVID-19: Unemployment Benefit Provisions of the CARES Act and FFCRA: Pandemic Unemployment Assistance (PUA) Program). Specifically, the Act:
    • amends the CARES Act to cover a 50-week period, rather than 39-week period, extending benefits through March 14, 2021 (although the total benefit period may be disrupted or diminished by a week because of when then-President Trump signed of the CAA-21) (Div. N, Title II, Subtitle A, Ch. 1, Subch. I, § 201(b), amending 15 U.S.C. § 9021(c) (2));
    • allows for phasing out of PUA benefits until April 5, 2021 for individuals who remain eligible after March 14, 2021 and who have not otherwise exhausted their maximum benefits entitlement (but no pandemic unemployment benefits can be paid after April 5 under this Act) (Div. N, Title II, Subtitle A, Ch. 1, Subch. I, § 201(a), amending 15 U.S.C. § 9021(a));
    • allows states to waive certain no-fault overpayment recoveries (Div. N, Title II, Subtitle A, Ch. 1, Subch. I, § 201(d), amending 15 U.S.C. § 9021(d));
    • requires individuals to submit documents to prove their eligibility for these benefits and recertify eligibility each week (Div. N, Title II, Subtitle A, Ch. 1, Subchs. IV and VI, §§ 241, 263, amending 15 U.S.C. § 9021(a)(3)(A), (c)); and
    • requires states to implement a procedure to address claimants of unemployment compensation who refuse to return to work or to accept an offer of suitable work without good cause (Div. N, Title II, Subtitle A, Ch. 1, Subch. V, § 251, adding Section 2117 to CARES Act, Div. A, Title II, Subtitle A).
  • Payments to nonprofits, states, and local government entities. The CAA-21 allocates federal funds to reimburse nonprofits, state and local government entities, and federally-recognized Indian tribes for 50% of the costs they incur by paying unemployment benefits between December 31, 2020 (when CARES Act benefits originally expired) through March 14, 2021 (Div. N, Title II, Subtitle A, Ch. 1, Subch. I, § 202, amending 42 U.S.C. § 1103(i)(1)(D); see also Practice Note, COVID-19: Unemployment Benefit Provisions of the CARES Act and FFCRA: Reimbursement to Nonprofits, Government Agencies, and Indian Tribes).
  • Federal Pandemic Unemployment Compensation (FPUC). The CAA-21 extends the FPUC program, which provided $600 per week in supplemental unemployment benefits but expired on July 31, 2020. It also reinstates direct payments of $300 per week for weeks of unemployment beginning after December 26, 2020 through March 14, 2021 (though this benefit may be shortened by one week because of when then-President Trump signed CAA-21). (Div. N, Title II, Subtitle A, Ch. 1, Subch. I, § 203(a), (b), amending 15 U.S.C. § 9023(b), (e); see also Practice Note, COVID-19: Unemployment Benefit Provisions of the CARES Act and FFCRA: Federal Pandemic Unemployment Compensation (FPUC).)
  • Waiving waiting requirements. The CAA-21 reimburses 50% of a state's cost of waiving the one-week waiting requirement for unemployment insurance benefits for weeks of unemployment beginning after December 31, 2020 through March 14, 2021 (Div. N, Title II, Subtitle A, Ch. 1, Subch. I, § 204, amending 15 U.S.C. § 9024(c)). The CARES Act provides 100% reimbursement through December 31, 2020 (see Practice Note, COVID-19: Unemployment Benefit Provisions of the CARES Act and FFCRA: Funding to Pay One-Week Waiting Period).
  • State flexibility. The Act extends the expiration date of states' flexibility to determine unemployment eligibility criteria under FFCRA's Emergency Unemployment Insurance Stabilization and Access Act of 2020 (EUISAA) from December 31, 2020 to March 14, 2021 (Div. N, Title II, Subtitle A, Ch. 1, Subch. I, § 205, amending FFCRA, § 4102(b); see Practice Note, COVID-19: Unemployment Benefit Provisions of the CARES Act and FFCRA: States Given Emergency Temporary Flexibility).
  • Pandemic Emergency Unemployment Compensation (PEUC). The CAA-21 expands the total weeks' entitlement from 13 to 24 weeks (though this benefit period may be reduced by one week because of when then-President Trump signed the Act) and allows for phased out benefits through April 5, 2021 for individuals who remain eligible for PEUC and have not otherwise exhausted their benefits entitlement (Div. N, Title II, Subtitle A, Ch. 1, Subch. I, § 206, amending 15 U.S.C. § 9025(b), (g)).
  • Mixed Earner Unemployment Compensation. The CAA-21 provides $100 per week additional benefit in Mixed Earner Unemployment Compensation to certain individuals who receive a combination of traditional wages as employees and also earn at least $5,000 year as independent contractors or freelancers, subject to substantiation requirements of the self-employed income level (Div. N, Title II, Subtitle A, Ch. 1, Subch. VI, § 261, amending 15 U.S.C. § 9023(b)(1)). These individuals previously were not entitled to PUA benefits because they were entitled to receive traditional state unemployment benefits.
  • Work-Share or Short-Term Compensation (STC) Programs. The Act extends CARES Act funding to states that currently have or choose to implement an STC program, as defined in Section 3306(v) of the Federal Unemployment Tax Act (FUTA) (26 U.S.C. § 3306(v)) from December 31, 2020 through March 14, 2021 (Div. N, Title II, Subtitle A, Ch. 1, Subch. I, §§ 207 and 208, amending 15 U.S.C. §§ 9026(b)(2) and 9027(d); see also Practice Note, COVID-19: Unemployment Benefit Provisions of the CARES Act and FFCRA: Funding for Short-Time Compensation (STC) Programs).
  • FFCRA unemployment compensation funding. The CAA-21 extends full federal funding of extended unemployment compensation under the FFCRA through March 14, 2021 (Div. N, Title II, Subtitle A, Ch. 1, Subch. II, § 222, amending FFCRA, § 4105).
  • The US DOL issued guidance to state unemployment insurance agencies that increases the number of instances in which workers may be eligible for PUA to those:
    • receiving unemployment insurance benefits who had their continued regular unemployment benefits' claims denied after they reduced to work or accept an offer or work at a worksite not in compliance with COVID-19 health and safety standards;
    • laid off, or who have had their work hours reduced as a direct result of the pandemic; and
    • school employees working without a contract or reasonable assurance of continued employment and who face reduced paychecks and no assurance of continued pay when schools are closed due to COVID-19.
    Although these new reasons are retroactive to the beginning of the PUA program, the earliest this expanded eligibility is available is at the end of March. (DOL Advisory: Unemployment Insurance Program Letter No. 16-20, Change 5).
Beyond the unemployment provisions, the CAA-21 also addresses:
  • FFCRA tax credits. The CAA-21 extends from December 31, 2020 through March 31, 2021 federal payroll tax credits for employers and self-employed individuals voluntarily providing paid sick and family and medical leave that would have otherwise qualified as FFCRA leave (but for leave entitlements expiring on December 31, 2020), provided the individual has not exhausted the maximum FFCRA leave allotment (Div. N, Title II, Subtitle B (COVID-Related Tax Relief Act of 2020), § 286). However, beginning January 1, 2021, employers are no longer required to provide paid FFCRA leave to employees, though they still may be entitled to paid sick leave or emergency COVID leave under state or local law. For more on FFCRA leave provisions, see Practice Note, COVID-19: Paid Sick and Family Leave Under the FFCRA.
  • Tax credit for paid family and medical leave. The Tax Cuts and Jobs Act of 2017 (TCJA) amended Section 45S of the Internal Revenue Code allowing employers to claim a federal tax credit for providing paid family and medical leave to their employees, subject to certain conditions (26 U.S.C. § 45S). The CAA-21extends this employer credit through December 31, 2025, and applies to wages paid in taxable years beginning after December 31, 2020. (Div. EE (Taxpayer Certainty and Disaster Tax Relief Act of 2020), Title I, Subtitle B, § 119). For more this tax credit, see Practice Note, Employer Credit for Paid Family and Medical Leave Under the TCJA (Code Section 45S).
  • Employee retention tax credits. The CAA-21 extends employee retention tax credits under Section 2301(m) of the CARES Act to wages paid before July 1, 2021 (previously January 1, 2021) (Div. EE, Title II, § 207). For more on these tax credits, see Legal Update, CARES Act Includes Tax Relief for Businesses and Individuals.
  • Benefits for rail workers. The CAA-21 continues unemployment and other assistance to rail workers (Div. N, Title II, Subtitle A, Ch. 1, Subch. III (Continued Assistance of Rail Workers Act of 2020), §§ 231 to 235).
  • Benefits for other transportation workers. The CAA-21 includes pandemic relief for other transportation workers, subject to compliance with certain employee recall requirements, compensation restrictions, and minimum service requirements (Div. N, Title IV (Transportation)). Relief includes:
    • Airline Worker Support Extension (Div. N, Title IV, Subtitle A, § 401);
    • Coronavirus Economic Relief for Transportation Services Act (Div. N, Title IV, Subtitle B, § 420); and
    • Motor Carrier Safety Grant Relief Act of 2020 (Div. N, Title IV, Subtitle C, § 440).
  • Paycheck Protection Program (PPP). The CAA-21 expands the forgivable loans under the PPP for new borrowers and allows a second round of loans for certain small businesses (Div. N, Title III (Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act)). For more on PPP loans and other lending and liquidity provisions in the Act, see Legal Update, Congress Passes and President Trump Signs Year-End Appropriations Bill with Key Small Business and Other Lending and Liquidity Benefits.

Employment-Related Protections That Are Not Included

Of critical import for employers and employees is that the CAA-21 does not:

Key Immigration Law Provisions

The Act includes several provisions addressing immigration law, including:
  • An extension through September 30, 2021 of:
    • the E-Verify program (see Practice Note, E-Verify for Employers: Best Practices);
    • the Special Immigrant non-minister religious worker program, which allows religious workers to apply for permanent residence through their employment with a bona fide, nonprofit religious organization; and
    • the Conrad State 30 J-1 waiver program, which waives the two-year foreign residence requirement for foreign medical graduates who have completed their medical education in the US and work in underserved areas of the country.
  • An extension through June 30, 2021 of the EB-5 Regional Center program, under which investments affiliated with a regional center may participate in the EB-5 immigrant investor program (see EB-5 Immigrant Investor Visa Fundamental Requirements Chart).
  • For fiscal year 2021 (through September 30, 2021), the ability of the Department of Homeland Security (DHS), in consultation with the DOL, to increase the availability of H-2B nonimmigrant visas by a statutorily-authorized amount (see Practice Note, The H-2B Nonimmigrant Visa Classification: A Quick Guide).
  • Section 272 of Div. N, Title II, Subtitle B (COVID-Related Tax Relief Act of 2020) amends and extends the recovery rebate offered to individuals, including by permitting a taxpayer who files a joint tax return to obtain a tax credit if only one of the taxpayers has a valid social security number. This change is important for foreign workers, as many foreign worker spouses do not have work authorization and cannot obtain a social security number.