The Executive Order signed by California’s governor on April 16th states that “workers who are sick are more likely to go to work if they do not have paid leave, thereby increasing health and safety risks for their fellow workers and other members of the public with whom they, or the products of their work.” Whereas the federal Families First Coronavirus Response Act (“FFCRA”) extends emergency paid sick leave requirements only to employers with fewer than 500 employees, the executive order applies to entities with 500 or more employees in the United States. The order provides two weeks of supplemental paid sick leave to certain food sector workers — including farmworkers, agricultural workers and those working in grocery stores, fast food chains and delivery drivers — if they are subject to a quarantine order, advised by a health care provider to self-quarantine, or prohibited from working by the employer due to health concerns related to the potential transmission of COVID-19.
The Congressional Budget Office has released preliminary estimates of the budgetary impact of the CARES Act, reporting that: “On a preliminary basis, CBO and JCT estimate that the act will increase federal deficits by about $1.8 trillion over the 2020-2030 period.” The CBO estimate includes:
• “A $988 billion increase in mandatory outlays;
• A $446 billion decrease in revenues; and
• A $326 billion increase in discretionary outlays, stemming from
emergency supplemental appropriations.”
On Wednesday April 15, 2020, U.S. Treasury Secretary Mnuchin and SBA Administrator Carranza announced that the Payroll Protection Program, introduced by the CARES Act has exhausted its $349 billion appropriation in fewer than 14 days, noting that “[b]y law, the SBA will not be able to issue new loan approvals once the programs experience a lapse in appropriations . . . .[and] urg[ing] Congress to appropriate additional funds for the Paycheck Protection Program . . . at which point we will once again be able to process loan applications, issue loan numbers, and protect millions more paychecks.”
The OECD has released a report tracking and reviewing countries’ tax and fiscal responses to the COVID-19 crisis. In this April 15, 2020 report, the OECD makes a series of observations and recommendations for the future, noting that “some are already suggesting the need for a new kind of ‘Marshal Plan’ to support the poorest countries.”
The Department of Labor released the unemployment claims statistics for the week ending April 11, 2020, reporting 5,245,000 new claims. This number marks “a decrease of 1,370,000 from the previous week’s revised level [which had been revised upward] by 9,000 from 6,606,000 to 6,615,000. The 4-week moving average was 5,508,500, an increase of 1,240,750 from the previous week’s revised average.”
The FAQ guidance from the Small Business Administration, in consultation with the Department of the Treasury, provides guidance to address borrower and lender questions concerning the implementation of the Paycheck Protection Program (PPP), established by section 1102 of the CARES Act.
The CFPB interpretive rule states that the stimulus payments will not be considered “government benefits,” and as such, not subject to the restrictions in the Electronic Fund Transfer Act and Regulation E.
The April 7, 2020 emergency order requires companies with either 500 or more employees within the city of Los Angeles or 2,000 or more employees nationally to provide up to 80 hours of additional paid sick time for reasons related to COVID-19. The order, which covers individuals who perform any work in Los Angeles, aims to reach workers not covered by the federal paid sick leave legislation. A number of other cities — including San Francisco and Seattle — and states — including California, Colorado, Michigan, New Jersey, and New York — have also expanded leave policies in recent weeks.
An updated version of the Working Paper, Regulating in Pandemic: Evaluating Economic and Financial Policy Responses to the Coronavirus Crisis by Hiba Hafiz, Shu-Yi Oei, Diane M. Ring, and Natalya Shnitser has been posted. The Working Paper is revised and updated to incorporate the CARES Act (H.R. 748) as well as recent action by the Federal Reserve, the Department of Labor, and other agencies.
The Department of Labor just released statistics for Unemployment Claims for the week ending April 4, 2020 revealing 6,606,000 new claims. This number marks “a decrease of 261,000 from the previous week’s revised level [which had been revised] upward by 219,000 from 6,648,000 to 6,867,000. The 4-week moving average was 4,265,500, an increase of 1,598,750 from the previous week’s revised average.”
Over the past two weeks, the federal government has unleashed a series of new programs providing business loans, refundable tax credits, direct payments to Americans, and enhanced unemployment compensation — all in an effort to begin to manage the fallout from the COVID-19 crisis. In the midst of this flurry of legislative action and program rollouts, the GAO has issued a report detailing patterns of improper payments (estimated at almost $175 billion for fiscal year 2019) across 6 federal agencies. Although the report includes recommendations, some targeted and some more general, it seems unlikely that these agencies (or others looking on) can quickly learn from the analysis and modify systems as they race to distribute funds in an economic crisis. Moreover, in a time of constrained personnel resources due to COVID-19, stay-at-home orders, and overwhelming demand, agencies may find their ability to execute accurate delivery even more constrained than in the past.
Today the Department of Labor released stark new unemployment statistics: For the week ending March 28, 2020, a total of 6,648,000 unemployment claims were filed. This number represents an increase of 3,341,000 over last week’s numbers. Thus, during the past two weeks almost 10 million Americans have filed for unemployment.