Senate Republican leadership on July 27, 2020, unveiled the Health, Economic Assistance, Liability Protection, and Schools Act (HEALS Act), a draft plan to provide $1 trillion in coronavirus relief funding. Senate Majority Leader Mitch McConnell (R-Ky.) outlined the pillars of the proposal, which include another round of $1,200 in direct payments to individual Americans, more money for the Paycheck Protection Program (PPP), a reduction in pandemic federal unemployment benefits, liability protection and more than $100 billion for reopening schools and colleges.

A package of individual bills, the proposal provides the option of passing parts of the agenda now - such as extensions of unemployment insurance or schools funding - and leaving the others for later action. The introduction of the bills was the first step toward negotiating a compromise plan with House Democrats, who approved their $3.5 billion relief plan, the Health and Economic Recovery Omnibus Emergency Solutions Act (HEROES Act), on May 15, 2020. (See Holland & Knight's previous alert, "Local Government Provisions of Interest in the HEROES Act," May 15, 2020.)

The package of bills includes the following:

Aid for State and Local Governments

The bill does not include additional, direct assistance to state and local governments Rather, the bill extends the time frame in which recipients of the Coronavirus Aid, Relief, and Economic Security Act's (CARES Act) $150 billion Coronavirus Relief Fund (CRF) can utilize the funding while also providing more flexibility - allowing some funds to be used to cover revenue shortfalls.

Specific provisions in the GOP proposal:

  • extension of the period over which CARES Act relief funds can be used by 90 days beyond the end of a state/local government's 2021 fiscal year (e.g., fiscal year end of June 30, 2021, means that the government has until Sept. 30, 2021, to expend funds)
  • expansion of the allowable uses of relief funds to cover revenue shortfalls; a government receiving CARES Act relief funds can use up to 25 percent of those funds to cover revenue shortfalls

Liability Protections

Sen. Cornyn's SAFE TO WORK Act would shield businesses, schools, nonprofits, government agencies and other organizations from COVID-19-related lawsuits through Oct. 1, 2024, as long as they make "reasonable" efforts to follow public health guidelines and do not commit acts of "gross negligence" or "intentional misconduct."

In addition, the Occupational Safety and Health Administration (OSHA) will not cite an employer that has been "relying on and generally following" government standards and guidance. OSHA has already instructed its inspectors that employers who are following guidance from the agency or the Centers for Disease Control and Prevention (CDC) will not be cited under the Occupational Safety and Health Act's general duty clause.

Key provisions and details in the SAFE TO WORK Act:

  • The proposal would give employers temporary protection from lawsuits stemming from workplace coronavirus testing. This shield would supersede any local statute or regulation related to personal injury lawsuits stemming from coronavirus exposure, but it would not preempt broader local liability reforms or workers' compensation systems.
  • The proposed liability shield would cover claims from Dec. 1, 2019, until Oct. 1, 2024.
  • The bill clarifies that when a business provides training, personal protective equipment (PPE) or other assistance to an independent contractor or a franchisee's employee, those actions cannot be used as evidence of an employer-employee relationship.
  • The proposal would place a cap on damage awards; compensatory damages would be limited to the economic losses incurred as a result of the injury, as long as the harm wasn't a result of "willful misconduct."
  • Businesses would not be liable for claims related to violations of the Worker Adjustment and Retraining Notification Act (WARN Act), as long as the job loss took place during the pandemic. The federal law requires companies to give workers at least 60 days' notice before plant closures or mass layoffs lasting more than six months.

Direct Payments to Americans

The legislation provides $1,200 stimulus payments to individuals with incomes of $75,000 or less, or $150,000 for couples. Republicans propose to enhance benefits for adult dependents. Filers with dependents of any age would receive an additional $500 payment, whereas CARES Act additions for dependents were only for those dependents under age 17. The eligibility guidelines are the same as those in the CARES Act.

Unemployment Insurance

The GOP proposal - as part of the American Workers, Families, and Employers Assistance Act - extends federal pandemic unemployment compensation benefits at a rate lower than the $600 per week provided in the CARES Act. For two months (or by Oct. 5, 2020), the benefits would be set at $200 per week on top of state-level benefits, which vary. After that, states would provide benefits equal to 70 percent of previous wages, with the federal supplement additionally capped at $500 per week. States would be allowed to apply for a waiver to secure up to two additional months to transition to the new calculation.

Pandemic-related federal supplemental unemployment benefits for millions of Americans expires at the end of July. The Republicans proposal will temporarily lower expanded unemployment benefits, then shift states to a wage-replacement model.

Labor and Employment

The GOP emergency appropriations proposal would provide $2.5 billion to the U.S. Department of Labor (DOL), including $1.15 billion to assist state unemployment insurance operations as well as $500 million for grants to help workers find new employment.

Paycheck Protection Program (PPP)

The GOP proposal would raise the cap to $750 billion and extends the program through Dec. 31, 2020.

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