CARES Act Executive Compensation Provisions

The $2.3 trillion Coronavirus Aid, Relief, and Economic Security (CARES) Act1 provides a variety of stimulus and relief programs to employers negatively impacted by COVID-19. Each program has different eligibility requirements and may impose limits on employee compensation that can be paid by companies that participate in the program. This alert discusses those programs and limits. This alert also discusses the limited payroll tax relief provided under the CARES Act. READ MORE

Unemployment Insurance Weekly Claims

The COVID-19 virus continues to impact the number of initial claims and its impact is also reflected in the increasing levels of insured unemployment. In the week ending April 4, the advance figure for seasonally adjusted initial claims was 6,606,000, a decrease of 261,000 from the previous week's revised level. The previous week's level was revised up 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. The previous week's average was revised up by 54,750 from 2,612,000 to 2,666,750. READ MORE

This company pays its workers a $70,000 minimum salary, and that’s helping it weather the coronavirus crisis

It’s been five years since we announced a $70,000 minimum wage at our company, Gravity Payments. Since then, our revenue has since tripled and our headcount and customer base have doubled. Meanwhile, our employees have made major improvements to their lives, such as buying houses, starting families, saving for retirement, and eliminating debt. READ MORE

Executive Compensation Limits In Cares Act Raise Questions

The sweeping federal stimulus bill known as the ‘‘Coronavirus Aid, Relief, and Economic Security Act’’ or ‘‘CARES Act’’ includes a provision intended to prevent federal loans or loan guarantees from being used to enhance senior executive compensation. This provision, while seemingly simple on its face, raises many interpretative questions, and prompt regulatory guidance will be necessary for its implementation. READ MORE

The CARES Act and Compensation – What Employers Need to Know

On March 27, 2020, the President signed into law the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) (H.R. 748).

In this blog post we (1) lay out an initial action plan for employers considering obtaining relief under the CARES Act, (2) summarize the compensation-related provisions of the CARES Act, and (3) identify the key questions that the CARES Act leaves unanswered. READ MORE

Banker Bonuses Are a Pre-Coronavirus Thing

Financial regulators are applying all of the lessons of the 2008 credit crisis at record speed. In the past few weeks, they’ve worked with central banks to pump liquidity into markets and to make it easier for banks to lend. It’s essential now that lenders keep providing money to companies and households whose incomes have evaporated in the Covid-19 lockdowns. If the banks stop functioning, what hope for the rest of the economy? READ MORE

The 4 Ways to Judge Minimum Wage Laws

Minimum wage legislation is exploding. What began in 1938 as a modest federal requirement of 25 cents an hour has recently become a major area of policy innovation, with states and cities vying with each other to impose hefty increases. In just the past decade, 26 states have enacted increases in minimum wage requirements. The Democratic Party, in its 2016 platform, called for raising the national minimum wage to $15, and seems headed in the same direction this year. READ MORE

COVID-19 FAQs: For Employee Benefits & Executive Compensation

Coronavirus (COVID-19) raises serious concerns for employers of all shapes and sizes, across all industries and in every business sector. As the impact of COVID-19 continues to grow, many employers are faced with new challenges that affect not only their businesses and their employees, but the health and welfare, retirement and executive compensation plans and programs on which those employees rely. These new issues are arising in addition to the myriad benefit plan challenges that employers face each day. READ MORE

Impact of the CARES Act on Executive Compensation

The CARES Act restricts how much executive compensation can be paid by employers that avail themselves of loans and loan guarantees from the US Treasury’s Exchange Stabilization Fund under Title IV of the CARES Act. Employers seeking this relief need to carefully assess the impact of these restrictions before applying for loans or loan guarantees. Participation in the Exchange Stabilization Fund is conditioned on complying with the executive compensation restrictions. Identifying whose pay will be restricted and limiting payments under existing contracts is likely to be challenging. READ MORE