WASHINGTON (WAVY) — On Friday, four U.S. Senators released the Paycheck Security proposal to help cover benefits and secure paychecks for employees that work for businesses and non-profit organizations affected by the coronavirus.
Although the CARES Act has provided much-needed support, U.S. Sens. Mark R. Warner (D-VA), Bernie Sanders (I-VT), Doug Jones (D-AL) and Richard Blumenthal (D-CT) felt stronger relief was still required to keep the “economy afloat.”
The Paycheck Security Act is a grant-based program designed to help meet the challenges small businesses are facing during the coronavirus pandemic. If passed, the act would allow employees to remain employed providing businesses with a smoother transition when the economy becomes stable again as well as preventing millions of businesses from filing for bankruptcy.
“It will save tens of millions of jobs and millions of businesses from destruction. Our people and economy will be able spring back to work as soon as it is safe to do so,” said Emmanuel Saez, Professor of Economics, University of California Berkeley.
The proposal also states that since the beginning of April, one in four small businesses have closed and predictive data shows that nearly 40% of small businesses may close for good by the fall as the number of unemployment cases rises.
“The health and economic crisis brought on by COVID-19 is unprecedented in American history. More than 22 million people have already filed unemployment claims, and projections suggest that the unemployment rate could top that of the Great Depression by this summer if Congress does not do more to help businesses and workers stay afloat,” said Sen. Warner.
Under the terms of the Senators’ paycheck security proposal:
- All employers who have suffered a month-over-month drop in revenues of at least 20 percent will be eligible to receive grants covering a portion of payroll and benefits for at least the next six months.
- Grants will cover salaries and wages up to $90,000 for each furloughed or laid-off employee, plus benefits, as well as up to an additional 20 percent of revenues to cover fixed operating costs such as rent, utilities, insurance policies, and maintenance.
- Employers and non-profits of all sizes will be eligible if they can verify revenue losses and don’t otherwise have more than 18 months of their payroll available in cash.
- Businesses that have received a Paycheck Protection Program loan or an Economic Injury Disaster Loan, or have otherwise accessed the Federal Reserve 13(3) facilities, will be ineligible unless they exhaust these other programs or use the Payroll Security Program grant to pay back their existing loans.
“This is a man-made crisis. Our job now is to join the rest of the industrialized world and pass the Paycheck Security Act,” said Sen. Sanders. “This is not a partisan issue: People across the political spectrum agree that Congress has got to build upon previous legislation to keep people on their employers’ payrolls and fully restore the wages and benefits of every rank-and-file worker in America during this pandemic.”
The full proposal can be read online.
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