HEROES Act Impact on Human Service Organizations’ EmployeesJune 1, 2020
On May 15, the House of Representatives passed the Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act, a sweeping $3 trillion coronavirus relief package. However, unlike prior stimulus legislation passed this year, the bill was passed almost entirely with just Democratic votes, and Republican Senate leadership has made clear that they are not planning to bring the House bill up for a vote any time soon. Though the HEROES Act as written has little chance of reaching the President’s desk, it does provide a useful indicator of what House Democrats will prioritize in future negotiations with the Senate. This article highlights some of the provisions in the HEROES Act that would most directly impact human service organizations’ employees.
Hazard Pay: The bill would establish a new $200 billion Pandemic Premium Pay program that would increase essential workers’ wages by $13 per hour for services performed from January 27, 2020 to 60 days after the end of the public health emergency. This retroactive payment would be capped at a total of $10,000 per worker ($5,000 for workers with salaries greater than $200,000). This provision in the HEROES Act is one that might actually gain traction with Republican legislators because it is similar to a proposal Senator Mitt Romney (R-UT) introduced in March. For the members of the human service community fighting on the front lines of this crisis, hazard pay is not only a way for the public to show their appreciation of the tireless work they are performing, but would ease the financial strain this crisis has taken on them and their families.
Unemployment Insurance: The bill would extend the Unemployment Insurance (UI) provisions put in place by the CARES Act from their current expiration date of July 31, 2020 to January 31, 2021. This would include the $600 weekly UI benefit increase, as well as the expanded eligibility requirements. This section of the bill is likely to face stiff opposition from Senate Republicans who were already critical of the original UI expansion as too generous and claim it disincentivizes workforce participation.
Paid Family & Sick Leave: The bill would close the loophole left open in the Families First Coronavirus Response Act which exempted employers with more than 500 employees from paid leave requirements. The bill would also increase daily sick leave pay from $200 to $511, as well as raise the aggregate benefit caps from $10,000 to $12,000, and the duration from 50 to 60 days. Senate Republicans worked hard in March to keep large corporations exempt from paid leave rules and while their opposition likely hasn’t slackened since then, the Democratic leadership has made it clear that it is one of their core sticking points for any future coronavirus aid bill to pass the House. Expanding the paid leave requirements has been a top priority for the National Assembly, and we are glad to see it is also one for House leadership in this latest bill.
Employee Retention Credit: The bill would retroactively increase the value of the employee retention credit from the current 50 percent of $10,000 for just one quarter to a maximum of 80 percent of $15,000 for up to three quarters. This would effectively increase the tax credit to employers from a maximum of $5,000 to $36,000 over the course of a year. It would also expand eligibility rules to make available a partial credit for businesses that experience a 10 to 50 percent decline in revenue. Additionally, the bill would provide a 50 percent refundable payroll tax credit for qualified fixed costs, including rent, mortgage, and utility payments for employers with 1,500 or fewer employees or revenue less then $41,500,000. This is another section of the bill that shows signs of having bipartisan appeal, and if passed would give nonprofit organizations increased flexibility in order to retain staff.
Paycheck Protection Program (PPP): The bill would eliminate the 500 employee cap for nonprofit organizations as well as set aside 25 percent of total PPP funding specifically for the needs of nonprofits. The bill would also expand the forgiveness period by six months and eliminate the rule mandating 75 percent of PPP loans be used for payroll in order to be eligible for forgiveness.
Main Street Loan Program: The bill would require the Federal Reserve to establish a low-cost loan option with deferred payments tailored to the needs of nonprofits. For nonprofits that are ineligible for PPP loans and that predominantly serve low-income communities, loan forgiveness would be granted similar to that of PPP requirements.
NHSA Position on the HEROES Act
The HEROES Act is filled with sound policies designed to provide short-term financial security to families and communities during this crisis. However, the HEROES Act fails to address the structural inequalities that are at the heart of this crisis. Rather than creating temporary programs that will expire at the end of the year, we urge Congress to use this crisis to make permanent improvements to human services programs.
Human services are designed to strengthen our community by providing the solid foundation of essential supports that help people live up to their full potential. The sector’s deep experience and commitment to the well-being of every one of our community members makes us uniquely prepared to help our communities navigate through the immediate response to COVID-19 and the long-term rebuilding process that will follow. Our policymakers must make a meaningful and sustained commitment to bolstering our communities’ health and human service infrastructure through adequate funding and must ensure that human service leaders have a seat at the table as important decisions are made about our communities’ response.