CARES Act

School closures associated with the COVID-19 prevent some employees from performing their jobs. Consequently, many school districts are forced to decide whether they will continue compensating employees who cannot work – remotely or on-site – throughout this challenging time. Congress created the CARES Act to provide assistance for those affected by unemployment.

The CARES Act is designed to provide financial support and resources to individuals and businesses affected by the COVID-19 outbreak and was signed into law on March 27, 2020. This economic stimulus package is intended to encourage eligible employers to retain employees. Among the numerous guarantees offered by the CARES Act are the Education Stabilization Fund and the Governor's Education Relief Fund, which offer further financial support and reassurances for educational related purposes.

Education Stabilization Fund

The CARES Act establishes a $30.74 billion Education Stabilization Fund, allocating $13.5 billion for elementary and secondary education purposes. The funds will be distributed to states based on their share of ESEA Title I-A funds. Subsequently, state education agencies will be required to distribute at least 90% of funds to local education agencies, such as school districts and public charter schools in similar proportion to funds received under Title I-A for the most recent fiscal year. These local education agencies will be granted flexibility to use their funds for a variety of COVID-19 response purposes. Approved purposes include providing resources necessary to address the needs of individual schools; maintaining the operation of and continuity of services; and employing existing staff. Any remaining funds are to be used for COVID-19 related emergency needs.

To receive Education Stabilization Funds, an entity must be deemed eligible. The statute explains that to be considered eligible to receive these funds:

A local educational agency, State, institution of higher education, or other entity that receives funds under the Education Stabilization Fund, shall to the greatest extent practicable, continue to pay its employees and contractors during the period of any disruptions or closures related to Coronavirus.

Therefore, school districts pursuing these funds should continue paying their employees and vendors to the fullest reasonable extent to ensure compliance with the “greatest extent practicable” requirement. Alternatively, districts that are unable to continue paying contracted employees and vendors are advised to document their circumstances and be prepared to explain the discontinued payments if they plan to pursue eligibility in the future.

Federal Pandemic Unemployment Compensation (FPUC)

Under the CARES Act, the South Carolina Department of Employment and Workforce (SCDEW) implemented further support for employees who cannot work - remotely or on-site - due to COVID-19. This assistance comes by way of the Federal Pandemic Unemployment Compensation (FPUC) and will ease the sudden financial burdens of countless employers. Specifically, the FPUC provides for an additional $600 per week in unemployment insurance benefits for eligible claimants. This temporary federal funding has been approved and will be available from the claim week ending April 4, 2020, through the claim week ending July 25, 2020.

Governor's Education Relief Fund

In addition to the Education Stabilization Fund, the Federal Pandemic Unemployment Compensation, and other forms of relief provided by the CARES Act, each state will also receive a share of the $3 billion Governor's Education Relief Fund. Governors are permitted to use these funds at their discretion to provide emergency support grants to K-12 schools, colleges and universities, and early education providers.

The CARES Act, and specifically the Education Stabilization Fund, offer guidance, support, and flexibility for school districts by providing financial reassurance for eligible districts. The CARES Act affords school districts with options and motivation to offer relief to school bus drivers, mechanics, support staff, and countless other employees who are not able to work due to COVID-19. White & Story continues to operate and serve our clients, including providing our clients and friends with education about this new law and addressing associated questions or concerns.