The CARES Act Impact on Employers and the Gig Economy

By Sophia Behnia

Sophia Behnia advises and represents employers in a broad range of employment and labor matters arising under federal and state laws, including wage and hour laws, and class actions. While Sophia handles all types of wage and hour cases, she focuses her practice on defending clients against claims of independent contractor misclassification. Her successes include serving as trial counsel on behalf of a "gig economy" company in four arbitration wins before arbitrators and retired California Superior Court judges, finding drivers were properly classified as independent contractors.

The Coronavirus Aid, Relief, and Economic Security Act (H.R. 748, the "CARES Act"), was enacted on Friday, March 27, 2020 with the intention of stimulating the U.S. economy during the COVID-19 crisis. The CARES Act has had an immediate impact on employers’ operations and contains several key provisions employers should take note of as we work through this pandemic. This article summarizes several of the CARES Act’s employment-related provisions, including the retirement plan provisions, health and welfare provisions, and executive compensation provisions. This article then discusses how the CARES Act expanded the availability of unemployment insurance to include independent contractors, and how this expansion has affected the gig economy.

Retirement Provisions