This is a continuation of our series addressing ways companies can protect themselves during government enforcement actions related to COVID-19. For more information, see our previous articles focused on general corporate best practices, the health care industry and public companies.
The economic disruptions wrought by the COVID-19 pandemic have been particularly acute for government contractors. State quarantine measures and the closure of both contractor and government worksites meant many contractors were unable to perform ongoing contracts, thus risking a lapse in payment and the need to lay off or furlough workers. To mitigate this risk, Congress passed §3610 as part of the March 27, 2020 Coronavirus Aid, Relief, and Economic Security Act (CARES Act). That brief provision gives federal agencies authority to reimburse contractors for paid leave to employees who are unable to work due to the pandemic. The Department of Defense (DoD)—which obligated by far the most funds pursuant to §3610—has issued guidance, instructions, and regulations clarifying eligibility for relief and the procedures contractors must follow in order to be reimbursed. Eligible contractors should be mindful of this guidance, summarized below, and carefully monitor ongoing developments.
