Brief primer for new and amended COVID-19 employment laws

California has recently enacted or amended COVID-19 employment laws. Some of the laws have broad applicability. For example, Assembly Bill (AB) 1577 amends California's tax treatment of various loans related to the COVD-19 pandemic. Further, Senate Bill (SB) 93 provides a comprehensive framework for some employers to rehire employees who were laid off because of the pandemic.

Other laws are rather narrow. For instance, AB 654 prohibits the California Division of Occupational Safety and Health (Cal/OSHA) from issuing COVID-19-related prohibitions that "materially impact" delivery of renewable natural gas.

First, the good news: Tax relief for employers

The cancellation of a debt is normally a taxable event and usually must be reported as income. AB 1577, however, excludes forgiveness of certain loans from the definition of "gross income" for California tax purposes and thereby reduces taxable income.

Specifically, AB 1577 applies to loans forgiven under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), the Paycheck Protection Program and Health Care Enhancement Act, or the Paycheck Protection Program Flexibility Act of 2020. The exclusion applies to "taxable years" beginning on and after January 1, 2020.

Framework to rehire displaced workers