On 11 March 2021 the Rescue Plan Act 2021 was signed into law, providing much-needed relief that will enable airlines and aviation contractors to keep employees on payrolls. The act provides eligible air carriers and eligible contractors with $14 billion and $1 billion in financial assistance, respectively, exclusively for the continuation of employee wages, salaries and benefits.
Unlike previous payroll support legislation, the Rescue Plan Act payroll support funding is not available to all US carriers and contractors. To be eligible for relief, air carriers and contractors must have received financial assistance under the Consolidated Appropriations Act (CAA) 2021, which was passed in December 2020. Additionally, 'eligible air carriers' are those that:
- provide air transport as of 31 March 2021;
- certify to the Treasury Department that they:
- will refrain from furloughs or pay cuts until 30 September 2021 or until funds are exhausted;
- will refrain from purchasing certain equity securities, paying dividends or making capital distributions until 30 September 2022; and
- agree to certain restrictions on executive compensation during the two-year period beginning 1 April 2021; and
- implement no furloughs or pay or benefit cuts between 31 March 2021 and the date on which they make the required certification to the Treasury Department.
Similar restrictions apply to aviation contractors which seek relief under the act.
The amount that individual air carriers will receive will be proportional to the amount that they received under the CAA. Aviation contractors will receive the same amount that they received under the CAA.
The bill required the Treasury Department to issue streamlined procedures by 16 March 2021 to enable eligible air carriers and contractors to request financial assistance. Initial disbursements were expected to have followed by 21 March 2021.
