Treasury Stance on Virus Relief Benefits Draws Ire

Here are the day’s top coronavirus stories from the team at Bloomberg Law:

• TREASURY RULES GET BLOWBACK: Guidance on parts of recently enacted virus relief has sparked criticism from lawmakers that the IRS and Treasury aren’t interpreting the law correctly. Disagreements on these issues can make it difficult for businesses to make decisions about their workforce and operations, according to tax practitioners.
• JOBLESS AID RESTRICTIONS: Laid-off workers in some states that are allowing businesses to reopen may soon have to prove that they’re actually looking for jobs again in order to continue receiving unemployment benefits. At least a half-dozen states are encouraging companies to report employees who refuse to return to work, so that officials can root out improper claims for aid.
• INSURERS’ COSTS COULD SPIKE: Employers and insurers so far are coming out ahead in terms of the health-care costs they are incurring during the pandemic, but they may face sharply higher costs down the road, health-care analysts say. Some analysts see higher costs for deferred care and a big hit on premiums looming.

Editor’s Top Picks

Fed Presidents Warn Business Failures May Create Lasting Damage
Federal Reserve officials warned the partial shutdown of the U.S. economy would result in a decline in the current quarter of historic proportions and risk the potential of massive bankruptcies that could create a lasting scar.

Stranded Super-Rich Confront Tax Chaos After Lockdowns
As nations have closed borders, some individuals are confronting unexpectedly complex tax situations. These include the prospect of higher levies from spending too many days in a foreign locale, or having to shelve plans to obtain tax breaks by moving abroad.

Drug Trials Miss Groups Hardest Hit by Virus, Study Says
The black and Hispanic populations bearing the brunt of the coronavirus outbreak are also woefully underrepresented during clinical trials for drugs, a new study says. The Food and Drug Administration has warned the lack of diversity in studies means that research may miss how medications can affect some populations differently.

Hair Cuttery Owner Must Pay $1.1M in Pre-Virus-Closure Wages
A hair salon corporation that abruptly closed 750 locations during the pandemic, without cutting workers their final paychecks, must pay thousands of employees under a court order, the Labor Department said. The case comes as federal wage enforcers also respond to a growing number of complaints from workers of being stiffed on paychecks.

DeVos Sued for Cutting Off Poor Students From Federal Virus Aid
A group of community colleges in California sued U.S. Secretary of Education Betsy DeVos for cutting more than half of the students enrolled in the spring semester from benefiting from the federal government’s coronavirus relief package. The colleges said the move would affect 800,000 of the 1.5 million students in the system.

Strip Clubs Cleared by Judge to Get SBA Covid-19 Loan Money
Dozens of strip clubs are eligible to receive money under the federal loan program after the Eastern District of Michigan found that the U.S. Small Business Administration had no authority to bar them from eligibility. The SBA had excluded a variety of businesses, including banks, political lobbying firms, certain private clubs, and businesses of a “prurient sexual nature.”

Bain-Backed Sushi Chain Files Chapter 11 Bankruptcy, Eyes Sale
Sustainable Restaurant Holdings Inc., a small chain of seafood restaurants backed by Bain Capital Double Impact Fund, will try to sell itself through bankruptcy after the virus lockdown strained its finances.

Wilson Sonsini’s Tech Arm Automates Return-To-Work Guidance
Wilson Sonsini’s legal technology arm, SixFifty, is betting it can tap into a market for tech-based employment law assistance with a new “toolset” to help companies dealing with safety issues bring employees back to the workplace.

INSIGHT: Steps to Limit Exposure to Pharma, PPE Shareholder Lawsuits
Public companies developing or manufacturing vaccines, and personal protective equipment may face more shareholder lawsuits. King & Spalding attorneys offer mitigation measures to consider relating to SEC disclosures and public statements.

INSIGHT: Covid-19 State Legislation Could Shake Up Insurance Contracts
Spurred on by outbreak-related business losses, states are taking the lead in legislation to remove certain requirements from insurance contracts. Norton Rose Fulbright attorneys say insurers may look to the contracts clause in the Constitution to challenge the validity of these bills.

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Editor’s Note: The Bloomberg Law news team has been closely covering the legal, regulatory, business, and tax implications of the coronavirus pandemic. This daily email highlights the top stories of the day, across practice areas. To unsubscribe, please adjust your Bloomberg Law newsletter settings. For assistance, contact our help desk at 888-560-2529 or help@bloomberglaw.com.