U.S. Begins Making Payroll Support Payments to Airlines
The U.S. Department of the Treasury has finalized agreements with Allegiant Air, American Airlines, Delta Air Lines, Southwest Airlines, Spirit Airlines, and United Airlines to receive payroll relief payments through the Payroll Support Program, as authorized by the CARES Act.
So far, the U.S. has issued “a total of $2.9 billion in initial payments” through the program.
“All funds provided under the program”, the Treasury Department explains, “can be used only for the continuation of payment of employee wages, salaries, and benefits.”
As laid out in the CARES Act, all airlines receiving payment support must also “refrain from conducting involuntary furloughs or reducing pay rates and benefits”. United Airline, who expects “to receive approximately $5 billion from the federal government”, released a statement affirming “that there will be no involuntary furloughs or pay rate cuts for U.S. employees before September 30.” However, they are encouraging employees to enroll in “new voluntary leave offerings and voluntary separation programs”, and cautioned that the “challenging economic outlook means… our overall workforce [will likely] be smaller than it is today, starting as early as October 1.”