Thousands of workers were fired or put on involuntary leave after aviation contractors in the United States were scheduled to receive government aid under CARES act, which prohibited any layoffs and furloughs, an investigation by the U.S. House of Representatives finds.
The reason behind firings was the delay with which the U.S. Department of Treasury started distributing funding. While the act states that the distribution should have started on April 6, 2020, many companies did not receive funds until many months later.
$3 billion were relegated under the act as a payroll support for aviation contractors and should have covered workers’ wages when the aviation industry collapsed. Unable to sustain their workforce, and without the promised funding, firms started laying off and furloughing employees.
16,500 workers across 15 companies were impacted, Reuters reports. Companies still received the aid based on pre-pandemic numbers, despite many workers, whose payroll the aid was supposed to cover, being fired.
The report blames the Treasury, saying that had it met deadlines set by Congress, many jobs across the industry could have been saved.
The investigation comes as the House of Representatives, Senate, Treasury and the White House continue heated negotiations on the second round of government aid for the aviation sector and other industries impacted by COVID-19 pandemic.