As another year comes to a close, we recommend finding time to reflect on 2021…
Lots of new information today. The rules are changing daily, and we hope you are paying attention!
For anyone who has applied for the PPP SBA loan, the information we have so far about the timeframe for using the funds is as follows:
You must receive the money from your bank within 10 days of signing your loan documents. Once you receive the money for the PPP loan, you have 8 weeks to use the loan proceeds. Remember that at least 75% must go toward payroll costs in order to be eligible for 100% loan forgiveness. We suggest you calculate your payroll costs in the same way you put it together for the loan application.
The legislation requires that at least 75% of the funds go toward payroll costs; however, in the loan application you had to exclude certain taxes or workers compensation, etc. Make sure you stay consistent with the loan application as you start to fund payroll after receiving your loan proceeds.
As of today, we suggest you use the same formula you used to estimate your payroll costs in the loan application, and then make sure you dedicate that same amount toward payroll once you receive the loan proceeds. That should ensure you qualify for loan forgiveness.
The 8 weeks end on June 30th, 2020, this means if you don’t get your loan proceeds until June 1st, you still must use the money for the 8 weeks preceding June 30th. We can tell you that senator Rubio from Florida and some others are trying to get these dates changed in the new legislation in the new round of stimulus bills they are hoping to pass. This is just wishful thinking at this time and nothing has been passed yet, so as of today you must go by the 8 weeks from when you receive your loan.
We have some good updates on unemployment that we want to share with you as well.
The additional $600 per week that the Fed added to Unemployment Benefits are in place through July 31, 2020. After that, the additional federal monies for people on unemployment will cease.
When this was passed as part of the CARES Act, these federal funds were not allowed to affect your company’s experience mod. However, the state payments may affect your experience mod. Each state has either an executive order or specific legislation that dictates whether these claims and payments will change your experience mod.
If you need to know if your state has passed legislation that would affect your experience mod, please let us know and we can tell you. The Governor of Louisiana has issued an executive order ensuring that any claims due to COVID-19 will not affect your SUTA (your state unemployment tax) rate moving forward.
The DOL and other agencies are trying to add some teeth to these laws in order to protect employers from employees who intentionally leave just to collect these higher unemployment rates. If an employee quits to get unemployment, they will be committing fraud, according to this legislation. There are similar rules that apply when you bring back employees who have been laid off.
If you have an employee accept his or her job back and then he or she doesn’t show or call in, then you can terminate them just like during normal times.
Be careful here!
If employees say they can’t come back due to the perceived risk of infection, they must supply documentation as to why they should not come back to work. We are happy to walk you through these issues if you want to call our HR team to discuss any of these scenarios.
For employees that have had a reduction in pay or hours due to COVID-19, it is unclear if they are eligible for the $600-dollar federal unemployment funds. It’s on a state-by-state basis, and it’s very hard to find any written guidelines on this issue. We can tell you that these federal unemployment dollars will be taxable to the employee.
- Deferral of employment tax deposits – this is an IRS publication giving guidance on your payroll tax deferrals. Delta is still trying to get more details on these deferrals. Remember these deferrals are not forgivable, so you will need to decide whether deferral is the right move for your company.
- COVID-19 FAQ – this is a good FAQ put out by the Louisiana Workforce Commission covering 26 questions in a fairly easy to understand format.
- SBA Interim Final Rule – this document was released by the SBA around noon today. Honestly, we have not had a chance to go through it to see if any major changes are included. Remember, these documents change daily, so just know this is the latest information put out by the SBA on their FAQ’s.
- EEOC FAQ’s – the EEOC has come out with its own FAQ about COVID-19 and the ADA, the Rehabilitation Act, and Other EEO Laws.
We are here to help and have some new flyers that we’ll be sending out tomorrow for the latest things from the CDC you can post.
Please don’t hesitate to call if we can answer anything for you or your employees.