When we met on the Client Call this past Friday, we were awaiting the president’s signature on legislation amending terms of the PPP and loan forgiveness. As anticipated, this legislation has since been signed. We strongly encourage all to become familiar with the revised information.
As discussed, HR 7010 amends the Paycheck Protection Program and Loan Forgiveness terms. These changes include:
1. Covered period extended from 8 to 24 weeks.
2. Can spend more proceeds on non-payroll cost (60/40). Mark cautions: BE CAREFUL with this. The bill seems to create an all or nothing regarding loan forgiveness with the 60% of payroll cost.
3. Longer time to replace FTE’s and restore salaries.
4. Some businesses that remain partially or fully closed through the end of the year will get new relief.
Mark Jones was also joined by Barbara Jennings, a human resources consultant with Towne Benefits to discuss reopening offices and the implications for human resources. Barbara has spent over thirty years in human resources management primarily in the legal and banking fields. She works with clients and brokers, helping them navigate the complex world of managing people in the 21st century.
As an addendum to the conversation, Barbara generously offers this follow up to the presentation. She writes the following:
I made the statement that the FFCRA (Families First Act) ESL and EFMLA apply to all employers. I should have said that it’s actually employers with under 500 employees, and there is a long list of employers who are not required to offer these benefits, most of which fall under the healthcare industry.
Also, employers with fewer than 50 employees may exempt themselves under the following circumstances:
Employers, including religious or nonprofit organizations, with fewer than 50 employees (Small Business) are exempt from providing COVID-19 Qualifying FMLA Leave when doing so would jeopardize the viability of the small business as a going concern. A Small Business may claim this exemption if an authorized officer of the business has determined that:
- The provision of COVID-19 Qualifying FMLA Leave would result in the Small Business’ expenses and financial obligations exceeding available business revenues and cause the Small Business to cease operating at a minimal capacity;
- The absence of the employee or employees requesting COVID-19 Qualifying FMLA Leave would entail a substantial risk to the financial health or operational capabilities of the Small Business because of their specialized skills, knowledge of the business, or responsibilities; or
- There are not sufficient workers who are able, willing, and qualified, and who will be available at the time and place needed, to perform the labor or services provided by the employee or employees requesting COVID-19 Qualifying FMLA Leave, and these labor or services are needed for the Small Business to operate at a minimal capacity.
Although this didn’t come up, I feel that I should mention it since there is confusion about it and I have gotten questions about it. In order for the employer to take the tax credit for the ESL or the EFMLA, the employer must have work to be performed that an employee is unable do, either on-site or via telework due to one of the 6 COVID reasons. If the employer does not have work to be performed, then the employees would be laid off or furloughed, in which case they will probably qualify for unemployment, but they would not qualify for ESL or EFMLA, nor can the employer take a tax credit with there is no work.
Barbara has made this useful decision tree to further help. We are grateful to Barbara for sharing her expertise with us.
Stay tuned for Part II of this important conversation as we welcome Corbin Granger, also of Towne Benefits, to discuss COVID impacts to employee benefits.