Article

What your company needs to ask itself regarding Coronavirus stimulus acts

Note: Seraph is not a legal advisor, we recommend businesses consult their counsel before making decisions. 

 

Three stimulus acts have come out over the last few weeks, it’s essential to know how these acts will impact your business.  While the Coronavirus Preparedness and Response Act primarily funds the nation’s healthcare response, the other stimulus acts directly tackle the economic consequences of mass quarantine by providing support for employers and employees. The comprehensive nature of these government actions will have consequences for every business.

Quick reviews or headline glances may leave some businesses thinking they can’t benefit from any of the available programs, but reviewing the acts is important to both realize government benefits and plan for new disturbances. How expanded sick leave, and FMLA will impact your company once business starts to resume will depend a lot on timing.

 

I don’t think my business qualifies.

 

Explore if you qualify.

Aid for small businesses like the Paycheck Protection Act found within the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) will allow many companies to not only hold on to their employees but also will enable them to finance their operations.  The Paycheck Protection Act provides (through SBA 7(a) lenders) low-interest loans to aid small businesses with funds to keep their operations going.  Companies can support not only payroll with these loans but utilities, rent, and healthcare premiums, to name a few.  If used for payroll (75%), mortgage interest, rent, and utilities, the loan may be forgiven.  Forgiveness is also based on maintaining or quickly rehiring employees and maintaining salary levels.

How do you know if you qualify?  

The acts classify a small business as having less than 500 employees, but there are a few additions to this rule.  Food and hospitality groups under NAICS code 72 with less than 500 employees per location may qualify as well as certain franchises listed in the Small Business Administration’s Franchise Directory.  If you are part of a larger company that has incorporated its individual locations, your individual location could potentially qualify, but your own legal group would need to address this question.  Newly added are also sole proprietors, independent contractors and the self-employed.

 

How will new sick leave and FMLA expansions impact my business as I get back to work?

 

Roughly 25% of workers are either a single parent or in a home where both parents work

(Bureau of Labor Statistics).  How does that impact a return to work?  If your company is resuming operations prior to communities lifting restrictions on daycares and childcare facilities, you could have a noticeable gap in who is able to return.  Depending on the responsibilities of these particular employees, the impacts could severely hamper your ability to get back to full operations.  New FMLA and sick leave guidelines now include caring for a child due to school or childcare closures as a result of COVID-19.  This could mean up to 12 weeks (2 for sick leave and 10 for FMLA) of paid leave for these employees.  While there are now tax credits in place to help cover the cost of these employees, there are no measures to cover temporarily replacing them.  Some companies are relying on high skill temporary labor suppliers like OpsOnsite to cover supervisory, managerial, and high skill (planning, quality, etc.) gaps until their employees can return to work.

 

What are my options?

 

It is important to understand your options to make an informed decision.

It is important not to make assumptions regarding how you will or won’t be impacted but to know.  There are links to resources included that can help you determine if you will qualify for the Paycheck Protection act or the multiple tax credits available to businesses.  You also need to have a plan in place for how extended leave due to childcare, health, or other issues will impact your return or continuance of operations.  Understanding these topics at a greater depth is going to help you in your decision making for the road ahead.

 

Helpful links:

(click below)

 

About Seraph: 

Seraph's team of operational managers and senior consultants intercede on our client's' behalf to fix a crisis that is putting the business at immediate risk, turnaround a situation that is damaging the bottom line or restructuring to improve the balance sheet. Seraph has successfully delivered projects in the following regions: The Americas, Europe, China, and India. Seraph's Industry Expertise Includes Aerospace, Automotive, Energy Infrastructure, Healthcare, and Medical Devices. Through our other operating companies, we are continually looking for distressed situations where we can put our expertise and capital to work to create value.

 

06 April 2020