Author Archives: CorpStrat News

PPP Reform Bill Features Extended Forgiveness & Updated Guidelines

Leave a reply

(UPDATE as of July 4th 2020: On Saturday, July 4th, President Trump signed an extension of the small business loan Paycheck Protection Program (PPP) into law, according to the White House. PPP will now remain open to applications through August 8th.)

Many business owners who have received their PPP loan are struggling to ensure all their spending falls within the right parameters in order to receive forgiveness. Last week we broke down those strict guidelines and answered some of your most pressing questions. This week, we have some great news for business owners: the Paycheck Protection Program reform bill was signed into law. This means small business owners will gain more flexibility and time to use their PPP loan money. Read on for all the notable changes you need to know about the PPP reform bill and what it means for your loan forgiveness. 

Forgiveness Period Has Been Extended

Originally, the PPP loan allowed for 8 weeks to use the allocated funds in order to receive forgiveness, this is now being extended to 24 weeks OR until the end of the year (12/31/2020), whichever is sooner.

New borrowers now have five years to repay the loan instead of two. Existing PPP loans can be extended up to 5 years if the lender and borrower agree. The interest rate will remain at 1%. The bill allows businesses that took a PPP loan to also delay payment of their payroll taxes, which was prohibited under the CARES Act.

Payroll Cost Requirement Has Been Reduced

The previous requirement of using 75% of the PPP loan towards payroll costs has now been reduced to 60%. This means that if you received a $100,000 loan, you now only have to use $60,000 towards payroll costs, freeing up more funds to allocate towards eligible non-payroll costs such as rent and utility payments.

One important note: Previously, payroll cost forgiveness was based on a sliding scale, it is now a cliff. Before, if you spent less than 75% of your loan on payroll costs, it would just reduce your eligible forgiveness amount. Now, if you spend less than 60% of your loan on payroll costs, none of the loan will be forgiven.

More Time to Restore Workforce

Once small business owners received the PPP loan, they had to use it to restore 90% of their workforce. This means that if you had 10 Full-time Equivalents (FTE), you had to hire back 9 of your employees back. Under the this reform bill, employers now have until the end of the year (12/31/2020) to restore their workforce to pre-pandemic levels.

Previous guidance excused employers from bringing back workers if they can document that they were unable to rehire. For example, if an employer extended a good faith offer to a previous employee and that employee rejected the offer to return, the employer could provide documentation that this exchange occurred and be excused from bringing back the worker. The exemptions under the new bill allow borrowers to adjust if they 1.) could not find qualified employees or 2.) were unable to restore business operations to pre-pandemic levels (employment levels before Feb. 15, 2020) due to COVID-19 related operating restrictions.

Share on social!

Our shareable graphic rounds-up all the notable changes to the PPP Loan. Feel free to share and tag us on Facebook, LinkedIn and Twitter.

—

We’ll keep you posted as more updates arise. If you have any additional questions, please email us at marketing@www.corpstrat.com.

Confused About Your PPP Loan? We’ve Got Answers For You

Leave a reply

(UPDATE as of July 4th 2020: On Saturday, July 4th, President Trump signed an extension of the small business loan Paycheck Protection Program (PPP) into law, according to the White House. PPP will now remain open to applications through August 8th.)

Update: As of June 4th, 2020, the House-passed Payment Protection Program reform bill was approved by the Senate. The PPP Loan forgiveness parameters have changed, please see all updates at our new blog post.

So you just received your PPP loan and you still have a lot of questions. You’re not alone. It’s a new program and the Small Business Administration (SBA) is still releasing new guidelines. The most pressing question we’re hearing from employers who’ve received the loan is: How do I receive forgiveness on my PPP loan? Read on as we answer this and more FAQs you have about PPP loans. 

What is the PPP Loan? 

The Coronavirus Aid, Relief, and Economic Security Act, or CARES Act, was enacted to provide immediate assistance to individuals, families, and businesses affected by the COVID-19 emergency. Under the CARES act, the SBA was able to temporarily guarantee loans under a new program called the “Payment Protection Program” (PPP). PPP loans are designed to help small businesses, independent contractors and self-employed persons keep their workforce employed during the economic hardship many are experiencing due to COVID-19. Loans guaranteed under the PPP loan will be 100 percent guaranteed by SBA, and the full principal amount of the loans may qualify for loan forgiveness. 

What expenses are forgivable with my PPP loan?

In order to receive PPP loan forgiveness, you need to use the loan for eligible expenses. It is required that at least 75% of your PPP loan is used to cover payroll costs. The remaining 25% can go towards specified non-payroll costs that are essential to running a business. (Updated forgiveness parameters as of June 4th, 2020. See our new blog post.)

Speaking of forgiveness, is the PPP loan all or nothing?

No. Whatever portion is not forgiven can be retained and repaid over a 24 month period at just 1% interest. (Updated forgiveness parameters as of June 4th, 2020. See our new blog post.)

If I laid off employees – do I have to hire them back?

No. But, the loan forgiveness amount will be reduced if the business has reduced its number of full-time equivalent (FTE) employees or has reduced the salary or wages of certain employees based on the following formulas:

Formula for reduction in FTE employees:

What percentage of the loan has to be used towards payroll?

Not more than 25 percent of the loan forgiveness amount can be used towards non-payroll costs (i.e.,mortgage interest, rent and utilities). Additionally, proceeds from any advance up to $10,000 on an Economic Injury Disaster Loan (EIDL) will be deducted from the loan forgiveness amount. (Updated forgiveness parameters as of June 4th, 2020. See our new blog post.)

When does my eight-week period start?

The covered period begins on the date the lender makes the first disbursement of the loan, this means it begins the first day a loan payment is sent out. 

After 8 weeks I can’t afford to keep my employees – what do I do?

Once the 8 weeks is up, continue running your business as you would otherwise do so. Even though it’s a difficult step, moving forward with furloughing or termination if necessary will allow your employees to sign up for state and federal resources. Note that any change in employment status requires paying out any PTO or unused leave. (Updated forgiveness parameters as of June 4th, 2020. See our new blog post.)

—-

We understand that these are confusing and uncertain times. That’s why we’re always here to help, contact your CorpStrat rep with questions, anytime! Call us toll free at (800) 914-3564 or email us at info@www.corpstrat.com.

Your Company Employee Benefits – Will you need a reset?

Leave a reply

Shaking hands after job offerWill we return to business as usual post-COVID-19? Sadly, not as quickly as we’d like. Some businesses will resume however, many may never recover. Companies will be focused on revenue generation, resuming some business operations, and restructuring workforce and office environments. One area companies should focus on, that may be key to recovery, is their employee benefits programs. 

Just two months ago, companies had to compete for talent by offering robust packages and supporting programs to attract talent and retain staff. Now that a large number of Americans are unemployed, companies will have their pick of talent, a phenomenon we have not seen in years. In the coming months, companies will be feeling the pressure to offer a competitive benefits package while struggling to put back the pieces of their business. Here are some simple, low-cost ways to ensure your employee benefits package is appealing in the new normal. 

1. Ensure you are COBRA compliant

Every employee who has lost coverage is entitled to COBRA continuation rights. The question of “who” makes the offer is a function of your group size and state. If your firm has 20 or more employees, it is your responsibility to comply, as penalties for non-compliance are steep. Keep in mind it is not just a termination issue! Work with your broker to make sure you are completing all the necessary parts of the COBRA compliance.

2. Review current offerings and contribution formulas

As previously mentioned, companies were ferociously competing for talent pre-COVID. Benchmarking benefits were critical and expanding offerings was essential. Looking forward, you need to review what you offer, why you offer it, how you offer it, and what the market demands for retention and attraction. Companies will scale coverages back, look to change contributions for employees, and seek ways to manage their benefits budgets. What’s right for your company may be different from others – given geography and demographics. Note that COVID hasn’t helped the pricing of benefit plans. Expect to see increased costs for healthcare in the years ahead. 

3. Explore voluntary benefits

These are the hidden gems of benefits—plans that can be purchased by employees, and many times pre-taxed. It’s not only Aflac, but a host of offerings from life insurance, sickness, critical illnesses, and even pet insurance. These plans can add up and the premiums can have a collective reduction in payroll costs for workers’ compensation and payroll taxes.

4. Expand pre-tax offerings for premiums and healthcare expenses

This includes health reimbursement accounts, dependent care expense accounts, and review of health savings accounts. Each of these can help employees use pre-tax dollars to pay for items they are likely to pay for and saves taxes for all. (FYI – for post-COVID, the FSA has been expanded to allow for over-the-counter health care expenses).

5. Deploy an HR system that integrates payroll, time, attendance, and benefits

Companies have quickly figured out that having a system that can integrate payroll, time, attendance, communication, GPS tracking, and benefits enrollment is an essential tool for companies—big and small. With that in mind, a fully-integrated Human Resource Information System (HRIS) is a powerful tool to be equipped with. Without one, companies won’t thrive.

–

Want an experienced professional to help you map out your benefit package strategy? Get in touch with CorpStrat today.

Learning with CorpStrat: Free Courses for Clients

Leave a reply

Black Woman Working From Home With Laptop Computer

We understand there are many businesses struggling during this very challenging time.

With most people working remotely now, it is easy for employees to feel disconnected from the rest of their team, having to manage stress and learn to adapt each day. While we have also been adjusting to remote work, some have also been juggling their other jobs as parents, teachers, & employees.

As part of our 21st Century HR Solution that uses technology to simplify and streamline HR procedures, we are offering CorpStrat Learning: a platform for employees to come together to connect and collaborate, which allows companies to assign, track, and educate their staff and managers on a host of subjects.

Our CorpStrat Learning tool is for clients to empower employees during these times when everything can start to feel rather bleak.

Here are the 5 courses we have identified as the most purposeful and helpful during this time:

  1. Coronavirus Preparedness for Managers and Employees
    This course informs managers and employees of simple steps they can take to stay healthy and prevent the spread of Coronavirus (COVID-19). (Recommended for: Managers and Employees)
  2. Crisis Management and Emergency Response Planning
    This course teaches managers how to safeguard their employees and the reputation of their organization with advance planning and swift, effective actions during a crisis or emergency situation. (Recommended for: Managers)
  3. Handling Stress
    In this course, managers and their team will learn effective techniques to learn how to best manage their stress levels, allowing them to not only improve their overall sense of well-being but also to work more productively. (Recommended for: Managers and Staff)
  4. Working Remotely
    Whether your business has always been remote, or this is the new normal for you given the circumstances around COVID-19, our “Working Remotely” course offers managers and their team strategies on how to be an effective, remote employee. (Recommended for: Managers and Staff)
  5. Managing Remote Teams
    As we touched on earlier when it comes to working remotely, feeling connected and touching base frequently is important to keep your team productive and engaged. Not to be confused with our “Working Remotely” course, this course focuses on providing managers guidance on how to strengthen their team’s synergy during times of remote work. (Recommended for: Managers)

We know times are tough, so CorpStrat is proud to offer this platform for FREE to our existing agency clients. Contact us now to enroll and roll out these courses.

P.S. (If you have more “downtime” and want to get ahead of the compliance curve, CorpStrat also offers a full set of California compliance training courses. As a reminder, it is required by California law that employers of 5 or more employees are required to provide Sexual Harassment Prevention Training. Although the current stay-at-home order may give us all a sense of comfort with this issue, it is important to ensure this is completed before January 1, 2021.)

Ready to feel empowered to tackle working remotely?
Email us at Learning@CorpStrat.com to get started.

 

The Value of an HR System Amidst COVID-19

Leave a reply

Man video conference with team

With Los Angeles County extending the “Safer At Home” emergency order through May 15, 2020, employers and their employees have had no other option but to adjust and get comfortable working from home. Even furloughed employees need a way of interacting with the basic processes of HR.

While human resource teams are dealing with the changes in the workforce the last thing they need to worry about is how to properly relay all new information to their employees now that everyone is out of office. With that in mind, an HR system is critical to help keep businesses running smoothly and efficiently during these remote, unprecedented times.

Here are some ways employers with a robust process can make the best use of their HR system during COVID-19.

Ensure Contact Information is Current

With the news around Coronavirus changing day by day, it’s important to make sure your system contains all employees’ most current contact information should you have to make any company announcements. It is also good to have on hand now that everyone is working remotely and it can be harder to get an immediate response from an employee since you cannot physically stop by their desk to grab their attention.

Keep Employees Updated on Policy Changes

If there are any important policy changes and/or relevant COVID-19 news for your employees, it should be added accordingly to your HR system. Make sure your employees also know how to access this information themselves so they can easily locate any important documents they may need regarding taxes or pay statements.

Help to Keep Your Team Accountable and Engaged

Social distancing by working remotely can be an adjustment period for some, especially companies who are more “old school” and thrive on in-person connections. As employees are working from their homes, it can be harder to check-in with each other throughout the day as well as figuring out logistics that one may not have had to consider pre-Coronavirus. Utilizing an HR management system can alleviate these frustrations through various collaboration features to help rally your team to work on projects together and feel a little more “normal” even if it’s temporary.

Learning and Training

Seek and push out any and all ways that can help your team stay mentally fresh and positive. There are many companies offering training, continuing education, and advanced learning. Now is a great time for people to work on getting their credentials, enrolling in secondary learning classes, or completing state or federal required training.

How CorpStrat Can Help

With these challenges during COVID-19, employers have enough to worry about. CorpStrat’s cloud-based HR Management System will take the HR stress off your plate and transform your workplace administration. By being properly equipped with our streamlined process for HR management, this will help you overcome your COVID-19 HR obstacles by easily tracking your company’s HR needs including payroll, benefits, time off, and employee data – all through one tool.