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Loan Programs Employers Need to Know About During COVID-19

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Several loan programs are going to be available for employers and details are highlighted below and in the links to our website. This update includes information about three employer loan and relief programs, in order of priority:

  1. Payroll Protection Program
  2. Economic Injury Disaster Loan (EIDL)
  3. Payroll Retention Credit

The big item is the Payroll Protection Program, which is probably the most immediate of the items.

Call your bank now and tell them you intend to apply. Time is of the essence here as the initial money will run out, although it is quite possible Phase IV of the Congressional COVID-19 response will expand the funding beyond $350 billion.

These loans will be administered by SBA-recognized banks and possibly include other non-SBA banks. It is a Section 7(a) SBA program. Our feedback from bankers is that it might be two or more weeks before the process can get going, but some anticipate forms for applications to be produced in the next day or two.

  1. You will need to do some calculations. The maximum loan is $10 million or 2.5 times your monthly payroll and some other costs.
    1. Several calculations might be required but, basically, determine your average monthly payroll for the 12 months preceding the date in which the loan is made.
    2. That means you calculate the payroll costs from the prior year
    3. Payroll costs can include health insurance and some retirement plan contributions. Independent contractors you pay would also qualify.
  2. The loans will not need to be personally guaranteed and will not require collateral.
  3. There are several things you can pull together now.
    1. Average monthly payroll.
    2. Number of Full-Time Equivalents during that same period.
    3. Estimate the percentage of your normal operations functioning now.
    4. Some idea of how much you might be requesting
    5. Financial statements as recent as you might have.
    6. Links or copies of your latest filed tax returns.
    7. Payroll Tax Returns for the last several quarters.
    8. Forms 1099 MISC for independent contractors you may be claiming as included in the loan amount calculations.
  4. Don’t forget about the required certification that your business needs this money because of the current health crisis and the uncertainty that puts on the business’s ability to pay its employees and continue to function normally.
  5. Some or all of the loan amount will be forgiven, depending on how you spend that loan. these include 8 weeks of payroll immediately following the loan closure but employee retention is critical.
    1. A long list of expenditures exists that, when documented, will permit the business that loan forgiveness.

The second thing to prepare for is the EIDL, which stands for Economic Injury Disaster Loan.

  1. Provisions exist for an EIDL Grant of $10,000, which is a request for an emergency advance if you are applying for an EIDL loan. Some notes to consider:
    1. You must be an eligible entity.
    2. If used for expenses like payroll, rent, supply chain costs, and certain other expenses, the payback is not necessary.
    3. Any PPP loan would be reduced by this advance.
  2. The EIDL loans may be granted up to $2 million.
  3. They are more difficult to get and may take longer.
  4. The amounts advanced are likely to be recourse and backed up by personal guarantees of each of any 20% owners.
  5. These loans will be collateralized.
  6. In addition to the items necessary for applying for this loan:
    1. Itemize your liabilities (they can be grouped for now).
    2. Prepare yourself to submit personal financial statement details. You might refer to your latest bank form for your most recent loan and update it.
    3. Include your monthly sales report.
    4. Prepare some projection of what you expected in revenue and expenses. Do one for before the health crisis and one after. This is not required but might smooth the acceptance process.
    5. There will be forms and other items to fill out and sign. We or your advisors can help guide you on this.

The Payroll Retention Credit is also available, but it is the third thing to consider now.

This benefit is available where you can document operation suspension or severe reduction.

  1. It is a refundable credit against your employment taxes and is refundable.
  2. It cannot be claimed if you have a forgivable SBA loan. The forgivable loan probably works better.
  3. We recommend that you focus on this after you prepare for items 1 (PPP) and 2 (EIDL).

Need assistance to start applying for these loan programs? Contact CorpStrat today and we’ll walk you through the process.

Good Benefits and Pay Aren’t Enough to Keep Your Employees

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Is workplace culture important?

  • 90% of employees say “yes”
  • 79% of employers say “yes”

What is workplace culture?

Most organizations don’t really understand that culture in the workplace represents the deeper values and beliefs of the company. It’s not the stuff on the surface. It’s not the ping pong table, it’s not the margarita party, it’s not the cool benefits employees get. It’s really what is valued and how we behave and treat each other behind closed doors.

What we see most organizations doing is thinking about culture at the perk level. But, it’s really trying to get to the meaningful level of work, and it has a lot to do with how people are treated.

What kind of culture should employers strive for?

The kind where employees know that employers care about them. Organizations have to think about their intention around their culture. What we see is most organizations don’t even know what their own culture is. Employers may say on their website that they want to have a certain kind of culture, but employees may be laughing about that behind closed doors because they know the organization is nowhere close to achieving that idea.

What mistakes do employers make when it comes to workplace culture?

The most important thing to start with is the company understanding what they are aspiring to from a cultural perspective. They need to do the work around figuring out how they need to treat each other within the organization. What do managers need to do? What do leaders need to do? They need to articulate to everybody, so they are 100% clear on the standards and expectations. Most organizations completely skip that step and go right to putting a couple of cute things on their website.

Instead, make it really simple and say, “These are the standards and expectations we have for how we are with each other.” If you want your business to be successful, this is how you connect everybody’s individual behavior to the success of the business.

What specific tactics can employers take to improve workplace culture while also considering their benefit programs?

Be intentional. Think about being an architect of how people are with each other, within the organization.

If organizations had a culture department that had as much funding as a benefits department, where might we be? It’s almost odd that there are organizations that are focused on pet insurance, but they are not focused on being intentional about their culture. People are attracted to an organization, but they stay because of how the organization makes them feel.

Reach out to CorpStrat to learn how we help companies with strategies to attract, reward, and retain their most important assets – their people.

How We Helped a Cannabis Start-Up Find Ease in Payroll and Become HR Compliant

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Our Client

7Points is a cannabis cultivating company in Woodlake, California. They seek to offer their customers a continuously unique and pleasurable experience with their product.

Their Challenge

7Points is a start-up looking to grow quickly and needed systems and processes that were smooth, compliant and reliable from the start. They turned to CorpStrat for their Payroll and HR needs and received just what they were looking for.

Recommendation + Results

Instead of paper timesheets, 7Points employees are now using biometric timeclocks that sync directly into payroll. They are now able to avoid any timekeeping discrepancies and have saved endless time now that their hours are no longer manually entered.

In addition, 7Points turned to CorpStrat HR to make sure they were in compliance with all their HR-related needs. The first item on the agenda was the NEW California State required Sexual Harassment Training for all employees. 7Points can now have confidence in their policies and procedures when it comes to employees who are consistently compliant with State and Federal laws.

Cannabis-related companies have traditionally had a difficult time establishing banking and payroll practices. Contact the team at CorpStrat to help your company deploy best practices in benefits, compliance, learning, HR and technology.

How We Helped ProActive Streamline Their Process

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Our Client

Located in Los Angeles California, ProActive Work Health Services is a leader in the healthcare industry. ProActive, providing the full continuum of services, ensure their clients’ employees have immediate access to all levels of care under one umbrella – a convenient, cost-effective approach. From treatment of simple lacerations to complex back injuries, employees receive specialized care for their work-related injuries, with control of all treatment and follow-up.

Their Challenge

ProActive has been in ultimate growth mode! Opening more than 3 new locations in the last year, they needed a system that would streamline their efforts. Not only do their 150+ employees across their 10 locations still receive hard checks, but staying compliant with new labor laws and collecting reliable time and attendance records from their employees has proven to be a nightmare.

As they scale and double in size over the next year, they need to have a system that saves them time and helps them streamline their processes, rather than get in the way of their day to day business.

Recommendation

CorpStrat recommended their branded “21st Century Payroll and HR Solution” which includes dedicated advisors for ProActive. This system will not only help streamline their payroll and onboarding processes but will also provide an outlet for their ongoing compliance inquiries.

Results

CorpStrat’s fully integrated 21st Century Payroll and HR solution helped save ProActive hours every pay period when it comes to capturing pay and employee data. Rather than hand-delivering each employee a hard check, employees who choose to receive direct deposit are now able to receive their paychecks quicker and more reliably. Employees can review relevant PTO data on their employee portal, and send time-off requests with ease.

Additionally, ProActive now has the peace of mind that they are limiting their HR liability as they scale.

“Thank you so much for making this happen! CorpStrat has literally cut my time issuing payroll in half. I wish I moved over sooner. Your team has been great!”

– Michelle Alcarez, Director of HR

 

To learn more about CorpStrat’s 21’st Century HR Solution and how it can benefit your business, contact their offices at (818) 377-7260.

 

Wage and Hour Mistakes Can Cost You Plenty

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Wage and hour payroll mistakes can cost you PLENTY – here are best practices for payroll 2019.

Payroll processing is a core function for organizations to be able to compensate their employees for the work they are doing. A payroll system also holds a massive amount of sensitive employee information. If best practices to secure payroll processing are not properly implemented, sensitive information is left vulnerable, which can put both the employee population and the employer at serious risk of fraud, embezzlement and a host of legal issues potentially resulting in millions of dollars in damages.

To prevent that outcome from happening to your organization, you can use these strategies to help keep your payroll processing secure from inside and outside threats of fraud.

Keep Your Payroll Software Up To Date  

For those organizations who use automated software to run their payroll processing, the number one thing they need to do is make sure the software is up-to-date.

This ensures that their payroll processing has all the latest deployed codes and firewalls to help prevent from devious intent from online thieves outside the organization.

Businesses should be working diligently with their I.T. department to keep up-to-date on the best security practices.

Provide Common Sense Online Security Protocol For Employees

Failure to secure payroll processing can often be attributed to human error. Employees who practice bad online security practices put themselves and their organization at risk to the following hazards:

  • Phishing schemes
  • Malware
  • Trojan horses
  • Spam
  • Ransomware
  • Spyware
  • Viruses and more

Human resources, I.T. and leadership need to make some decisions on what strategies and company initiatives they perform to help keep payroll processing secure from fraud by putting data security at the forefront of their operations.

Restrict Payroll Access Diligently

Simply allow access to payroll and the sensitive information it holds to the select one or few employees whose job it is to run processing for the organization. You’re going to have stakeholders in different departments who may need access to data in payroll, however, everyone needs to be accounted for in this process.

Organizations need to keep an updated list that specifies who has access to payroll. This will allow them to immediately check back on their list easily in the event some payroll shenanigans are afoot in the company.

Be Wary of Third Parties

It’s normal for internal people or departments to need specific information from the payroll department at various times. However, businesses are always being spammed by 3rd party companies looking to acquire the data they hold.

In the event, your organization is considering sharing payroll processing data with a 3rd party, it’s important that businesses consult with their state labor department for clarification on work-related information releases. These businesses should also create a documented procedure that forces whoever wants data from payroll to sign and acknowledge it for auditing purposes later.

Disposal of Older Documentation

Businesses need to keep their legal documentation cleaned up and disposed of properly. Even if the information is old, it can still lead a person with fraud on their mind to other places that can harm employees and employer interests.

Organizations should be auditing their sensitive payroll documentation held online, or hard copy in the office for older and unneeded materials. By cleaning out the older, sensitive data in their filing systems, businesses will not have to worry about it getting into the wrong hands. They will also have less to sift through when it comes to tax season or other auditing duties.

Secure Your Payroll Area(s)

Whether the department is on-premise or located on another campus, organizations should be doing the following to their physical space to secure payroll processing:

  • Desks should be positioned so computer screens are not facing any windows or doors
  • All physical documentation should be locked up at all times when not being used
  • The doors to payroll should always be locked with access only allowed to assigned personnel

CorpStrat offers companies like yours full-service HR and Payroll services. Get in touch with us today to learn more!

It’s Time to Do a Payroll Check-up!

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June is IRS Payroll Check-up Month

They say taxes and death are the only certainties in life. While you can’t time the latter, you can time taxes, and doing a payroll check-up is a great way to make sure you don’t have any surprises.

If you are an employer, June is IRS check-up month, a great time to provide tools and help your employees be sure they are on track. By checking their withholding, taxpayers can make sure enough is being taken out of their paychecks or other income to cover the tax owed.

Everyone Should Check Withholdings

The IRS recommends that everyone do a Paycheck Checkup early in 2019. Though especially important for anyone with a 2018 tax bill, it’s also important for anyone whose refund is larger or smaller than expected. By changing withholding now, taxpayers can get the refund they want next year. For those who owe, boosting tax withholding early in 2019 is the best way to head off a tax bill a year from now. In addition, taxpayers should always check their withholding when a major life event occurs or when their income changes.

Doing a Paycheck Checkup now using the IRS Withholding Calculator means taxpayers have the majority of the year to spread out any changes they make to their withholding.

The agency said the average tax refund was $2,729 for the tax year, 2018. While some taxpayers may find it advantageous to get a large tax refund, others may wish to have more of their money in their paychecks throughout the year.

Whatever the goal, the IRS wants taxpayers to know that while taxes must be paid as income is earned during the year, either through withholding or estimated tax payments, they can make adjustments that will influence the size of their refund.

Doing an annual #PaycheckCheckup is a good idea for everyone –  it’s designed for people who receive wages, but the #IRS Withholding Calculator can help recipients of pension and annuity income, too. www.irs.gov/withholding