Industry

Print
Maximizing PPP Forgiveness: How to COVID-Proof Your Business

8 Jun, 2020


Recently the House passed the Paycheck Protection Program Flexibility Act by 417-1, with the aim of easing strain on small business owners who are being crushed by the coronavirus pandemic and work stoppage.
 
“The House made important modifications to PPP which really lightened the burden on small businesses,” says Rob Wilson, President of Employco USA and an employment trends expert. “They reduced the percentage of the loan which must be spent on payroll down to 60%, which ensures that employers can spend the funds on other necessary business expenses.”
 
Still, Wilson says this won’t be enough for many businesses.
 
“Many of my clients are very concerned about how they can safeguard their companies during this global disaster,” says Wilson. “Over 100,000 small businesses have already closed as a direct result of this pandemic. And I fear many more companies will follow suit.”
 
To that end, the human resources expert suggests the following tips for helping employers to make the most of PPP forgiveness:
 
  • Don’t forget to include employer-paid benefit amounts in the payroll costs, including group medical, dental, vision, FSA and 401(k) plans. “You can use PPP not just for wages, but for many benefits you are paying to your employees. There are some exceptions, such as life insurance, but overall, most companies will find great relief here.”
  • Adjust your payroll schedule (temporarily) to fit within the 8-week window. “Consider paying your employees on a more frequent basis to better work your payroll into the loan timeframe.”
  • Keep track of hours worked for each employee – the forgiveness is based on FT and FTE counts (based on a 40-hour work week). “Make sure you’re having all of your employees fill out time sheets and that you have meticulous records for your work-at-home staff,” says Wilson.
  • Pay a bonus or increase compensation for employees if you’re tracking too low near the end of the 8 weeks. “This is a win-win,” says Wilson. “You can thank your workers for all the extra stress and fear of working during a pandemic, while also ensuring you meet the requirements of your loan.”
Print