Helping Your Business Navigate as Your State Re-Opens and Employees Return to Work
The coronavirus pandemic changed how to conduct business and what workplaces will be like for employees. As states re-open, there will be a learning curve to the new normal. Paychex developed this high-level summary to provide information to help you navigate the challenges.
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Helping Your Business Navigate
as Your State
Re-Opens and Employees Return
to Work
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Your Finances
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Note: As of July 1, the SBA is no longer accepting applications for Paycheck Protection Program loans. Explore this resource to learn about PPP loan forgiveness.
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PPP Loan Forgiveness
The Act extends the covered period to the earlier of 24 weeks from origination date of the loan, or until Dec. 31, 2020. Borrowers who received a PPP loan before the enactment of the Act may elect to use the original covered period, which was eight weeks after the origination of the loan.
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Repayment for Unforgiven Loans
Employee Retention Credit
Provides for a refundable credit against employer payroll taxes for employers who complied with government order to partially or fully suspend operations or who recognized significant reduction in gross receipts, but who retained their employees. Read about the CARES Act
• Take a refundable credit of 50% of
qualified wages/health plan expenses
up to $10,000 per employee against
applicable employment taxes
Eligible Employers Can:
Exclusions:
• Employer cannot receive the Employee
Retention Credit if they receive a Paycheck
Protection Program Loan from the SBA
• This credit cannot be taken on any wages
previously accounted for in a WOTC or
Emergency Paid Sick Leave Credit
Payroll Tax Deferral Period
Employer can defer payment of applicable employer payroll taxes (employer portion of Social Security) incurred from March 27, 2020, to Dec. 31, 2020.
Details to note:
• Deferred repayment would be split and paid as
follows: 50% due December 31, 2021; 50% due
December 31, 2022.
• Employers can now defer payment of the employer share of Social Security taxes even after PPP loans
are forgiven.
Other Funding Options
After consulting with your accountant, you might determine there are better courses of action to obtain financing for your business. There are other options that might suit your business and industry needs.
• Term loans (short- and long-term)
• SBA loans
• Main Street Lending Program Options
• Business Lines of Credit
• Merchant Cash Advances, and More
Read this article from our WORX library that offers more details on these options.
State Unemployment Insurance Tax Credit
Some states have enacted legislation that provides employers with a SUI tax credit if they paid their first quarter SUI contributions on or before a specific date. The amount of the credit equals the amount of the first-quarter 2020 contributions paid by the employer, and is applicable to the second quarter 2020 SUI contributions.
Check with your state to see whether you can take advantage of this credit.
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• The Employee Retention Credit
Consult with your CPA to determine what program is right
for your business.
The PPP Flexibility Act establishes:
It's important to note that a PPP loan cannot be combined with:
• A minimum loan maturity period of five
years following an application for loan
forgiveness
FTE Reduction Exemption
Loan forgiveness amount will be determined without regard to a proportional reduction in the number of full-time equivalents employees if the borrower can document an inability to re-hire employees, fill open positions with qualified candidates, or return to same level of business activity due to compliance requirements set by OSHA, CDC, and others from March 1, 2020 to Dec. 31, 2020 for sanitation, social distancing,
and safety requirements related to COVID-19
Paycheck Protection Program Flexibility Act
The Act, which was signed into law June 5, 2020, made some significant changes to the PPP loan and loan forgiveness process.
The Act extends the covered period to the earlier of 24 weeks from origination date of the loan, or until Dec. 31, 2020. Borrowers who received a PPP loan before the enactment of the Act may elect to use the original covered period, which was eight weeks after the origination of the loan.
• Loan amounts used to pay payroll (60%)
or non-payroll costs such as mortgage
interest or rent, and utilities (40%) –
provided service began before Feb. 15,
2020 – could be forgiven in full.
• Forgiveness will be reduced proportionally
by any reduction in employees retained
compared to the prior year, in general, and
reduction in wages of eligible employees
by more than 25% of prior year compensation. Learn about potential exmption.
• Borrowers are required to show
documentation on expenses/employees
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Paycheck Protection Program Flexibility Act
The Act, which was signed into law June 5, 2020, made some significant changes to the PPP loan and loan forgiveness process.
• Extends covered period to 24 weeks.
• Amends 75/25 rule to 60/40. Borrowers can now use up to 60%
of their loan amount on non-payroll costs
• Extends exemption for re-hires to Dec. 31, 2020
• Extends term for any loan remaining after applying for
forgiveness to a minimum of five (5) years to borrowers
who obtained loan after passage of law.
• Establishes FTE Reduction Exemption
• Extends the deferral of payment Social Security taxes
• Borrowers now can defer payments of loan principal and
interest on unforgiven loan amounts until the date on which the forgiveness amount is remitted to the lender
• Borrowers will be required to begin payments on loan and interest if loan forgiveness has not been applied for within
10 months of the end of its covered period
PPP Loan Forgiveness
The Act extends the covered period to the earlier of 24 weeks from origination date of the loan, or until Dec. 31, 2020. Borrowers who received a PPP loan before the enactment of the Act may elect to use the original covered period, which was eight weeks after the origination of the loan. More Details.
Loan forgiveness for the first eight weeks under certain conditions (not all listed):
• Loan amounts used on covered payroll (at least 60%) or non-payroll costs such as mortgage interest or rent, and utilities (up to 40%) – provided service began before
Feb. 15, 2020 – can be forgiven in full.
• Forgiveness will be reduced proportionally by any
reduction in FTE employees retained compared to a look-
back period and reduction in wages of eligible employees
by more than 25% during the covered period when
compared to the 1st Quarter 2020. Fulling restoring
employees and/or wages by Dec. 31, 2020 may qualify
the borrower for FTE or Wage reduction safe harbors.
Forgiveness will also be reduced if a borrower uses less
than 60% of the loan amount on payroll costs.
Learn about potential exemption and exceptions.
• Borrowers are required to show
documentation on expenses/employees
FTE Reduction Exemption
Loan forgiveness amount will be determined without regard to a proportional reduction in the number of full-time equivalents employees if the borrower can document certain inability to re-hire employees, fill open positions with qualified candidates, or return to same level of business activity due to compliance requirements set by OSHA, CDC, and others from March 1, 2020, to Dec. 31, 2020 for sanitation, social distancing, and safety requirements related to COVID-19.
FTE Reduction Exceptions
Your forgiveness amount will not be reduced if you laid-off or reduced the hours of an employee, then offered to rehire the same employee for the same salary and same number of hours, or restore the reduction in hours, but the employee declined the offer or if an employee of the borrower is fired for cause, voluntarily resigns, or voluntarily requests a reduced schedule during your chosen covered period.
The Original 8-Week Covered Period
Begins either (1) the day you received the loan (the standard covered period); or (2) the first day of the first pay period after you received the loan (alternative covered period). Only bi-weekly or weekly payroll frequencies can use the alternative covered period.
Repayment for Unforgiven Loans
The PPP Flexibility Act establishes:
It's important to note that a PPP loan cannot be combined with:
Consult with your CPA to determine what program is right
for your business.
• A minimum loan maturity period of five
years for PPP loans issued after the effective
date of the Act, although borrowers and lenders
could agree to extend current loans originally set
by SBA that were for two years.
• The Employee Retention Credit
Payroll Tax Deferral Period
Employer can defer payment of applicable employer payroll taxes (employer portion of Social Security) incurred from March 27, 2020, to Dec. 31, 2020.
Details to note:
• Deferred repayment would be split and paid as
follows: 50% due December 31, 2021; 50% due
December 31, 2022.
• Employers can now defer or continue to defer
payment of the employer share of Social Security
taxes even after PPP loans are forgiven.
FTE Reduction Exemption.
Loan forgiveness amount will be determined without regard to a proportional reduction in the number of full-time equivalents employees if the borrower can document an inability to
re-hire employees, fill open positions with qualified candidates, or return to same level of business activity due to compliance requirements set by OSHA, CDC, and others from March 1, 2020 to Dec. 31, 2020 for sanitation, social distancing, and safety requirements related to COVID-19.
FTE Reduction Exemption.
Loan forgiveness amount will be determined without regard to a proportional reduction in the number of full-time equivalents employees if the borrower can document an inability to
re-hire employees, fill open positions with qualified candidates, or return to same level of business activity due to compliance requirements set by OSHA, CDC, and others from March 1, 2020 to Dec. 31, 2020 for sanitation, social distancing, and safety requirements related to COVID-19.
Payroll Protection
Payroll Protection: We provide you the flexibility to extend the collection of payroll funds from your bank account by up to seven days without interruption of services or insufficient fund charges.
Business Credit Service: We’ll send payment history to credit bureaus with the goal of building your business credit file and improving your ability to secure attractive.
Learn more about the Paychex Promise
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Hiring and Re-Hiring
If you had to furlough or separate employees
from the payroll, a generally recommended best practice as your business re-opens is to make job offers in writing. This provides documentation for you and the employee, and if you received a PPP loan, then this documentation is critical as you apply for loan forgiveness.
Employee Safety
As your business re-opens, a key consideration is the safety and well-being of your employees. Consider the following to identify
and address COVID-19 in the workplace.
• Develop a safety and health plan
• Workplace hygiene
• Workplace disinfection
• Social distancing protocols
• Personal protective equipment
• Employee screenings
Check out our Workplace Safety and Health checklist for more details.
Employee Resources
• Paycards through Skylight® PayOptions™ eliminates need for an employee bank account.
• Pay-on-demand, powered by PayActiv, gives employees access to earned wages before payday.
• FinFit is a financial wellness tool that also offers short-term loans for emergencies.
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Check out our Payroll Options for more details.
Furloughing, hiring, and re-hiring could have implications to your business and employees
in regard to health care. Applicable Large Employers have reporting obligations under
the Affordable Care Act. Employees might need
to continue coverage under COBRA or individual health insurance. Learn about the considerations.
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COVID-19 Screening for Employers
As businesses reopen amid the COVID-19 pandemic, employers are looking for ways to keep employees and customers safe, while keeping in compliance with local and federal health mandates.
Through our relationship with HireRight, Paychex now offers COVID-19 antigen testing to our clients. To find out more about how the Employee COVID-19 Screening works, and to ask about pricing, please contact the Paychex Employee Screening Service team at 866-895-1357 option 1 or go to https://pages.paychex.com/covid-19-screening.html.
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State-by-State Resources
How is your state responding to the coronavirus pandemic? All have implemented partial re-opening orders to get the economy up and running.
You might need to know about amended paid leave laws – at the state and local level – not to mention how your state is handling collection processes such as tax levies or protecting employee health insurance coverage.
Paychex has curated state-specific information and other resources in one place.
VIEW STATE RESOURCES
VIEW STATE RESOURCES
Proven HR Support
Paychex provides businesses with ASO (Administrative Services Only) or PEO (Professional Employer Organization) options
to help businesses manage everything from administration of health benefits to ever-changing employment law regulations and employee relations issues. And, we do so with economy of scale. We have more than 500 HR consultants dedicated to individual businesses. Get started.
ONLINE RESOURCE CENTER
You also can take advantage of our self-service options – 24/7 support and service just a call, email, or chat away – so you can get the assistance you want when you need it.
CUSTOMER SUPPORT CENTER
ONLINE RESOURCE CENTER
CUSTOMER SUPPORT CENTER
Finding Efficiencies
Workers' Compensation
The COVID-19 pandemic has brought additional business needs to light; mainly, that with so much change facing businesses, this might be a good time to re-evaluate the protections you have in place for your business.
There is the potential for staffing issues and even the possibility of employees working remotely. You want to consider how to cover you, your company, and your people properly with the right insurance.
Cyber Liability
Umbrella Coverage
Commercial Property
A re-evaluation can save you money, help you be better prepared in the future, and provide peace of mind.
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• Develop a safety and health plan
• Workplace hygiene
• Workplace disinfection
• Social distancing protocols
• Personal protective equipment
• Employee screenings
Professional employer organization (PEO) services are sold and provided by Paychex Business Solutions, LLC (PBS) and its affiliates, which are registered and licensed to sell and provide PEO services, including in Florida. PBS FL license numbers are Paychex Business Solutions, LLC, GL7, PBS of Central Florida, LLC, GM14, PBS of America, LLC, GM46, Paychex PEO I, LLC, GM455, Paychex PEO II, LLC, GM456, Paychex PEO III, LLC, GL193, Paychex PEO IV, LLC, GM519 and Paychex PEO V, LLC, GM 522, Paychex PEO VI, LLC, GM627, Paychex PEO VII, LLC, GM628, Paychex PEO VIII, LLC, GL242, Paychex PEO IX, LLC, GM637, Paychex PEO X, LLC, GM636.
Insurance sold and serviced by Paychex Insurance Agency, Inc., 150 Sawgrass Drive, Rochester, NY 14620. CA License 0C28207.
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