Understanding Employment Issues With PPP Loans
Getting the PPP loan is one thing.
The next thing is getting qualified for forgiveness.
And in the process of seeking forgiveness a lot of employment issues may arise.
Michelle May Griffin of Griffin Resources joins host Our Shawn McBride for another edition of the Future Done Right(TM) Show to discuss these issues.
NOTE: Legal issues may be discussed but this is not legal advice. Consult your own counsel for advice before taking any actions.
Here’s a machine transcript of the session:
00:00:00.599 –> 00:00:09.210
The Our Shawn: Hey everyone, are Sean McBride with you. We want to take some time today we’re gonna be talking about TTP loans and particularly the HR side of it. So,
00:00:09.599 –> 00:00:18.510
The Our Shawn: I have Michelle Griffin joining us. We had a long conversation last week, putting together notes for you guys about kind of what we’re seeing with PvP one some of the
00:00:19.020 –> 00:00:27.060
The Our Shawn: Connected issues, because what’s going to happen is, with all the formulas requirements, things that are coming through the PPP system. Once you get the loan.
00:00:27.690 –> 00:00:40.170
The Our Shawn: You probably have decent HR management some planning on your end, or we get there. So, Michelle, I know you’re in this world you consult with a lot of folks much tell folks about you what you do and then we’ll jump into some questions and kind of things that we’re seeing.
00:00:40.830 –> 00:00:49.440
Michelle Griffin: Yeah, thank you. Thanks for having me. I’m so I am a CEO and owner of Griffin resources. And so I am an HR executive and consultant to
00:00:50.220 –> 00:01:05.460
Michelle Griffin: Multiple small businesses in the Tampa Bay Area and across different industries. So my clients have been impacted in different ways. And then I also just talk with other business owners and kind of make sure that I was
00:01:06.000 –> 00:01:24.480
Michelle Griffin: Networking and speaking with them about their questions and kind of what they’re seeing. So, so I have to work through this on my own small business and I have a handful of employees myself and then helping my clients are also small businesses. So I had to dive in this from both angles.
00:01:24.990 –> 00:01:33.540
The Our Shawn: Yeah. So the basic idea was pretty simple, right, the government wanted to keep people from getting on employee, particularly as businesses shut down and wanted to make sure that
00:01:34.080 –> 00:01:42.840
The Our Shawn: You know, people kept getting paychecks. I guess to avoid overburdening the unemployment system to keep some continuity economy, etc. But
00:01:43.680 –> 00:01:50.550
The Our Shawn: The way they dealt with this was they put a bunch of formulas in place and those formulas, get a little bit tricky and complicated
00:01:51.480 –> 00:02:00.030
The Our Shawn: As you start looking at them. So they’ve tried to spell it out and they do in some of the Treasury guidance and some of the stuff that will tell you about later, but
00:02:00.600 –> 00:02:07.380
The Our Shawn: At the same time, they don’t spell everything out and they don’t tell you some of the little nuances that you know just we’re kind of
00:02:07.800 –> 00:02:16.320
The Our Shawn: Part of rush legislation. So we’re going to work through it as always we’re not really giving you legal advice here that’s you know that’s not what this is.
00:02:16.950 –> 00:02:23.940
The Our Shawn: Consulting lawyers. We want to give you your ideas and kind of general stuff that you can work with to kind of get your point in the right direction. So,
00:02:25.470 –> 00:02:32.670
The Our Shawn: Michelle I think it starts with you know you guys spend this money on payroll right you guys payroll and headcount. Those are two big things in there.
00:02:34.410 –> 00:02:42.900
The Our Shawn: And everything’s tested, everything’s tied to largely an eight week testing period right so you get your loan dispersed whatever date that is
00:02:43.530 –> 00:02:45.690
The Our Shawn: Then you’ve got eight weeks to spend the money so
00:02:45.870 –> 00:02:50.640
The Our Shawn: That’s I think that’s the first trick for many employers right Michelle is you’ve got to
00:02:51.120 –> 00:02:58.530
Michelle Griffin: Yeah, the clock starts ticking the time that you get your disbursements so you have eight weeks from that date.
00:02:59.430 –> 00:03:09.750
Michelle Griffin: In order to make sure that you’re using those exact funds and amounts for your, your payroll and the improved uses of the funds.
00:03:10.740 –> 00:03:20.640
Michelle Griffin: For me, we were given our PPP loan last week and we start running payroll next week or this cup this upcoming week so
00:03:21.540 –> 00:03:34.530
Michelle Griffin: We had to much like many small businesses had to start making sure that our payroll periods that we have in that eight week period are going to align with the funds that we need in order to use it for that.
00:03:35.160 –> 00:03:46.200
Michelle Griffin: Yes, they don’t we had to start asking yourself what our options and what can we do about that. And I think some businesses are running into the fact if they had people
00:03:47.070 –> 00:03:57.660
Michelle Griffin: Not able to work during this time period, there were furloughed they’re not able to bring them back yet so their head count is different than when they were approved for the PPP loan.
00:03:58.110 –> 00:04:09.210
Michelle Griffin: So then how does that headcount different if they are lower than what they were then they’re not going to be able to use all of those funds or even the mandatory 75% of those funds for their overhead.
00:04:09.960 –> 00:04:23.340
Michelle Griffin: And then it’s. What else do you do and then also what is your timeframe to bring your people back and there’s you know formulas and timeframes, but that um so that’s kind of some things I think people are meeting to hear
00:04:23.640 –> 00:04:34.530
The Our Shawn: Me. Yeah, that could be a huge issue right is particularly for those that did furloughs or layoffs, um, you know, now you guys did a really back and you’ve got this eight week period to spend the money.
00:04:35.610 –> 00:04:43.710
The Our Shawn: Which if you have people who aren’t there and then you suddenly and alone comes in and it funds, you’ve got a hurry, get people on the phone and try to get them back to the office.
00:04:44.250 –> 00:04:50.850
The Our Shawn: Or figure out how to spend that 75% of your loan on payroll to get the you know that’s what you need to do to get a full forgiveness.
00:04:51.600 –> 00:04:55.170
The Our Shawn: And so you’ve got to have enough. You got to have enough outbound payroll.
00:04:55.680 –> 00:05:03.300
The Our Shawn: And then we talked about the timing issue, like you said, with your business. You’ve got to then look at your existing payroll periods and see how it lines up to eight weeks because
00:05:03.750 –> 00:05:11.670
The Our Shawn: For some people, you’ll have payroll dates that are outside of that, right. So if you’re mostly paying company or pay every two weeks.
00:05:12.180 –> 00:05:19.830
The Our Shawn: It was a very good likelihood that that last payment that you make to your employees will be outside the eight week period, depending on how the weeks later.
00:05:20.340 –> 00:05:40.680
Michelle Griffin: Right, so there you know and you and I had talked about if you run a special peril. I’m a you know a stub period where you’re paying the amount early and you know you’re you’re running special payrolls you’re running bonuses and, you know, making sure you’re covering over time or no additional
00:05:41.520 –> 00:05:41.880
Michelle Griffin: But
00:05:42.000 –> 00:05:52.830
Michelle Griffin: Could possibly be used where you’re still covered, you’re still paying headcount or at least for your overhead. Although might not be on the exact timeline of what should be your normal payroll runs
00:05:52.950 –> 00:06:01.440
The Our Shawn: That’s right. Yeah, and I think you’re gonna everyone’s got to kind of run a pre planning spreadsheet of what this looks like. And think about it and you may have to move payroll data up
00:06:02.430 –> 00:06:13.110
The Our Shawn: Yet bonuses are a possibility. You know, you’re going to have to figure out how if you’re going to get it out there to get it out there. And so, you know, some some employers have reduced pay. So if you reduce pay
00:06:13.650 –> 00:06:23.400
The Our Shawn: Coming into this period, they’re really looking at your past payment history to figure out what amount of payroll, you should have. So you may want you may have to increase pay back up.
00:06:23.970 –> 00:06:34.740
The Our Shawn: I wish to be awkward because you have a lower level of pain in your increase pay that are potentially going to lower pay where you may have to do bonuses or something else to get that 75% payroll out the door.
00:06:34.980 –> 00:06:47.700
Michelle Griffin: Yeah, and I’ve seen a lot of companies, reduce the salaries that employees were getting paid, either through this process or as they were getting processed or they were delaying bonuses until the PPP funded
00:06:48.690 –> 00:06:57.510
Michelle Griffin: So that’s also a possibility, people could read you know reinstate some of those salaries that they had beforehand and and also you know
00:06:58.020 –> 00:07:08.070
Michelle Griffin: Change the product, you know, the timing of some of those other payments as well. So that’s some of the other things I think we’ve seen is just changes in salary can also be reinstated using those funds.
00:07:08.820 –> 00:07:18.570
The Our Shawn: Yeah, so you gotta get you guys found at least 75% of your loan amount on payroll within that eight week period to qualify for the full forgiveness and then you’ve got
00:07:19.230 –> 00:07:31.170
The Our Shawn: Up to another 25% if you don’t use it on payroll, they can go to utilities or read. And so there’s there’s more money out there, not just for payroll, even though it’s largely geared to payroll.
00:07:32.130 –> 00:07:36.510
The Our Shawn: But it has to be. And one thing we talked about the other day. Michelle is, you know, rent is
00:07:36.810 –> 00:07:46.320
The Our Shawn: If you read law. And again, this is all kind of rushed through right. That’s why we have this eight week period, which, you know, really should have probably been two months to get most people to have normal pace cycles.
00:07:46.890 –> 00:07:54.030
The Our Shawn: And then rent. They say it’s for a lease, you know, signed before February 15 of 2020
00:07:55.110 –> 00:08:05.970
The Our Shawn: Which you know for some employers, you know, if you renew your lease. Let’s say you know as you stayed in the same space. But your lease renewed then technically you’re not paying rent on the lease signed before
00:08:06.660 –> 00:08:18.570
The Our Shawn: February 15 or may or may not be relief on that later, but you need to really carefully look at that and do some planning, right. So we’re talking about getting a spreadsheet out looking at your HR side but also looking at some of your overhead expenses as well.
00:08:20.100 –> 00:08:30.360
Michelle Griffin: Yeah, there was, um, and some of my clients or even people I was talking to that we’re looking at expanding or moving buildings and
00:08:30.990 –> 00:08:37.800
Michelle Griffin: They were smart, and obviously stopped and didn’t move on. This is before you know there was even the discussions of people working from home.
00:08:38.340 –> 00:08:45.300
Michelle Griffin: And I’ve got clients that are office sharing and things like that. And so that has been able to
00:08:45.690 –> 00:08:53.760
Michelle Griffin: You know they were smart enough that they are at least lucky enough that they weren’t put in that position where things were signed after February 15. They just left things status quo.
00:08:54.540 –> 00:09:00.630
Michelle Griffin: And so I think that was, you know, I think some people were kind of running into those situations. I was also looking for
00:09:01.560 –> 00:09:08.100
Michelle Griffin: You know, an office space and we were starting to look into things, and we would have likely signed after February 15. And again, we were also put on hold.
00:09:08.760 –> 00:09:17.490
Michelle Griffin: So I think some of those people if they did end up doing that, that might end up having to be something that’s not going to be applicable alone.
00:09:18.750 –> 00:09:20.760
Michelle Griffin: Or ends up becoming alone and not forgivable
00:09:22.050 –> 00:09:31.470
Michelle Griffin: I think the other kind of mark date to watch for is June 30 because that’s the date you have to reinstate your head count back to what it was when you applied for the PPP
00:09:31.950 –> 00:09:42.360
Michelle Griffin: Um, I don’t know if they’ve created a formula for if you any particular numbers that are below your original account number, um, they’re supposed to be.
00:09:43.410 –> 00:09:47.820
Michelle Griffin: Part of your loan, what can’t be forgiven if you don’t reach that number again.
00:09:48.300 –> 00:09:56.190
The Our Shawn: Right so yeah you got two sides you got payroll and then headcount and they’re radically, you know, according to the guidance that we’ve seen.
00:09:56.820 –> 00:10:06.270
The Our Shawn: You know, you need to both spend the money at least 75% on payroll needs to go out the door and then you also need to get back to the same headcount that’s looking at full time employees.
00:10:06.660 –> 00:10:19.290
The Our Shawn: part time employee, some people are saying maybe look at the IRS for its guidance on what have a full time equivalent employees, but there’s not even full guidance on what what we should be doing there, but conceptually, the idea is
00:10:20.490 –> 00:10:35.670
The Our Shawn: You need to have the same headcount as when you went into the PPP process and then you need to have the same amount of payroll. So you’re gonna have to do some planning. Right. And I think next word are really talk about the deeper HR issues which is
00:10:36.750 –> 00:10:42.810
The Our Shawn: Some employers are having a hard time getting people to come back because they’re getting good on employment payments or
00:10:43.680 –> 00:10:47.910
The Our Shawn: They’re just they’re disengaged, or they don’t want to come back. I’ve heard of some people
00:10:48.570 –> 00:10:59.400
The Our Shawn: Who because the unemployment payments so good. They did get the employee back and how the employee doesn’t want to work because they’re basically like I’m working on now showing up to the office every day and I’m making less money than I was making two weeks ago.
00:11:00.660 –> 00:11:05.910
The Our Shawn: So, you know, some employers are going to have to ship their team right and some some employers, maybe you had
00:11:06.360 –> 00:11:07.860
The Our Shawn: A certain headcount before
00:11:08.760 –> 00:11:19.530
The Our Shawn: coven 19 and now you need a different headcount because your business just changed so much. Which brings up some of the core employment issues, Michelle. So, so what happens if you want to
00:11:20.340 –> 00:11:25.980
The Our Shawn: Want to change your team up, you need to terminate somebody because they’re not performing. What do you do with this loan hanging over top your head.
00:11:26.580 –> 00:11:36.450
Michelle Griffin: Yeah, from, you know, because they’re not tracking it by personal person, it’s just the headcount if you
00:11:37.050 –> 00:11:47.790
Michelle Griffin: Have you know legitimate business reasons to terminate a person either for performance and you know they’re you know disengaged, they’re refusing to come back. It could either be
00:11:48.060 –> 00:11:57.360
Michelle Griffin: Because they, you know, ended up receiving unemployment and they don’t want to return or they may be too scared to return and do to just being exposed to covert 19
00:11:58.470 –> 00:12:09.810
Michelle Griffin: The there’s regulations under OSHA that you, you know, have to make your environment safe for your employees. But just having the risk of getting exposed to coven 19 and this is
00:12:10.200 –> 00:12:16.080
Michelle Griffin: The medical situation is that, you know, hospitals, that’s a whole nother ballgame. But for normal office spaces. That’s not a normal threat.
00:12:16.590 –> 00:12:23.190
Michelle Griffin: And so that’s not a legitimate reasons for people not to come back to work. And so if they’re too scared, just from a normal office environment.
00:12:23.490 –> 00:12:31.260
Michelle Griffin: And that, that can be a reason that you may need to terminate their employment or if they’re just not performing if they weren’t performing while they were working from home.
00:12:31.950 –> 00:12:40.440
Michelle Griffin: They return to work or they you know are disengaged. They have family issues, things like that that prevent them from working their full capacity. You can terminate them.
00:12:40.890 –> 00:12:48.120
Michelle Griffin: I just recommend that you document as if you would normally, um, you know, make sure you follow your processes, your procedures.
00:12:48.420 –> 00:12:56.250
Michelle Griffin: You’re working with your HR people making sure that it’s not you know anywhere near any kind of complaints or, you know, to be really care about retaliation, things like that, but
00:12:56.580 –> 00:13:04.470
Michelle Griffin: definitely talk to your legal counsel. Talk to HR and, you know, follow your normal processes and procedures for for situations where people weren’t
00:13:05.190 –> 00:13:17.190
Michelle Griffin: You know weren’t performing in general. Anyway, and making sure that you have those documentation for in case you ever need that. But you have to replace that person and you have to make sure you’re maintaining your head count.
00:13:17.640 –> 00:13:25.560
Michelle Griffin: And that you’re looking at those full time equivalents and that you’re watching those the due dates and the extended dates for for the longest thats hanging over your head.
00:13:25.830 –> 00:13:30.780
The Our Shawn: Yeah, yeah. I mean, the payroll part me real tricky, right, doesn’t mean you have an employee come in.
00:13:31.290 –> 00:13:38.970
The Our Shawn: You know, they’re refusing the work or the you can’t make reasonable accommodations for over now they you know they they they only want to work from home.
00:13:39.750 –> 00:13:48.270
The Our Shawn: They won’t come in and see the customers or, you know, they’re just not motivated now or whatever happens and you decide I want to do a termination. Now you gotta remember
00:13:48.900 –> 00:13:57.750
The Our Shawn: You still got this 75% number hanging over hanging out there that you’ve signed with the bank that you’ll spend 75% of the money on payroll.
00:13:58.440 –> 00:14:09.900
The Our Shawn: So that means you’re probably gonna have to bring somebody in pretty quick to replace them. So you don’t have kind of that normal hiring window because you’re tied to this eight week period with your life so to require a lot of planning for employers.
00:14:10.530 –> 00:14:22.080
Michelle Griffin: Yeah, and hiring people quickly is it, it’s going to be challenging. I think for employers and this is where they really should be talking to their HR specialist and because so many people have been laid off.
00:14:22.560 –> 00:14:28.860
Michelle Griffin: And if they decide to open up position. They’re going to be completely flooded with with a lot of people and a lot of applicants and
00:14:29.190 –> 00:14:37.530
Michelle Griffin: Making sure they get through that and choosing the right candidates and you know it’s kind of cold, warm body syndrome. You just kind of just get someone in the door. Just because you need to, you have
00:14:37.530 –> 00:14:39.270
Michelle Griffin: To don’t know if they’re fully qualified
00:14:39.540 –> 00:14:49.800
Michelle Griffin: So making sure you’re going through some kind of applicant screening process that’s valid and applicable to your, your company is going to be important. You don’t want to just hire a person just to get them in the door.
00:14:50.280 –> 00:14:53.700
Michelle Griffin: And then turn around and have you know performance problems with them.
00:14:54.270 –> 00:15:05.610
Michelle Griffin: And so you’re going to want to have to make sure that they’re fully qualified and take the time to do that. So that’s also another kind of challenge I think employers are going to have, and there’ll be relying on HR to try to navigate some of that.
00:15:06.030 –> 00:15:10.230
The Our Shawn: That’s something you ought to be ready for if you see if you start seeing the termination.
00:15:11.880 –> 00:15:13.950
The Our Shawn: Necessity coming up in your business.
00:15:14.610 –> 00:15:20.310
The Our Shawn: For whatever reason, you’re then going to have to think about the hiring mean you brought in to do the hiring faster if you want to
00:15:20.940 –> 00:15:30.090
The Our Shawn: Fully leverage your PPP money because you’re going to have to keep the payroll going you you know this this this way this loan is written, it’s not really forgiving to
00:15:30.930 –> 00:15:38.190
The Our Shawn: Well, we had a position open for two or three weeks. So we had a payroll go down and the payroll went up and the PPP was really not set up for that it’s
00:15:38.640 –> 00:15:41.760
The Our Shawn: Even payroll rolling for this eight week period. So that’s going to require
00:15:43.440 –> 00:15:47.970
The Our Shawn: Probably hiring very quickly or putting some money somewhere else or something like that.
00:15:48.390 –> 00:15:53.820
Michelle Griffin: Yeah, it definitely should be looked at, to rehire people that were terminated already
00:15:54.270 –> 00:16:02.280
Michelle Griffin: And, you know, before trying to hire someone new. Obviously there’s a ramp up period if you’re able to bring back and re hire people or
00:16:02.610 –> 00:16:09.210
Michelle Griffin: reinstating people that were on furlough. I mean, that would definitely be the first first place to start before trying to find brand new people.
00:16:09.600 –> 00:16:16.500
Michelle Griffin: And you know, it’s definitely necessary for people to bring or for employers to bring their head count back up that they need to be pretty strategic about it.
00:16:17.010 –> 00:16:26.370
Michelle Griffin: And play it. I think they need to be more strategic about their business. Rather, I mean, while keeping the deadline of june 30 in mind and the loan procedures in mind but
00:16:27.390 –> 00:16:34.860
Michelle Griffin: I mean, I think it would be smarter to focus on your business needs. Then, to try to just only beat the deadline, but you’d have to do both essentially
00:16:35.130 –> 00:16:39.810
The Our Shawn: You have to do both. You know what I mean, I guess, you know, maybe there may be cases where it makes sense to
00:16:40.170 –> 00:16:46.020
The Our Shawn: You know, then recalculate how much PPP forgiveness, you’re going to get ready to go to your bank and say, well, what if
00:16:46.620 –> 00:16:58.050
The Our Shawn: You know I lay this employee. Awesome. I don’t pay payroll for two or three weeks. And now I come in under the 75% mark because I had a couple position one or more positions open. What’s my loan forgiveness and it looks like
00:16:58.680 –> 00:17:08.100
Michelle Griffin: Right, and then you know the the applications with the bank is going to be the next step is the forgiveness process directly with the lender that provided the PPP loan.
00:17:08.880 –> 00:17:19.950
Michelle Griffin: So it’s going to be, you know, the next step of saying what those guidelines are going to look like what those applications deadlines and needs are going to look like and making sure that everyone’s working directly with the lender again.
00:17:20.310 –> 00:17:27.540
The Our Shawn: Yeah, you should go ahead and I recommend everybody go ahead and start collecting all your documentation. Right. We know payrolls mood part of it.
00:17:28.470 –> 00:17:34.500
The Our Shawn: Term payroll for a 75% i mean i includes things like you know the payroll payment to the employee, plus the taxes.
00:17:35.190 –> 00:17:48.450
The Our Shawn: Your usual benefits. There’s a whole bunch of stuff that can go into that 75% calculation, but you need to start pulling those reports by putting a second copy in a file or making you know or saving a mental electronic folder.
00:17:48.900 –> 00:17:55.380
The Our Shawn: So that you can forward them to the lender at the end of this process as we know the lenders going to look at those payroll reports and they’re going to need to see that.
00:17:56.880 –> 00:17:57.870
Michelle Griffin: Yeah, be
00:17:59.010 –> 00:18:07.590
Michelle Griffin: Um, I guess you have any advice on like the 25% used on utilities and rent and if it’s not properly used um
00:18:07.620 –> 00:18:08.070
The Our Shawn: Yeah, you’re
00:18:08.310 –> 00:18:11.610
Michelle Griffin: The penalties or slips into what that 1% loan looks like.
00:18:11.670 –> 00:18:14.130
The Our Shawn: Right, you’ve got a couple things going on there so
00:18:14.640 –> 00:18:25.650
The Our Shawn: You’re going it alone amount of a certain amount. It was calculated based on your payroll and then they multiplied it up. So you’re usually getting more than what your normal payroll is as part of this loan for that eight more than normal eight weeks of payroll.
00:18:26.940 –> 00:18:31.050
The Our Shawn: So you’re going to have to go back and do some math and figure out
00:18:32.880 –> 00:18:45.780
The Our Shawn: You know how much are we, how much are we paying people, how much is the payroll part and and if you look at the 20 the other stuff you can include it’s utilities mortgages mortgage interest rent.
00:18:47.010 –> 00:18:51.600
The Our Shawn: So, utilities, so you can, you know, pay your cell phone bill and things like this. So,
00:18:53.250 –> 00:19:00.390
The Our Shawn: You can use the money for that you need to be very careful because that’s what the loads for if you read it if you’re only supposed to use the loan money for that so
00:19:00.990 –> 00:19:12.570
The Our Shawn: You want to be careful. You’re not using the loan money for other stuff that’s not approved and then yes, if you don’t spend the full hundred percent alone, and it does turn into a loan and you have to pay it back with interest.
00:19:13.680 –> 00:19:23.610
The Our Shawn: You know the one as 1% so it’s it’s a good low interest rate, but you need to make sure you don’t violate the loan term for the beginning by using the money for stuff. You’re not supposed to use it for
00:19:24.300 –> 00:19:32.220
The Our Shawn: And then a lot of people are segregating this money into a separate account or doing separate accounting right see they’re not using the PPP Bonnie for non approved purposes.
00:19:32.880 –> 00:19:37.890
The Our Shawn: And that’s probably a good thing to do is you know what some people are talking about setting up a separate bank account.
00:19:38.550 –> 00:19:42.420
The Our Shawn: And just using approve payments out of there for PPP stuff.
00:19:42.930 –> 00:19:54.960
Michelle Griffin: Yeah, that’s exactly what I did for for my business and we set up a whole new bank account and with the it was brand new, just for the deposit of the PPP
00:19:55.410 –> 00:20:05.310
Michelle Griffin: And I tied my payroll and provide I use gusto for payrolls for small businesses. And so I changed as soon as that loan was approved.
00:20:05.670 –> 00:20:17.430
Michelle Griffin: I changed the routing and, you know, a CH information just for payroll and and for, you know, independent contractors and, you know, that kind of thing. The just what I use only for payroll.
00:20:17.880 –> 00:20:27.930
Michelle Griffin: And and tied it to that account and was able to, you know, and then that’s where we’re going to track everything out of and from our calculation, we should have everything exhausted in eight weeks.
00:20:28.830 –> 00:20:39.000
Michelle Griffin: And use the whole thing for payroll, we may need to do a small bonus at the end. But for the most part, it looks like our just our normal payroll because we didn’t change headcount
00:20:39.510 –> 00:20:50.430
Michelle Griffin: And so our calculation going into this is the same calculation that we should use and as long as our, you know, normal payroll stays the same for the next eight weeks, we should exhaust it like normal. Okay.
00:20:50.880 –> 00:20:55.740
The Our Shawn: Yeah, so, and you’re just doing you’re doing tracking. Right. So you’re looking at advanced anticipating what you’re putting all
00:20:55.740 –> 00:20:56.100
Michelle Griffin: Of our
00:20:56.280 –> 00:21:03.420
Michelle Griffin: Payroll reporting and everything else for that just we felt like that would be definitely the easiest way to do that and you know I’m
00:21:04.470 –> 00:21:14.880
Michelle Griffin: kind of curious if you know other companies. We actually had to navigate everything through different things. So we ended up working with a different base and then our normal bank.
00:21:15.690 –> 00:21:21.150
Michelle Griffin: So everything is kind of cut and dry and very clean, from the very beginning because we had to switch banks.
00:21:21.690 –> 00:21:30.690
Michelle Griffin: And once all of this is exhausted and all the funds are gone. Then we’re going to move all of our banking over to the bank that was able to help us. So that was kind of a
00:21:31.110 –> 00:21:40.050
Michelle Griffin: Nice. I guess for the bank that was able to help us and unfortunately will be leaving the bank that couldn’t help us slip. So I think we’ll start to see kind of some interesting transitions for
00:21:40.620 –> 00:21:49.440
The Our Shawn: Yeah, you’re not the only business. I’ve heard from that said they’re going to switch banks. Based on this, right. So they looked at kind of where things were they looked at what’s
00:21:50.490 –> 00:21:56.160
The Our Shawn: You know who helped them who who got things done. And a lot of people are going to change your banking alliances based on this.
00:21:58.290 –> 00:22:08.430
The Our Shawn: So yeah, if you do that, of course, now you’ve already got this dedicated PPP load account. Once you exhausted and you have all the tracking from this, there’s, you know, you could potentially use that account or set up another account with that bank so
00:22:09.510 –> 00:22:18.120
The Our Shawn: The key is just to make sure you have that PPP money allocated so you know what’s going on and you know you can clearly do your forgiveness paperwork.
00:22:18.840 –> 00:22:30.390
The Our Shawn: With the bank whatever that’s going to look like, you know, but having a dedicated account really makes that simple because you can look to that account. I think one gotcha hidden out there and we talked briefly about this the other day is
00:22:32.640 –> 00:22:44.010
The Our Shawn: There’s your there’s also, you know, the act out there. Let’s employees a small businesses get unemployment benefits or payment if they’re sick right so not unemployment, but payments were sick leave.
00:22:45.330 –> 00:22:45.870
Michelle Griffin: La
00:22:47.100 –> 00:22:47.460
Michelle Griffin: They care.
00:22:48.060 –> 00:23:03.450
The Our Shawn: They care. Exactly. The, the, the phase before it they allow sickly for small employers and it really works through the social security system and the idea being, if you’re a small employer and one of your employees goes out sick lighted the cove at 19
00:23:04.500 –> 00:23:20.340
The Our Shawn: They’ll get paid. And you have to, you know, give them the regular paycheck. The government picks up a lot of that payment. So for for when you go back to the TTP side, you have to be careful because you weren’t paying them right. The government was paying them.
00:23:20.790 –> 00:23:30.540
The Our Shawn: And so there’s a hidden gotcha out there for some employers who are going to have employees go out on sickly for covert 19 or covert 19 related family care, etc.
00:23:30.780 –> 00:23:43.950
Michelle Griffin: Yeah, so the yeah seen like my payroll company with gusto and other payroll companies that I use with my clients and you know paychecks CEOs and, you know,
00:23:44.280 –> 00:23:47.220
Michelle Griffin: All of those companies that I’ve worked directly with over this time period.
00:23:47.880 –> 00:23:58.050
Michelle Griffin: All created special pay codes to deal with the tax exemptions that are happening with the coven 19 sick leave. So yeah, if you haven’t, that’s the other kind of
00:23:58.560 –> 00:24:05.190
Michelle Griffin: Really thing. I think people have to start talking to the payroll companies, the event, you know, the lenders and everyone else when they have someone go on leave
00:24:05.730 –> 00:24:18.870
Michelle Griffin: Then you have you’re using a coven 19 sick leave, you have tax exemptions under that and you’re not, you know, you’re not paying their full salary under the law, you’re required to pay two thirds, depending on the situation, if they’re out on family versus sickly
00:24:19.980 –> 00:24:27.480
Michelle Griffin: Up to you know to up to 12 weeks after the first two weeks of leave and you know it’s quite a few weeks of that.
00:24:27.780 –> 00:24:35.490
Michelle Griffin: Yes. What does that look like if you’re trying to pay under the PPP and then you’ve got them under tax exemption status under the coconut
00:24:35.760 –> 00:24:46.710
The Our Shawn: Right, it’s not, it’s probably not going to be a payment under the PPP system, which means now your payroll has potentially now depending on the number of employees. And what else is going on and they put you below that 75% threshold.
00:24:47.370 –> 00:24:57.810
The Our Shawn: So again, do some planning and kind of run. So what if scenarios. Another thing I think Michelle that we talked a little about you got part time employees out there, you know, so you know a lot of people have employees on salary, but
00:24:58.470 –> 00:25:09.690
The Our Shawn: You know many people have employees are paid hourly somebody, you know, some don’t work full time, they might work you know 2030 hours a week, you know, depending on their, their schedule or whatever.
00:25:10.440 –> 00:25:23.820
The Our Shawn: And those employees. Well first we got a headcount issue with them, right, we got to figure out how what their full time equivalents. The statuses. The other issue is just timing right. So, because of this special eight week window.
00:25:24.840 –> 00:25:32.550
The Our Shawn: Anybody that’s not working, kind of a general salary paying the same amount every time you’ve got to figure out what that’s going to look like. During the eight week period.
00:25:32.970 –> 00:25:34.410
Michelle Griffin: Mm hmm. Yeah.
00:25:35.790 –> 00:25:51.090
Michelle Griffin: general rule of full time employees over 30 hours a week. So if you have someone under 30 hours a week and you have to figure out how many part time employees you have that are supposed to be added up to be the full time equivalent
00:25:52.050 –> 00:25:57.450
Michelle Griffin: To make sure that you’re at the headcount that you were at when you applied for the PPP by that June 30 deadline.
00:25:57.810 –> 00:26:05.250
Michelle Griffin: Then yeah, you end up with having to figure out how you calculate that and there’s a rule of thumb that you can, you know, take your
00:26:05.850 –> 00:26:16.200
Michelle Griffin: You know your total hours of all your part time people and divide that by 120 for the month which ends up being 30 hours a week times four gives you 120
00:26:16.740 –> 00:26:24.150
Michelle Griffin: So that gives you like in that so that you’re saying, and on average to be 120 hours. And it’s like, are all of these parts. I’m people
00:26:24.510 –> 00:26:30.240
Michelle Griffin: Adding up to that average. And so you may end up saying, Okay, we have for part time people with all of their hours averaged
00:26:30.660 –> 00:26:38.400
Michelle Griffin: And divided back out, we end up with 2.5 full time equivalent employees. And so then you end up putting that towards your full time numbers.
00:26:38.820 –> 00:26:43.980
Michelle Griffin: Which would have been on your, you know, your pee pee pee applications from the beginning. Are you getting closer to that number you
00:26:44.280 –> 00:26:52.860
Michelle Griffin: Were you were so I think that’s also a strategy of some companies are thinking, well, you know, we can’t bring people back full time, we can only bring them back part time
00:26:53.190 –> 00:27:00.360
Michelle Griffin: You know, due to, you know, salaries offering benefits, whatever restrictions that they may have that they’re still trying to navigate through financially.
00:27:00.870 –> 00:27:09.480
Michelle Griffin: That’s it. That’s also a, you know, kind of a hiccup that I think employers need to watch when they start saying, well, we can only bring we can only pay people for part time
00:27:09.870 –> 00:27:14.790
The Our Shawn: Right. And, you know, we talked earlier to about the concept of putting in the stub period.
00:27:15.630 –> 00:27:25.590
The Our Shawn: You know, short period at the end if you need to get more money into an eight week period that you’re already paying you maybe just accruing and paying later than normal course of business, you may move up the payday.
00:27:26.190 –> 00:27:32.880
The Our Shawn: But if you start moving up the payday. And you have these non salaried employees who aren’t paid the same per period, you’re going to have to then
00:27:33.450 –> 00:27:40.200
The Our Shawn: Adjust all of your accounting to their right, you’re going to have to have them turning their timesheets center, you’re going to have to run reports on how many hours they weren’t
00:27:40.680 –> 00:27:51.150
The Our Shawn: Going to get that through to your payroll provider. So you really need to think about you know really what Week seven and eight looks like in this learning process. If you’re going to be doing that to maximize the amount of money that you pay payroll.
00:27:51.690 –> 00:27:52.080
Michelle Griffin: Right.
00:27:52.500 –> 00:27:54.150
The Our Shawn: And so some planning.
00:27:55.800 –> 00:28:01.500
The Our Shawn: A little more logistics right and you’re gonna have to update your have to notify the employees in advance so they know what they’re doing.
00:28:02.580 –> 00:28:12.870
The Our Shawn: They’re going to turn our payroll reports and you have to make sure the accounting gets it over to the payroll company. And then the money’s, you know, you know, prepared and sent out with checks before the end of the eight weeks.
00:28:14.220 –> 00:28:20.490
The Our Shawn: So, you know, it just, it can be really, it can be a little bit tricky on that end. Um, so
00:28:21.900 –> 00:28:30.840
The Our Shawn: You know, let’s let’s zoom in a little more. We did talk briefly about, you know, kind of, you know, changing your team off and I think a lot of people are just going to be forced to do that so
00:28:32.490 –> 00:28:36.510
The Our Shawn: Employment Law stays the same, right, Michelle, nothing really changes there.
00:28:37.560 –> 00:28:47.970
The Our Shawn: But this is a good time to have good practices because probably you’re looking at a higher risk of challenge now because you know people are probably going to go on on applying for a while the job markets, not the same.
00:28:49.290 –> 00:28:51.180
The Our Shawn: You know, sometimes as an employer, you get
00:28:51.690 –> 00:29:02.670
The Our Shawn: You get a little bit of you get a little bit of a free pass if you get rid of that employee and they find another job right away. They often don’t bring a lawsuit, because they’re often next job. And they’re, you know, they’re making money, but
00:29:03.150 –> 00:29:12.210
The Our Shawn: I could first see we’re going into a market where people might hold a grudge longer. And so, um, you know, what are, what are some good ideas.
00:29:12.840 –> 00:29:22.350
The Our Shawn: As far as, you know, just kind of, you know, what should an employer. We talked a little bit about making the file, but what types of things should be thinking about, you know, in of course
00:29:22.980 –> 00:29:32.700
The Our Shawn: Talking to her employment counsel, but what should they be thinking about as far as showing that you know it’s a termination for cause. It wasn’t for discriminatory reasons or it’s just part of the business.
00:29:33.750 –> 00:29:42.060
Michelle Griffin: Yeah, I think employers need to kind of have to think about two different things when they’re dealing with this one. Um, largely, they should
00:29:42.510 –> 00:29:51.210
Michelle Griffin: Be caring, I guess. And have they need to. I don’t want to kind of say they really need to think about the reputation but word is going to get out if you treat people poorly.
00:29:52.350 –> 00:29:59.130
Michelle Griffin: So you need to be very as employers be very mindful about how you’re treating people, the timing of things.
00:29:59.670 –> 00:30:09.690
Michelle Griffin: You don’t want to discriminate against anyone for any reason, obviously there’s legal ramifications for that. But you want to make sure that you’re doing things for business purposes.
00:30:10.320 –> 00:30:21.780
Michelle Griffin: And, you know, there’s a lot of times when you’re in the you’re terminating people and you really tell them you know it’s it’s business. It’s not personal. And unfortunately, this whole thing with everybody. It’s going to be personal. And people are going to take it very personally
00:30:22.470 –> 00:30:35.100
Michelle Griffin: So making sure that there has, you know, there’s a documented substantial reason for for letting people go, definitely. You want to make sure you’re doing things for the right reason for your business. It needs to be on a
00:30:35.340 –> 00:30:47.280
Michelle Griffin: On a wavelength that’s going to help the business in the long run. So if it’s terminating people that are underperforming to bring people in that are you know better performers give you know other people in a more qualified people
00:30:47.610 –> 00:30:54.960
Michelle Griffin: An opportunity with the company and change out your head count that way. But I think it’s going to be really, really important that people
00:30:55.440 –> 00:31:08.580
Michelle Griffin: Are you know doing everything that they can to help out the business and the way that’s a responsible way. And all of the management, I should say when I mean day. So yeah, I think that it’s important that
00:31:09.420 –> 00:31:23.520
Michelle Griffin: The management and the, you know, CEOs upper level people are paying attention to how their employees are being treated if they need to let people go do it. You know, in a way that you know makes sense but also is respectful for them.
00:31:25.020 –> 00:31:36.330
Michelle Griffin: And you don’t want to. You don’t want your reputation drugs at the mud through this. I mean, we’ve kind of already started to see, you know, there’s companies that were given the PPP that had to give it back because
00:31:37.020 –> 00:31:48.690
Michelle Griffin: Their reputation was really damaged by that. And so, you know, it wasn’t fair to small businesses that are really small businesses. So I think a lot of companies are having to be really mindful and
00:31:49.020 –> 00:31:57.480
Michelle Griffin: This kind of culture and the situation that comes the same thing when when you have to deal with hiring people and terminate people and how you treat people along the way, if you’re
00:31:58.140 –> 00:32:08.220
Michelle Griffin: wanting them to come back to work in certain environments. We’ve seen a lot of people, releasing videos in the medical environment walking out of their jobs because they’re being asked to work without p p
00:32:08.640 –> 00:32:10.440
Michelle Griffin: Which is the proper protection equipment.
00:32:10.920 –> 00:32:20.610
Michelle Griffin: I think the same thing is going to happen if you, you know, you need to be prepared to clean normal surfaces on a regular basis. You need to make sure that your environments are safe for people to come back to work.
00:32:21.060 –> 00:32:29.190
Michelle Griffin: And so it’s it’s going to be kind of a challenging environment, but just taking care of people and caring. I think it’s gonna go a long way.
00:32:29.580 –> 00:32:35.850
The Our Shawn: Yeah, I think. Yeah. Like you’re talking about. It’s going to enhance even more so than normal. The communication side of it, right, because it’s not
00:32:36.390 –> 00:32:44.820
The Our Shawn: You know, because everybody’s sensitive things around usual it’s probably a good time to communicate, especially if you have to make hard business decisions. If you have to
00:32:45.300 –> 00:32:52.230
The Our Shawn: Terminate somebody or change your team out you need to communicate with everybody, you know,
00:32:52.980 –> 00:33:04.020
The Our Shawn: BEST BEST YOU CAN within the law, you know, communicate, hey, you know, we’re not doing this because we don’t like you. It’s just the way our business is going. We had to get rid of this team or this portion of our business because
00:33:04.530 –> 00:33:05.970
The Our Shawn: We’ve had to go a different direction.
00:33:06.960 –> 00:33:12.660
The Our Shawn: You know, we don’t need as many servers at the front of the restaurant because now we’re doing more delivery, because the state won’t let us keep
00:33:12.720 –> 00:33:22.590
The Our Shawn: The front of our restaurant open and we have to try to maximize our revenue right. Those are the kind of things where you can communicate that perhaps and maybe maybe cut off some of the hard feelings before they get too deep.
00:33:23.910 –> 00:33:27.120
Michelle Griffin: Yeah. Yeah, and I think it’s, you know, some
00:33:27.630 –> 00:33:36.840
Michelle Griffin: And I’ve heard some companies where they would say, Oh, we’ll just let people go and we won’t fight unemployment will tell them, just go File and employment and they’ll be taken care of. And we’re seeing a lot of problems with unemployment.
00:33:37.170 –> 00:33:44.280
Michelle Griffin: And if people aren’t able to file or they weren’t able to file timely and while those that does backdate to the date that you were terminated.
00:33:44.730 –> 00:33:55.260
Michelle Griffin: And, you know, that is still it’s spiking and, you know, the government can, you know, have to rejuvenate funds for unemployment, things like that. So,
00:33:55.800 –> 00:34:05.250
Michelle Griffin: It’s not like I really hope that employees don’t just kind of rest on unemployment and you know really try to get back to work, because
00:34:05.730 –> 00:34:15.060
Michelle Griffin: Unemployment is restrictive, especially in the state of Florida. We don’t have as many weeks on unemployment as other states do it doesn’t carry as much money as other states.
00:34:15.540 –> 00:34:28.380
Michelle Griffin: So, you know, this isn’t a state to just sit back and kind of rely on that. I think that, you know, people really need to think about how long they can last on that kind of money and when they should start looking for jobs again as they as they reopen yeah
00:34:29.280 –> 00:34:38.130
The Our Shawn: Yeah. Did you know that’s just one of those things where, I think, you know, from the employer side just gonna be concerned with the extra $600 from the federal government. It’s create creating weird incentive so
00:34:38.910 –> 00:34:51.450
The Our Shawn: That’s something just to know to write if you do change a lineup. You may have some long or son or a lot of more unemployment claims you normally would have right the employees, move on as quickly. So anything else, people should be thinking about the show.
00:34:52.380 –> 00:35:04.740
Michelle Griffin: Um, I mean I, you know, definitely talk to you know your banks, talk to your lenders, talk to your attorneys me and making sure you’re staying really really informed.
00:35:05.220 –> 00:35:14.760
Michelle Griffin: Read the fine print of your documents and make sure you really understand what what you’re signing on to and you know you understand that it’s going to be
00:35:15.270 –> 00:35:28.020
Michelle Griffin: What’s forgivable what’s not. What happens if you violate your loan. So yeah, make sure you understand the the fine print of everything that’s happening. It’s happening pretty quickly. And so just make sure that you’re paying attention.
00:35:28.800 –> 00:35:36.090
The Our Shawn: Yeah Alright folks would love your questions and comments will be checking them out on Facebook and also check them out on the future done right YouTube channel so
00:35:36.450 –> 00:35:44.040
The Our Shawn: Make sure you subscribe, drop your comments. Michelle, I’ll be checking in to see if anybody has any questions and we may come back with something like that so
00:35:44.490 –> 00:35:47.220
The Our Shawn: glad you joined us. Michelle, thanks for a great session.
00:35:48.030 –> 00:35:59.070
The Our Shawn: And look forward to more of these. And hopefully it helps you folks out there. We really want to hear from you. So give us your questions give us what you’re dealing with. Whether it’s PPP stuff or otherwise, and we’ll come back and chat with you all again. Alright. Thanks everybody.