Answers to Common HR-related Paycheck Protection Program Questions

Whether a self-employed individual already applied for or received PPP funding, or plans to, certain employee situations may need to be addressed in the short-term.

The Adams Brown team recently spoke about some common HR scenarios that other employers are dealing with right now.

  • Q: If I don’t have work for my employees to do, but I already received PPP loan funding, what do I do?

    You have the option to continue paying the employees regardless of whether there’s work. Regular payroll costs are included in the PPP forgiveness calculation.

  • Q: Can I pre-pay employees for future work periods that are six, eight, or more weeks in advance?

    The answer here is no. It’s important to maintain accurate payroll records for the time periods. Paying for future work could get the borrower in trouble with the loan forgiveness down the road.

  • Q: If I start paying employees now, but my loan runs out in eight weeks, can I put them back on unemployment?

    Absolutely. That might actually be a good reason to get them back on your payroll with this PPP money so that you can save their unemployment eligibility for later, especially if this lasts longer than we anticipate, or if your particular business is hit a little bit harder and takes longer to bounce back.

    This is also a good strategy to maintain good relationships with employees.

  • Q: What if my employees don’t want to be put back on payroll because unemployment compensation is more attractive?

    The first thing to do is communicate, communicate, communicate. Be transparent, be honest, show empathy about their situation, but communicate your expectations for them to come back to work and on what date.

    Second, could you consider a voluntary, unpaid leave of absence? If so, know this will affect their unemployment, which is something you need to communicate.

    Finally, this may sound harsh, but if they absolutely refuse to come back, then you can report them to your state for refusing active available work, and as a result, they will lose their unemployment benefits. But before you take this step, again, communicate and have an honest conversation about expectations and teamwork.

  • Q: Can I implement a temporary higher wage?

    Yes. This is another option that some employers are taking right now to attract employees to come back. Get something in writing and put a beginning and end date on the temporary work arrangement. Be very specific about what the hourly wage is going to be and what the expectations are for the employee(s).

  • Q: What if I need to terminate an employee right now?

    Maybe this is an employee that hasn’t been the best team member, or it’s time to just part ways. This is okay.  Follow the best practices guidelines of documentation, reporting, communication, and so forth to ensure you are reducing risk.  Feel free to talk to an HR advisor or legal counsel if you have specific questions about your situation.

  • Q: Are there options for partial unemployment for my employees?

    Yes. There’s an array of situations. Your state may offer partial benefits if an individual is still working but on a reduced schedule.  Other states require you enroll in a shared work program to ensure your employees can both work a reduced schedule and receive partial benefits from the state.

    Above all, be very careful about how you’re responding to all unemployment employer statements you’re receiving from your state’s Department of Labor. These employer statements are crucial for what happens with employees’ eligibility for unemployment, among other scenarios. Employees could be in tough financial situations right now, and there have been instances of unemployment fraud. Stay compliant and pay attention to the paperwork.

  • Q: As a self-employed individual, when can I get unemployment from my state?

    This is a popular question. Under the CARES Act, there are expanded unemployment benefits for self-employed individuals. Unfortunately, most states were slow to implement these programs due to lack of guidance from the Federal DOL and high volume of claims. In Kansas, self-employed unemployment claims are set to be paid beginning May 25, 2020.  For Missouri, the eligibility period for self-employed unemployment compensation is March 29 through July 25, but only started opening claims for the self-employed the week of April 19.

  • Q: As a self-employed individual, if I am only able to file for unemployment now (or when Kansas opens), can I claim benefits retroactively?

    Usually, unemployment compensation is not retroactive. The general rule is that when you apply for unemployment, the week you apply is your first benefit week. However, right now, there is an exception. On the Missouri side, claims can be retroactive to the week of March 29; however, the provisions for the self-employed still only extend to July 25. And in Kansas, we just don’t know yet.  Additional information may be found here.

To view the on-demand discussion of other PPP loan funds aspects and how the CARES Act is impacting the agricultural industry, click here.

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