COVID-19: What Employers Need to Know About H.R. 6201
Hey this is Alex. I think one of the things that were all realizing right now. Is this whole Corona virus situation? It's developing so fast like every single day if not every single hour and so WanNa make sure we're doing our part to give you the most up to date information about how our company is handling this but also how we see small business owners around the country leading through these uncertain times so we're going to be releasing some bonus episodes where senior leaders here within entree leadership and Ramsey solutions address them in the big topics and big questions surrounding the whole corona virus. Issue make sure you subscribe to the Entree Leadership podcast to get these bonus episodes at the top of your feed and here is today's bonus episode guys Daniel Tardy with the entreleadership team here Ramsey solutions. And I'm joined by our Mondo. Lopez Armando is our executive director of. Hr here at Ramsey solutions. And he's a good buddy and I wanted to bring 'em in and Armando Man. What crazy times right now in the world of HR yeah? I don't think we've seen anything like this Certainly in my career man. So let's say in my lifetime. That's probably true. Overlap there I imagine so. You guys know as business owners One of the biggest expenses that every business has is their payroll and entreleadership T- entreleadership. We teach that your biggest asset that you have is your team and so we're always talking about how to build a team and how to grow team and how to how to hire But right now we're just getting a lot of questions from you guys about. If you need to exercise the option of downsizing your team to kind of make it through the storm and man that can feel really scary. And we know that and Sorry that that's so tough for so many of you guys right now. It sucks. It is not a fun thing to be facing but face it with the data. Face it with some good information. We want you to make objective informed decisions. And that's why I brought in Armando to answer Some of the legal ease and things floating around especially about the bill that came out last week the HR sixty two a one There's some implications in that for small business owners so essentially Armanda my understanding is. There's some exemptions for business owners if they if they choose to lay off their team yep absolutely so I think you and Sarah already talked about putting people first and and you've already talked about the Karen concern that we as a company take With our team members yes And so I. I don't need to go back through that but What makes these conversations. These decisions hard is that there are people involved on the other end. It's right so while the bill does address some of financial concerns I. It's still hard conversation with that. Team member And so sick. Hr Sixty two zero one pass last week on Wednesday. It only applies to small businesses so these are businesses with five hundred or less. Okay five hundred or less you members. Okay so if you're under five hundred then you qualify under this bill. Today participate a couple of special provisions for companies with less than fifty so in less than fifty have a couple of nuances. That are a little bit differently but really what? Hr Sixty two zero one says. Is that if you have less than five hundred team members and you've got to lay people off or give them time Because they're sick or they think they're sick because they have a family member impacted by the Corona virus than you have fourteen days that you can take payroll tax credit and now the question always comes up what if my payroll tax is not enough so I don't have enough that I can take a credit right now with the government is saying is that they will actually issue you a check for the surplus of. He will get money back for that. Is that when they file next year or is that I mean when they go pay their Their payroll taxes so for most of our entrepreneurs are online. Right now there would be a quarterly payment quarterly. Okay so there. There's different options when you're thinking about you know. I think a lot of business owners right now are just even calculate the pros and cons of layoffs furlough keeping people on With without as much pay or partial hours and things like that Can you just talk through? Like what kind of what are the pros and cons of? If I'm saying layoff versus furlough for example is so layoff is not enough work for the business. And you truly take off payroll Almost completely if you reinstate them then they get their vacation time in other words you bridge that gap of employment so so if it never happened A furlough is I keep you on benefits. Okay and and now if I'm a that offers benefits and we are then we would pay our employer person portion of those benefits still okay and we could even opt to pay the full mount so furlough if you did that option. You're thinking okay. This is really tough right now. We don't have enough work but in two months we will. We believe we will. And so we're not letting you go. You're actually still a team member and we're just not able to pay you your paycheck right now but you still get to review your benefits having to go do Cobra or things like that where we're helping you get through it at least with the benefit benefits yeah. I don't know how many of our entrepreneurs out there have hourly team team members and so if you've got hourly team members and you just don't have enough hours for them It's hard for them to go right now and file for employment if you haven't separated them so if you have said hey all I'm doing is I don't have enough hours to give them. And so they're not really terminated. But they're not really getting any hours and so they don't have any money coming in for some of those cases. You might be better off going a furlough or a complete severance as the relations. Let's it'd be clear they if they're doing furloughed. They're not eligible for unemployment under a furlough arrangement in some states. They are okay. So have allowed that to qualify for an unemployment. Check with your local state on that When would it makes sense to activate doing pay cut? Maybe we've got half the work that we had And we want everybody to scale back and it's a weird conversation but it's kind of like hey. Do you want to work for half of what you've been working for to do? Maybe more work right now. Actually because it's not necessarily the amount of work but it's not a revenue coming in and if we're having to make cuts as a team to get through it. How do you navigate that? So you know it's funny Dinner you know this. But I'm in all these. Hr publications and like most of you. I'm sourcing in reading and talking to people that are in. Hr that have been friends for for a long time and a lot of states have a required. If you're going to drop someone's pay you have to give them notice in in those notices range from seven days to thirty days and so this is. There's not enough time right now to do some of those things. Some companies are wanting to make this voluntary and there are some states that are kind of lifting some of those restrictions But it is so specific for that stadium and our HR publications are warning against Acting too quickly. Okay against doing some of these things now even though you have a team member that says I'm willing to work for fifty percent less. If there's nothing documented there's nothing that says they're volunteering for this You've dropped someone's pay without any notice given could be recourse later if you didn't have that documentation so if the team is is truly a team and they go. Hey leader whatever it takes if we need to work for fifty percent to get through this. We're with you. We got your back. I would say that documented and and have them right up and sign. I'm choosing to do this and that way. It's not something that might prevent something in the future right We have such great people out there and you have such great employees out there. Some great team members that that are saying hey rather than have anyone get laid off. I'd rather take less money And it is not unprecedented. These kind of economic troubles have happened before. Companies have survived them by the team railing. And saying I'm willing to take a twenty percent pay-cut or I'm willing to take no vacation or burn up vacation now early So that for companies that are accruing vacation that money's already accrued so they can pay out of that vacation fund and and not have to incur. That cost today.