COVID-19 Business Update – 14 October 2020
Prior to COVID-19, models of what could happen during a pandemic overstated the possible global death toll, but understated the potential hit to GDP. But as a series in The Economist explains, our current pandemic may have lasting impact. The impacts of shutting down schools for months at a time may persist for decades. Governments around the world are issuing debt at levels never before seen to finance support for workers and businesses. The virus continues to spread, but the extent of impact in poorer countries remains largely invisible. Rapid development of vaccines mean that they may be available in 2021, but their safety and efficacy are so far largely unknown. The shift to an online world for retail, work, entertainment, and education will likely influence us for years to come. The question we all have to answer is whether those impacts will result in meaningful changes that help to elevate all or that exacerbate divisions and inequalities.
We sincerely hope for positive changes that help to make this a better world!
CARES ACT UPDATES
Another stimulus bill?
With the election only weeks away, and the Senate focused on confirmation hearings for Supreme Court Justice nominee Amy Coney Barrett, the White House and both parties have an uphill battle to pass a second stimulus bill before the election. President Trump has offered support for a $1.8 billion package, which includes another round of stimulus payments, while Democrats have proposed a $2.2 billion package, which has little chance of approval by the Republican-led Senate.
Economic Impact Payments (aka Stimulus Checks)
The IRS has extended the deadline to November 21 for non-filers to enter information using the IRS non-filers tool so that they may receive a stimulus payment by year’s end. Millions of people are eligible for stimulus checks but have not yet received them because their income was too low to require filing a 2018 or 2019 tax return. Using the secure non-filers tool will allow the IRS to send payments to eligible recipients this year. Otherwise, they will have to wait until 2021 when they file a 2020 tax return.
Paycheck Protection Program (PPP)
The SBA recently released guidance in three areas for the PPP. For many small business owners, the most important update is a simplified process for those who received loans of less than $50,000. Eligible recipients can use the newly released Form 3508S. In addition to a simpler form recipients of smaller loans will not have to reduce the forgivable amount for reductions in the number of full-time equivalent employees or salaries and wages paid to employees.
Another update clarifies that the extended deferral period of ten months applies to all PPP loans, regardless of when the loan was received or what the promissory note from the lender states. When the PPP was initially passed, loans had a six-month deferral period, which means that payments for some of those early loans would be coming due now. However, the PPP Flexibility Act extended the deferral period to ten months. This new guidance can be found as the answer to question 52 in the SBA’s frequently asked questions for the program.
Another SBA update clarifies the treatment of loans when there is a change in ownership of an entity that received a PPP loan. Organizations are required to notify the SBA in writing of any planned ownership changes before they occur. Some changes require SBA approval, which may take up to 60 days. Regardless of any ownership changes, the organization will remain responsible for complying with all requirements for PPP loans, including repayment.
The COVID-19 pandemic has forced thousands of small businesses to close down for good. The IRS requires formal processes to close a business for tax purposes. Don’t forget about state tax authorities, who will also likely have additional steps that are required.
WORKING FROM HOME
As businesses begin to shut down offices and switch to remote work forces, office furniture liquidators are offering bargains on high-end chairs and desks to remote workers. In some cases, liquidators are selling chairs and desks back to the same employees who used them previously so they can furnish their home offices.
Work relationships tend to be tenuous and highly dependent on regular get-togethers for lunch and happy hour and random meetings in hallways or other common areas. But they are also highly important for productivity and for creating an engaged workforce, according to this article from the BBC. Because those regular connections have become more difficult in the remote world, a new approach is needed. Committing to a regular lunchtime phone call or Monday morning catch-up call can help. Creating a separate Slack channel or sharing non-work-related links can help make that tenuous relationship stronger.
For those at the beginning of their careers, starting out in a remote environment can have lasting impact on one’s future career prospects, as this article in The Atlantic describes. “How you begin your working life tends to shape your professional and financial prospects for decades to come.” Remote workers miss out on the social interactions, connections to others outside their immediate circle of co-workers, and the simple satisfaction of making new friends at work.
At the beginning of the pandemic, it was theorized that extroverts might have a difficult time adjusting to an environment lacking in the frequent face-to-face interactions that seem to energize them. However, recent research seems to show that it’s not one’s position on the introvert-extrovert spectrum that correlates to success working at home, but rather two other factors. People exhibiting the characteristic of agreeableness are better able to go with the flow of a new environment and to adapt readily to new ways of getting work done. However, those exhibiting the trait of neuroticism tend to be more anxious and fearful of failure and have a harder time working at home.
LIVING WITH AND AFTER THE PANDEMIC
Work in the post-pandemic world
Even before the pandemic, interviewing candidates for a position had, at best, a 50% rate of accuracy, and may have failed up to 82% of the time. Conducting an interview via zoom isn’t much better. But according to this article in Forbes, a few simple tweaks can make the interview experience better. Position the camera so that your head, shoulders and upper arms are in view. Fast speakers should slow down to give the other party time to understand and process the question. Removing your own image from your view helps you focus on the other party, not on how you appear to the other person. Candidates should be encouraged to keep a copy of their resume or interview notes in front of them to decrease the stress of having to remember everything.
- Payroll, HR and benefits company Gusto has put together An Employer’s Guide to Navigating the Coronavirus
- Accounting Today has a special page for articles on COVID-19
- The best source for up-to-date and accurate health information is the Center for Disease Control (CDC)
- The CDC also has recommendations for businesses and employers
- Intuit QuickBooks has a dedicated page to help small businesses
- The Red Cross has pointers to help young adults stay safe
- Entrepreneur put together a listing of free tech resources for remote work
- Kiplinger has a state-by-state guide to absentee ballot voting.
- The Consumer Financial Protection Bureau has warnings about COVID-related scams
- Fast Company has a listing of the best productivity apps for 2020
- The New York Times has an online newsletter on K-12 and higher education
- The Wall Street Journal has a collection of articles on education
We sincerely hope that you and your family are well and remain well. If you have any questions or concerns, don’t hesitate to reach out to us. We are all in this together!