We have received several calls about filing for unemployment benefits.
This is a strange one because as an entrepreneur you are not supposed to file for these benefits against yourself. But they can’t deny you benefits either. Technically your business is still open and you are still operating it, so you are not technically unemployed.
I remember an Unemployment Audit that I handled a few years ago. It was for a Roofing Company. Since the company could not do its job when there is snow on the roofs, the owner always filed for benefits in January and February. The auditor came in, we went through the audit, and found that the owner had received benefits. The Auditor started shaking a boney finger at me saying that he wasn’t supposed to do that. My response was, “And?” There was nothing that the Department could actually do, other than to say that it was wrong.
But one thing is certainly true, which is that you will ultimately end up paying a price for those benefits. If you do file for them, they will raise your insurance rates for a minimum of three years after the claim. I’m not saying that you can’t file. But if you do, please do so knowing that ultimately there will be a price.
I also received a call last Friday from one of my clients in the pest control business about paid sick leave. Congress recently passed the Families First Coronavirus Response Act. This new law provides for the following…
– If you have less than 500 employees, you must now offer your full-time workers 80 hours of paid sick leave
– Your part-time workers get their average number of hours worked over a two-week period in paid sick leave
This applies to all employees
– That are advised to self-quarantine
– Employees who are quarantined as part of a local, state or federal quarantine order
– Or who are experiencing symptoms and are seeking a medical diagnosis
Employees seeking paid leave for these reasons are paid at their usual rate, or it is capped at $511 per day. This paid leave is also available for
– Those caring for an individual who is subject to such an order
– One who has been ordered to self-quarantine
– Or one caring for a child whose care provider is unavailable or where their school has been closed
An employee taking leave for these reasons gets a reduced paid leave of 2/3rd’s of their usual pay capped at $200 per day.
But there is some reasonable news in this as well. Businesses are allowed to apply these sick leave payments as a credit against the employer portion of your social security and medicare expenses. If your paid leave expenses are more than the employer portion of your Social Security and Medicare expenses, then you will be refunded the difference.
But wait…there’s more. They have also expanded family leave.
In addition to the two weeks discussed above, the new law works to expand the Family and Medical Leave Act when certain criteria are met. Employees that take expanded family leave to care for a child will be compensated at the reduced rate discussed above and may not exceed $10,000 in the aggregate. The first two weeks of family leave are unpaid, but families may elect to substitute accrued vacation time, PTO, or other paid sick leave for this period. The tax credit and refund process would be the same as above. Employers have until the end of March to become compliant.
More on this to come…
I know that this is a lot to digest, but let me leave you with this one thought. The Chinese Language has thousands of hieroglyphs, each having a distinct meaning except one that has two. It is the hieroglyph for crisis and opportunity. In the Chinese mind, every crisis is an opportunity, and every opportunity is a crisis.
There is no way that this crisis is not affecting you. For the first time, if you are not considered an Essential Business, you are supposed to stay in your homes most of the time. I don’t know anyone who can do that without going nuts. Many of you are also in your homes trying to operate your business with small children home from school. Don’t let your frustrations boil over, and please don’t take this out on your children or your extended families. Let’s remember that this is a difficult time for them too. They are confused and afraid in this difficult time. Especially your children, who are ill-equipped to understand or handle this emotionally.
It is now time for you to rise up, to be the Entrepreneur that you were born to be. It is now time for you to lead.
Whatever your personal feelings or fears happen to be, you need to set them aside and be that shining light in the darkness of despair. Talk to your children. Explain what is happening. If you don’t, they will only go on the internet if they haven’t already, to figure it out for themselves. Give them the emotional tools that they will need to get through this crazy time. Reassure them that they are safe and that no matter what happens, you will be there to help and protect them.
Talk to your spouse and your extended family. If you are worried about your business and your ability to pay bills, imagine how difficult it is for a person who isn’t at the helm, having no control whatsoever. Calm their fears. Soothe their anxieties. Let them know that no matter what happens, you will all get through this together.
That you will get through this as one, as a family.
But also realize that every crisis is an opportunity. Bad economies are ultimately very good over time for the overall economy. In bad times, weaker businesses fail, leaving all of their customers up for grabs. If you can get past your fears and do the work that is necessary, you should be able to gain some market share. In other words, you should be able to turn this crisis into an opportunity.
Don’t be the rotten fruit that falls off of the vine. Be the vine. Use this to help your business grow.
As always, if there is anything that we can do to help, or even if you just need to talk, we stand ready. I remain,
Accounting Solutions Ltd.
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We have received several calls about filing for unemployment benefits.