How to Bring Back Your Staff to Maximize PPP Loan Forgiveness
May 2020Practice Management Personnel
May 7, 2020
As you begin planning to reopen your practice, will your staff return? Or will the lucrative unemployment benefits they’re receiving, fear of contracting the coronavirus, or other factors cause them to decline? There’s only one way to find out, in order to protect your practice and maximize your PPP loan forgiveness. Here’s how.
The impact of the coronavirus has peaked in most parts of the country, and has begun to level off and decline. As such, many states are beginning to lift or modify their stay-at-home or shelter-in-place restrictions. Accordingly, it’s time for you to prepare to reopen your practice in accordance with your state’s guidelines.
Obviously, there’s a lot to do to make that happen correctly and efficiently. The first step is to determine the appropriate coronavirus protection guidelines for your state and prepare to implement them. However, you need your staff to be educated and trained on the new policies, guidelines, and procedures, and to order the necessary PPE and other equipment and supplies to carry them out.
Here’s a word of warning! Don’t blindly assume you can simply email your staff, setting the date and time for your practice to reopen, and expect all of them to show up. That’s unlikely for a number of reasons. So, you need to determine this sooner, rather than later, so that you can replace them as necessary, and have the staffing necessary to begin implementing your practice’s new policies and procedures.
The CARES Act added a $600 a week federal unemployment benefit that lasts for up to 16 weeks. Combined with your state’s unemployment benefit, a recent Wall Street Journal article indicates that more than 50% of your staff will likely be making more by NOT working, rather than returning to work in your practice. Thus, some staff will likely refuse to return, since that would mean expending time and effort in exchange for less money. Others may refuse to return out of fear of contracting the coronavirus, or because they need to care for family members. Or they may decide to change jobs for other reasons, or simply retire.
Regardless of the reason, you need to know each staff member’s decision as soon as possible, so that you can appropriately plan for your practice’s reopening. And there’s only one right way to do it.
The SBA and Treasury Department recently released detailed rules (FAQ #40) that you need to follow so that those who refuse to return are not held against you for purposes of calculating your practice’s PPP loan forgiveness. Under Section 1105(d)(2) of the CARES Act, your PPP loan forgiveness amount is reduced if your number of FTE staff is otherwise reduced below pre-pandemic levels.
Below is a sample notice that should be provided to each staff member in writing (by email or regular mail), as soon as possible, in order to comply with the new rules:
“I hope that you and your family have been safe and healthy during this pandemic. I have missed seeing you and look forward to reopening the practice soon.
In that regard, I wanted to advise you that I will be reopening our practice on (date and time). I am offering to rehire you at the same salary and wage, and for the same number of hours, as on the date that we closed for the pandemic.
Please let me know in writing on or before ____________ (date) and _________ (time) if you accept my offer of rehiring. If I do not receive your written response by that time, I will assume that you will not be returning. Please be advised that should you not accept this reemployment, you may forfeit eligibility for continued unemployment compensation.
I look forward to welcoming you back as we prepare to reopen our practice to serve our patients.”
For documentation purposes, you should place a copy of this notice, and all responses received, in each employee’s personnel file, as well as your PPP loan forgiveness file.
The McGill Advisory content is provided for informational purposes only and does not constitute legal, accounting, or other professional advice.
Copyright © 2020 John K. McGill & Company, Inc.