Unemployment and the PPP

Today, we're going to be diving into the interactions between Unemployment and the Paycheck Protection Program or the CARES Act. We're going to talk a little bit more about that in just a second. But before we go too deep, please subscribe to our podcast. You can find us on iTunes, Google podcast, Spotify, Stitcher, pretty much any podcatcher of your choice. You can also subscribe at peopleprocesses.com which will give you access to subscriber-only content, lots of links on these pages, supporting documents, checklists and special discounts on things like our in-depth deep dive into the termination process, including 30 and 32 part lesson, state-specific information, all the forms you need. If you wind up going down the route of layoffs or terminations could be super helpful for you. For that, we have a 50% coupon code for subscribers to bring that price down a ton. Now let's dive in. The CARES Act has had far-reaching implications for our clients and listeners. I, personally, have tried to stay out of advising people on the CARES ACT loans. My company People Processes in the HR world and the Paycheck Protection Program, which is part of the CARES Act, are the BANK's jobs to administer, and they've had a heck of time presenting even marginally standardized processes or advice over these first two weeks of the PPP. But the dust is settled now, I'm not going to be going into the ins and outs of how the PPP to warrant loan works. If you don't already know you've missed the boat. Funds ran out last week. So this is more about our decision making now for that 20 % or so of companies that have gotten a PPP loan. So our current question has been coming up. I've been getting emails about, for those of you who have applied for the PPP, and actually gotten funds or at least an SBA guarantee, and you're waiting on deposit, CONGRATULATIONS! I mean, you're in a small minority of businesses and I really do think it can be very helpful to you. However, it seems some of those people didn't quite read the fine print on those loans. The PPP loans are forgivable, but ONLY if you :>Spend 75% of the money in the eight weeks following the loan on the payroll. >And you have to keep 75% of your headcount that you applied with on your loan, which is really last year's average headcount 2019. >And then you have to actually spend the other 25% on qualified expenses. So if you get a pile of money from them and you don't spend it over the next eight weeks on payroll, rent, mortgage interest, those sorts of things. You're going to have a problem. Let's say you have a business like a restaurant. A month ago you laid off the vast majority of your staff. Now you receive the PAYCHECK PROTECTION PROGRAM that's what it's called money. But you have no staff to pay, no work to do. How do you get the loan forgiven? Well, the short answer is you don't. I mean, I hate to say it, but the loan is forgivable only when you have payroll to support it. If you are a hair cutting salon and under a mandatory shelter in place order, having employees come in to cut hair is "not an essential service." If you receive the