An alternative to laying off workers
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Paycheck Protection Program money has run out for the vast majority of small businesses and 33% of owners surveyed who received funds are beginning to lay off workers, according to a Goldman Sachs survey.
But layoffs are not the only option for business owners who need to cut costs. Under a work sharing program, employers can reduce their workers’ hours and the employee can get the remaining hours prorated through filing for unemployment. When business picks up, the employees’ hours can be reinstated and businesses don’t have to go through the process of recruiting and training staff. Critically, workers would continue to keep their health insurance through the program.
Under the $2.2 trillion stimulus package passed in March, the federal government agreed to pay for state’s costs from work sharing programs through the end of the year. However, not every state has a work sharing program put into place so you’ll need to check with your local officials to see what’s possible.
Latest Developments
- Restaurants in New York City are getting a bit of respite from the pandemic and can reopen their indoor dining at 25% capacity starting on Sept. 30.
- That doesn’t necessarily mean eateries should expect large crowds. Americans are increasingly staying home even as businesses and state economies open back up.
- It’s not just Americans looking to relocate to quieter areas. Canadians, too, are on the move to smaller towns.
- The Justice Department has filed charges against 57 people for trying to steal more than $175 million in Paycheck Protection Program loans.
- Large companies are not deferring their employees’ payroll taxes.
- Fintech company Kabbage is the country’s second largest PPP lender but a Miami Herald investigation reveals they lent money to companies that don’t exist.
- If you want to know how critical the United States Postal Service is to rural communities and the small businesses that populate them, look no further than Peanut, Calif., which got its name from a postmaster.
Conversations For You
- Steve Vamos, CEO of global accounting firm Xero, gave advice to owners on how to survive and thrive in a global economy.
- The oil and gas industry is headed for a season of tough mergers and acquisitions as small producers are forced to sell to larger conglomerates as the pandemic continues to accelerate a six-year downturn. Producers and industry leaders share what the future holds and what this means for the small businesses.
- Restaurant and bar owners in New York discuss what the state’s reopening policies mean for them and how they’ve fared the past six months.
Resources
- American Express is giving grants of up to $5,000 to Black-owned businesses as part of its Coalition to Back Black Businesses program.
- Bedford, Ind. businesses can apply for grants if they have 100 or fewer employees. Applications are due Oct. 2.
- Firms in Washington state’s Greater Grays Harbor are eligible for grants of up to $10,000 if they apply by Sept. 23.
- The University of Southern Mississippi has online classes and workshops for small business owners.
Something Good
- I think it’s safe to say that this turtle speaks for us all when asked how we feel about 2020. Be sure to check out the rest of the finalists in this year’s Comedy Wildlife Photography Awards. The giraffes are my favorite. What’s yours?
Director LNG Startup Operations | CSU & Operations Assurance.
4 年An alternative to Laying workers off, which is very simple to do, gather as many of the workers as possible in a big room (virtual is okay these days of course), and ask the question, would you rather be laid off, or have a 30 to 40% temporary pay cut? You can be certain that at least 85 to 90% of the workers would take the second choice, the others can absolutely go find better pastures for themselves. High-Paid executives can also contribute to the company by requesting temporary pay cuts, bonuses suspension for the year, and in very unique cases, some really high-paid execs can go without receiving compensation for months. This is all about Leadership & the team making sacrifices for a collective benefit. Tough Decisions Require Tough People, and we are all in this together!
CTO at VAL Engineering Sciences Inc
4 年One of the companies I used to work for had a modified version of this that offered called "flex hours" -- This allowed mothers with young children the opportunity to come in later in the shift and work their normal amount of hours as long as they partnered up with another worker with similar skill sets and training to work the hours she wasn't able to be present (we were doing 24X7 rotating shifts at that time). All of this was tracked by the HR dept. for pay accounting and of course the line supervisor had to agree for liability and task completion purposes but for the majority of the workers that participated it was a company benefit that meant a lot more than an incremental hourly bump at the end of the year. And it cost the company $0 to execute past the initial setting up of the original "rules sets" and procedures.
Ive kept the employees. But we had to decide to cut cost and cut in hours of work after when we open and back to dine in and cut in some pay after 3 months.. If they decide to leave after trying to stay open after 6, its their choice..
Retired, RCDD/NTS
4 年It’s about time in fact I used that little known law against CA years ago after reading their entire rules in their EDD handbook in CA. I would work my employees half day and I got EDD to pick up the other 4 hours. EDD figured it was the best way to keep employees working and staying at the same company and keep their medical. The last time I called them about this they had killed it and told me they no longer offered this option. Good luck getting CA to even give it a second thought. Back in the day day I used it for my inside people which meant I worked 16 or more hours a day, which was a typical day, but I had to get 4x’s done in the same hours. CA killed that rule and decided it was up to the employer to take on the burden. It was stupid upon their part because they lost more of their tax base year after year with not allowing this and all the employer mandates that I had to pay but wrote off as an expense. CA never look a day ahead to see what they were killing or how it was going to affect tax collection in the future. I landed some large jobs and we were back to normal with in a couple of months using this half/half rule. CA let 30% taxable nets go to taxable single nets. Econ 101 covers all these mistakes.
Retired IT-Constitutional Libertarian-God & Family *Shepherds-eat-sheep*
4 年Interesting, useful and many advantages but the time frame is fairly short, 26 weeks. Politicians just have to give up their iron control and let businesses open.