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is reporting 3,744,585 million global cases, 262,709 deaths and 1,238,250 recovered as of 3:32pm on May 6.
In the US we are at over (1.2 million) 1,223,468 confirmed cases, 73,039 deaths and 189,910 recovered.
and New York City both reported decreasing daily incidence for the third consecutive day, the lowest daily value for each since March 18. The percentage of tests performed with positive results continues to decline as well, an encouraging trend in New York.
President Trump said he will now add 2 or 3 people to the Coronavirus Task Force and that they will be focused on reopening the country. He also suggested others might leave the group. Yesterday, as you may remember, I reported that the White House coronavirus task force was being wound down. President Trump had said that as his focus shifted to reopening a different group would be set up, but today he said that the task force will continue indefinitely. At a White House Event today, when asked about the change in direction, Trump stated “I had no idea how popular the task force is until actually yesterday when I started talking about winding it down”.
The next phase of an economic stimulus package is currently being debated. There are indications that a next round may help hard-hit States and local governments, the postal service, and help fund more aggressive contact tracing programs to track the spread of the virus. Lawmakers are divided over spending and how ambitious to be in the upcoming pandemic response.
On May 4, less than a week after
(scheduled to expire May 15), Arizona Governor Doug Ducey issued an
. The newest order permits barber shops and salons to resume operations and restaurants to resume dine-in service. These businesses must
, but they can reopen starting May 8 for barbershops and salons and May 11 for restaurants.
In Utah, local health officials identified
. The outbreaks resulted in 68 total cases, including 48% of employees at one of the businesses. The announcement about these outbreaks follows a recent decision by
to begin relaxing statewide social distancing restrictions after the state transitioned from “high risk” to “moderate risk.”
Overall, Johns Hopkins researchers state that as states begin to relax social distancing measures, it will be critical to monitor trends in COVID-19 in order to quickly identify increased community transmission. We will keep an eye on their updates for you.
Will Lopez is the Head of the Accountant Community at Gusto, the people platform that helps more than 100,000+ small businesses nationwide pay, insure, and offer benefits to their hardworking teams. He's sitting down with us tonight to give his data-driven take on furloughing vs dismissals, what to look for if you're seeking the help of an accountant, and more.
We released a really good report last month that had some month over month percentage increases in terminations and layoffs. And what we saw were the top five industries that took a really big hit when this thing unfolded were food and beverage, salons/spas, sports and recreation, arts and entertainment and retail.
There was a large spike in terminations, everyone was trying to accommodate and adjust their workforce according to coronavirus because they had totally shut down.
30 million unemployed which suggests that the unemployment rate hasn’t been adjusted yet. During the Great Depression, unemployment was at 25%
We are at historic times and we are trying not to hit that historic marker from the Great Depression but we are teetering it.
Initially we saw a lot of terminations
There was a lot of confusion around the CARES Act and businesses struggled to really understand that they didn’t have to lay their employees off, they could furlough them.
What ended up happening was an onslaught of downstream effects that occurred when you terminated someone. So if you had employees using benefits or had benefits or 401k when you terminated an employee you ended up terminating their benefits and then getting them on things like COBRA. So I think they're in the initial stages of things, there was this learning curve of like, oops, let's not terminate, let's furlough.
Right now a lot of companies are furloughing understanding that they're getting access to funding like PPP or EIDL or even local and private stuff in order to hold them at bay, get that money in the door and then get them back on payroll.
If you get the money start using it right away, start paying your team, your bills, all qualified expenses for whichever funding type you received
You have an 8 week period from the time you receive PPP funding to use it in order for it to be forgiven, so you need to be conscientious and start proving these expenses now
If you sit on it and don’t spend it, it's actually going to be a problem because it won’t be forgiven.
You can check out Gusto’s resources on forgiveness here:
Don’t give up on the program and keep your ear on the pulse of that whole program
Continue to press forward, there are other SBA funding sources such as EIDL, SBA Express Loans, to name a few. There are also private relief sources out there such as Zapier’s $1M small business assistance fund and Salesforce grants.
Gusto rolled out a relief tracker on its website free for everyone to see that actually serves up a ton of the state and industry specific relief. And so you can navigate those details totally up to date every single day. We have a team that's on top of it and that gets you all the access to either the private stuff or the state stuff.
If you can't get the PPP, don't, don't hang your head. There's a lot of resources out there from the private side. There's a lot of resources out there from the state side. And I would go for all of it all at the same time. That'll be your best chance of success.
PPP is to protect paychecks
EIDL loans are larger and have longer payback periods. You cannot use the PPP and EIDL for the same purposes
EIDL can be used for payroll costs or increased material costs, rent/mortgage payments, and other obligations you can’t meet because of COVID-19
If you have both though, remember you cannot double pay payroll though
Yes but there is a unique situation here. With the social security tax deferment program, your portion of social security tax that you end up paying for your employees, you can defer it for up to three years. At least half of it is due at the end of next year and then the other half the year after that.
But the moment you find out your PPP loan has been forgiven, then at that point you have to stop the social security deferment But you don't, you don't have to pay back that social security tax. It just falls into that normal cycle. So if you're still looking for more cash and you've received your PPP or whether or not you have received it, go for that social security deferment.
We saw that lower income employees are more likely to be laid off than higher income earners.
We saw that Gen Z and new entrants to the workforce saw huge deep cuts around layoffs and furloughs.
We saw that the jobs in low income areas are the ones that are at most risk.
What our data showed is that hourly employees that were making less than $20 per hour basically experienced a 115% higher rate of layoffs compared to those making $30 or more.
I have been a public accountant during my entire career and joined Gusto to lead their accountant channel about a year ago. Prior to that I owned a public accounting firm in South Florida. What I immediately did was go back to the Great Recession to see what behaviors were done ther and that was between 2008-10 and the trend I saw was companies leaned very heavily on outsourced work. They were going the contractor route in order to try to scale up to a point to then bring them on as full time employees.
But you need to be careful about this. One of the most common errors a small business makes is misclassifying someone as an independent contractor when they should be classified as an employee. So the general rule is that an individual is an independent contractor if you, as the payer, have the right to control or direct only the results of the work, not what will be done and how it will be done. If your people are using your tools or your trucks, but you are classifying them as an independent contractor, then that is automatically a huge red flag.
What we are seeing is a landslide in legislation at the federal level around how you care for your people, your team, and making sure there are federal standards.
The Family’s First Coronavirus Response Act, we aren’t talking about so much now but it changed sick leave to up to 80 hours of paid sick leave at regular pay with a cap of $511 per day if they are experiencing COVID-19 symptoms but haven’t been diagnosed.
There was also an additional 10 weeks of FMLA, family and medical leave, at ⅔ of their regular pay rate if they have to care for a child whose school is closed and childcare is unavailable. There are exceptions for companies with fewer than 50 employees but we haven’t heard much on this since everyone has been at home but as we reopen this conversation will come back.
I'm super passionate about this particular topic not because I'm an accountant, but because I know how impactful working with a consultant or professional is in business life. There are real stats around this where when you work with someone who is a, either a financial advisor or tax preparer, somebody who can really advise your business to go through something like this, you have such a higher chance of success.
I would recommend for you to connect with a consultant now or an accountant right now. I wouldn't wait.
88% of small businesses survive their first five years when they're connected to a pro compared to the industry average of like 41%. So you literally double your chance of just surviving to five years in moments like this, this is the moment where quite honestly a relationship between you, the business owner and you and your accounting professional is so critical because they can get you into other resources that can help mitigate some of that downtrend in revenue.
You need to be working with someone who is really down to earth, practical and is able to communicate really tough things in a very simple way. That just ends up showing somebody who has great communication
I think you should connect with a modern accountant, somebody who's actually able to sort out all the technology for you. Because if there's one thing that Coronavirus has proven to all of us is that you need to pivot on a dime and be able to immediately implement resources and tools to work remotely, to sell remotely, to manage a business remotely, to manage a team remotely.
If they are unable to see that or aren’t able to map out technology solutions and advice that can help you weather stuff like that, that’s not the pro for you. That’s where you need to run in the other direction.
I would find somebody who is on the front lines with all of that because it's going to be your non-equity business partner that needs to handle those things that I know that you may not be capable of handling like, you know, financial moving and business pivoting.
You’re good at what you fo but you may not be goos at rolling out an application for your team to track mobile and you need pros that empower this kind of stuff.
Quickbooks Desktop is not going to future proof your business.
I understand there are limitations with the cloud and I've been in public accounting the past 10 years and on the front lines of the revolution and digital digitization of not only the small business space but the accounting space
I would say QBO all day long because it's going to put you in a position for times like right now. If things go down, you can have team members access things virtually and remotely. It's going to empower you to be in a better spot. You don't have to worry about backing up data. You also don't have that single source data.
The one thing I would want you to do is start making business decisions not in a sequential order, but in tandem with each other. And I think that's been a learning curve of this whole Coronavirus is that we're thinking sequentially about what do I do next, what to do after that. And I think it takes a real decision making ability to say, I need to stop thinking sequentially about making huge business decisions for myself and start thinking in parallel with each other.
And what I'm talking about is thinking of things like going after relief right now and at the same time pivoting your business to make sure that it endures long term and at the same time think about solutions that will put your business in a better spot so that way one month from now or two months from now or what they're projecting at the end of this year, another resurgence of Coronavirus, you need to be making, not sequential decisions but parallel decisions. And I think that's such a huge call out to say, business owner, you need to take this seriously and business owner, you need to not make decisions in order, but together because it works all together.
Questions from the Audience
Gusto does offer health benefits, financial tools, and a lot more around benefits. You can do things like medical, dental, vision, and administration comes free through Gusto. We work with over 3,500 health insurance plans and we have licensed advisors that kind of help you find the right coverage for your teams and for your budget. So we'll work with companies like Blue Cross, Blue Shield, Humana, Kaiser, Oscar, all those kinds of companies. We actually offer a small group coverage for small employers.
Look for small group plan providers, because this will allow you to offer benefits at a scale you can afford.
There has not been much guidance on the extra stuff you can do with PPP so my advice would be to stick to the main purpose of PPP loans, which is to bring your employee back on and pay them, and to also cover those extra items like utilities for your company and mortgage payments.
I would be very careful with this because your lender is ultimately the one granting forgiveness, and I would work closely with them to see what you can and can’t do with that money. There hasn’t been a lot of guidance on this. And ask them to put it in writing whatever they tell you to cover your bases.
There's no such thing as a test run of an employee
Hiring them to do something that an employee would do, they are an employee. You can't call them an independent contractor if they qualify as an employee, they feel like an employee, they're an employee.
Now you could subcontract to someone who's in total control of how the work gets done. And in the case that they are truly independent and then you could decide to hire one of your subcontractors to become an employee and that's slightly different. But in general, just having a test run of an employee, it doesn't work.
People are spending more time online, less time listening to podcasts, so social media is a great place to ask people to share that you are looking to hire. You can offer referral bonuses such as an Amazon gift card for anyone who refers me to my next great hire.
For interviews, start with a phone interview and then move to video. utilize video call tools like Zoom. If you do an in person interview you can do it while practicing social distancing.
There's some really amazing virtual solutions too. Have prospective employees fill out surveys or submit videos. I'm thinking of things like https://www.smartrecruiters.com/. You could easily scale up background checks using things like Checkr.
is an amazing solution that really does background checks that help your business move forward.
You would pay your employees like you'd normally would through payroll.
PPP is just like money that has been given to you, so that way you can run payroll through your normal payroll provider to pay that employee.
Hopefully that payroll provider will do things like what Gusto has done. Be able to track those payroll runs and be able to serve up that data in that forgiveness report.
You don't want to go outside the lines of what you already currently have in place regarding payroll solution. You don't want to launch anything new. You don't want to get yourself into something that's, that's let's say off the books or off the payroll run. So just think of the PPP as a loan or money from your grandma or grandpa or your mom or dad, right? That they're just going to say, Hey, here you go. Use it for paying your payroll money, it hits the bank and then goes through your normal solution to pay your employees.
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Housecall Pro is offering the Coronavirus Evening Update for Home Service Businesses for informational purposes only and to foster thoughtful communication and discussion regarding the COVID-19 pandemic; Housecall Pro is not offering advisory services or otherwise advising or representing any members of the group invited to participate. Housecall Pro is not offering legal, medical or other professional advice in the Coronavirus Evening Update and makes no representations or warranties regarding the content of the Coronavirus Evening Update. Participants should obtain independent advice relating to their businesses and their particular circumstances.