CDC Guidelines for COVID19 Workplace Safety as Businesses Re-Open

Businesses grapple with safety issues while cautiously reopening.
Businesses grapple with safety issues while cautiously re-opening.

Communities are starting to ease their COVID19 restrictions, which means many businesses will be re-opening under new guidelines. While this is welcome news for many business owners, questions remain about workplace safety. The Centers for Disease Control and Prevention (CDC) has an updated reference site for businesses with a guide to ongoing mitigation and resources for COVID19 prevention and support.

The site offers a special section for Frequently Asked Questions on the following topics: Suspected or Confirmed Cases of COVID-19 in the Workplace, Reducing the Spread of COVID-19 in Workplaces, Healthy Business Operations, Cleaning and Disinfection in the Workplace, and Critical Infrastructure.

The Department of Labor also has a thorough safety guide compiled under the Occupational Safety and Health Act (OSHA) available for download. This 35-page document is not a standard or regulation, and it creates no new legal obligations. It does contain recommendations as well as descriptions of mandatory safety and health standards. Download the OSHA guide at https://www.osha.gov/Publications/OSHA3990.pdf

For more information on CDC guidance on other COVID19 issues that may affect you see https://www.galliganmanning.com/covid19-update-cdc-recommends-care-plans-for-both-older-adults-and-caregivers/.

Resources: Centers for Disease Control and Prevention, Businesses and Workplaces: Plan, Prepare and Respond, updated April 20, 2020.

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Qualifying for Paycheck Protection Program Loan Forgiveness

Steps to take for PPP Loan forgiveness
Steps to take for PPP Loan forgiveness

This is important news for those who received a loan through the Small Business Administration’s Paycheck Protection Program (PPP). You may recall that the PPP was part of the $2.2 trillion CARES Act stimulus package. The purpose of the loan is to help small businesses impacted by coronavirus.  One of the most valuable aspects of this program is that these small business loans can be converted to grants and be fully forgiven if used to keep employees on the payroll.

While there is still confusion around exactly what steps business owners must take to qualify for forgiveness, Forbes recently suggested loan recipients take the following three steps now.

1: Use all of the funds you receive to pay your employees. Be aware that is mathematically impossible to get the full 100% forgiveness simply by paying the same wages that your PPP application was based on. This is because the loans were calculated at 2-1/2 times your monthly payroll, and you will have only eight weeks (from the day you received funding) to disburse the loan funds.

What to do? You can use the rest of the funds on permissible expenses (business rents, mortgage interest, and utilities, with some restrictions). But it appears the safest thing to do (“safe” meaning likelihood of achieving full loan forgiveness) will be to increase your payroll, either the amount per employee or the number of employees you have on payroll, or by paying bonuses, etc.

2: But beware – any amount paid to a single employee (including yourself) over an annualized $100,000/year will not count towards forgiveness.

3: Start these payments from the very date you receive the money, or as close to that as possible, and make sure all your pay periods fall within the 8-week window. This is a tricky little point; forgiveness appears to be calculated on a cash basis, in which case, accrued payroll with a pay date after the 8-week period won’t count.

Finally, remember that managing your business through these difficult times is a balancing act. In other words, don’t put your business in danger just to be sure your loan is fully forgiven. The last thing you want to do right now is sabotage the long-term health of your business. Even if your loan is not 100 percent forgiven, the remainder will convert to a one percent loan.

The best advice? Invest your time now on business strategy, forecast different scenarios, and have a plan to grow out of these challenging times.

Learn more about other coronavirus issues that may affect you at https://www.galliganmanning.com/update-coronavirus-and-irs-deadlines-filing-extended-to-july-15/

Resources: Forbes, For Up To 100% PPP Loan Forgiveness, Take These 3 Steps The Very Moment You Get Your Loan, April 23, 2020; US Chamber of Commerce, CORONAVIRUS EMERGENCY LOANS Small Business Guide and Checklist, updated April 23, 2020

 

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Business Succession Planning in your Estate Plan

Business succession planning is critical in your estate plan to ensure your business succeeds when you’re gone and to preserve value for your beneficiaries.

When people think about estate planning, many just think about their personal property and their children’s future. If you have a successful business, you may want to think about how it will continue after you retire or pass away.  Business succession planning is critical because the value and success of the business will be greatly effected when you pass away.  Planning now will help prevent interruptions to the business and preserve the value for your beneficiaries, and for your employees.

Forbes’ recent article entitled “Why Business Owners Should Think About Estate Planning Sooner Than Later” says that many business owners believe that business succession planning, estate planning and getting their affairs in order happens when they’re older. While that’s true for the most part, it’s only because that’s the stage of life when many people begin pondering their mortality and worrying about what will happen next or what will happen when they’re gone. The day-to-day concerns and running of a business is also more than enough to worry about, let alone adding one’s mortality to the worry list at the earlier stages in your life.  Having been a business owner myself, I understand that the demands of the day seem so important, it’s hard to think about next week, let alone when you’re gone.

Business continuity is the biggest concern for entrepreneurs and one of the key components to address in business succession planning. This can be a touchy subject, both personally and professionally, so it’s better to have this addressed while you’re in charge.  One option is to create a living trust and will to put in place parameters that a trustee can carry out. With these names and decisions in place, you’ll avoid a lot of stress and conflict for those you leave behind.  You may do this as a trust solely for the business, such as a management trust, or as part of your regular estate planning.

They may be upset with you, but it’s better than the other or future owners and key employees being mad at each other.  This will give them a higher probability of working things out amicably at your death. The smart move is to create a business succession plan that names successor trustees to be in charge of operating the business, if you become incapacitated or die.

Business succession planning may include several other aspects.  For example, many owners complete buy sell agreements or similar documents that require a deceased owners estate to sell their interest to the other owners, or address what happens if an owner divorces, or becomes disabled.  Some even address buy outs for retiring owners.  It is also a good idea to consider employment agreements that entice key employees to stay with the company if you should retire or pass away.  These documents can be complex as they touch many issues, but are worth discussing with your estate planning or business attorney as part of your business succession plan.

A power of attorney document will nominate a fiduciary agent to act on your behalf, if you become incapacitated, but you should also ask your estate planning attorney about creating a trust to provide for the seamless transition of your business at your death to your successor trustees. The transfer of the company to your trust will avoid the hassle of probate and will ensure that your business assets are passed on to your chosen beneficiaries. Timely planning will also preserve your business assets, as advanced tax planning strategies might be implemented to establish specific trusts to minimize the estate tax.  See here for more details.  https://www.galliganmanning.com/how-do-trusts-work-in-your-estate-plan/

Business succession planning and estate planning may not be on tomorrow’s to do list for young entrepreneurs and business owners. Nonetheless, it’s vital to plan for all that life may bring, and is critical to prevent disruptions to the business you created.

Reference: Forbes (Dec. 30, 2019) “Why Business Owners Should Think About Estate Planning Sooner Than Later”

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