These are uncertain times, and many small business owners have questions about how the Relief Bill could help them and their employees financially. Bryant Consultants, a dental practice coaching agency, wants to help by answering questions related to the Relief Bill. Not all practices are in the same position, so we recommend reaching out to us if you have questions regarding your specific circumstances.
I can’t afford to pay my staff, what should I do?
This is certainly an emotional decision that will directly impact the finances of both you and your employees. However, you are a business owner, and at the end of the day, you must make these decisions to protect your business because your employees will need a place to come back to after the dust settles. If you have to temporarily lay off your employees, it immediately frees up cash to ensure you can pay for your fixed expenses. There also is the option of taking out a small business loan that later converts to a grant, as long as you use the money to support payroll, mortgage or rent, or utility payments within the first eight weeks of receiving the funds. You can check out our previous blog about the CARES Act and how you might benefit from the government’s small business loans.
What happens if employees work after being laid off?
You must pay your employees for their time, even if it’s for attending a virtual meeting. They are required by law to report their earnings to the unemployment office. Keep in mind that you do not necessarily have to pay your employees their regular hourly wages or salary if their duties have changed. For example, if you have a dental hygienist that normally makes $35 an hour when seeing patients for hygiene appointments (which brings in a significant amount of revenue for your practice), yet the employee is attending virtual meetings, or doing paperwork a few hours a week, you could pay them a different capacity work rate. There are a lot of ins and outs to paying employees these varying rates. Bryant Consultants recommends contacting our dental practice coach to advise on this topic.
What happens to pension plans or 401k contributions?
Your employees’ can retain their plans throughout their layoffs. But, you may recommend that they reduce their contributions to $0, especially if they are receiving a different capacity work rate for limited hours. They may prefer to pocket as much cash as they can right now. They could catch up on contributions later. Upon returning to work full-time, your employees may resume their elections to their pension plans. We also advise that you check with your pension plan administrator for any specifics that may apply to you and your practice.
What do I do about exempt employees?
If you have any exempt employees in your practice, they also are eligible for unemployment benefits. If you plan on having your exempt employee work at all during their layoff, remember to convert their status to a non-exempt employee so that you can pay them for their hours worked. Remember, the different capacity pay rate applies here too.
How should I handle PTO or accrued vacation/sick time?
If your employees accrue paid time off or vacation days prior to their layoff, then they have the option to request payment for any accrued days. The employee should note that by requesting a lump sum payment of these days, it will delay their unemployment benefits, and they will not have PTO hours accrued when their employment is reinstated.
How should I handle insurance premiums?
Each insurance plan varies, so the best recommendation is to contact your plan administrator for specific questions or details regarding your practice. Usually, once employment ceases, the employee is responsible for the entire cost of their premium, unless your plan has provisions that allow for up to a 90 day grace period. If your practice has more than 20 employees, there is the option of COBRA coverage.
What happens to my associate doctors?
This will depend on whether your associate doctors are employees or independent contractors. Associate employees are allowed to file for unemployment under your practice’s benefits. If your associate doctors are independent contractors, then they are not able to file for unemployment benefits under your practice, but the CARES Act provides some relief for self-employed individuals. Since associate doctors usually are considered exempt, they also will need to be converted to non-exempt, so that you can pay an hourly wage for any work that they do while being laid off. Any employee that is laid off, but works even a little, must file their earnings with the unemployment office.
How can I advise my employees on filing for unemployment?
The law allows any employee, even owner doctors that have been laid off to file for unemployment benefits. Each state has specific requirements on how this process works. For unemployment information, your employees should contact their state’s Department of Labor. But, Bryant Consultants is available if you are unsure of the process or need guidance.
What tax credit incentives are available, and how do they work?
If you are obligated to pay benefits according to the HR 6201, then your practice is eligible for a tax credit. The credit will vary depending on how much you paid out in benefits. If you are eligible, you will be able to retain an amount of payroll taxes that are the equivalent to the amount of leave that was paid instead of making payments to the IRS. If, however, the amount paid is more than payroll taxes, you can send a written request to the IRS for an expedited payment to cover the difference.
If you aren’t sure how to get your practice through the coronavirus pandemic, Bryant Consultants can help. We also have developed a coronavirus dental practice survival kit, which is available as a free download. If you would like more information, please call Bryant Consultants at (877) 768-4799 or connect with us directly. We provide consultation, training, and coaching and will continue to post relevant updates regarding the coronavirus pandemic. To ensure that you receive the latest updates, please follow us on Facebook and Instagram.
