EntreLeadership - What Employers Need to Know About H.R. 6201

Episode Date: March 27, 2020

Tune in to hear Daniel Tardy and Armando Lopez respond to some business owners' fears around Coronavirus.   Read the whole blog post: What Employers Need to Know About H.R. 6201 Check out the Families First Coronavirus Response Act in its entirety here.   Get access to the EntreLeadership Weekly Report Tool, FREE, for you and your team for 3 months: Text TEAMHEALTH to 33444   Follow us on social media to stay plugged in to everything we’re doing to help the small business owner win: LinkedIn Instagram Facebook Twitter YouTube Learn more about your ad choices. Visit megaphone.fm/adchoices

Hey, this is Alex. I think one of the things that we're all realizing right now is that this whole coronavirus situation, it's developing so fast, like every single day, if not every single hour. And so we want to make sure we're doing our part to give you the most up-to-date information about how our company is handling this, but also how we see small business owners around the country leading through these uncertain times. So we're going to be releasing some bonus episodes where senior leaders, here within Entree Leadership and Ramsey Solutions address some of the big topics and big questions surrounding the whole coronavirus issue. Make sure you subscribe to the Entree Leadership podcast to get these bonus episodes at the top of your feed. And here is today's bonus episode. Hey guys, Daniel Tarty with the Entree leadership team here at Ramsey Solutions. And I'm joined by Armando Lopez. Armando is our executive director of HR here at Ramsey Solutions. And he's good buddy and I wanted to bring him in and Armando, man, what crazy times right now in the world of HR. Yeah. I don't think we've seen anything like this one. Certainly in my career. Man, so I was

going to say in my lifetime, but that's probably true as well. Lifetime and career. There's some overlap there, I imagine. So you guys know as business owners, um, uh, one of the biggest expenses that every business has is their payroll. And Adontre leadership, uh, at Andre leadership, we teach that your biggest asset that you have is your team. And so we're always talking about how to build a team and how to grow a team and how to hire. But right now we're just getting a lot of questions from you guys about if you need to exercise the option of downsizing your team to kind of make it through the storm. And man, that can feel really scary.

And we know that. And I'm sorry that that's so tough for so many of you guys right now. It sucks. It is not a fun thing to be facing. but face it with the data. Face it with some good information. We want you to make objective informed decisions, and that's why I brought in Armando to answer some of the legalese

and things floating around, especially about the bill that came out last week, the HR 6201. There's some implications in that for small business owners. So essentially, Armando, my understanding is there's some exemptions for business owners if they choose to lay off their team. Yep. Absolutely.

So I think you, Sarah, I've already talked about putting people first, and you've already talked about the care and concern that we as a company take with our team members. Yes. And so I don't need to go back through that, but what makes these conversations, these decisions hard, is that there are people involved on the other end. That's right. So while the bill does address some of the financial concerns, it's still a hard conversation with that team member. And so HR 6201 passed last week on Wednesday, it only applies to small businesses. So these are businesses with 500 or less. Okay, 500 or less? Team members. Okay. So if you're under 500, then you qualify under this

build to participate. A couple of special provisions for companies with less than 50. So less than 50 have a couple of nuances that are a little bit differently. But really what HR 6201 says is that if you have less than 500 team members and you've got to lay people off or give them time because they're sick or they think they're sick because they have a family member impacted by the coronavirus, that you have 14 days that you can take as a payroll tax credit. And now the question always comes up. What if my payroll tax is not enough? So I don't have enough that I could take a credit. Right now what the government is saying is that they will actually issue you a check for the surplus. So you will get money back for that. And is that when they file next year or is that immediate? No, that's immediate

when they go pay their payroll taxes. So for most of our entrepreneurs that are online right now, there would be a quarterly payment. Quarterly. Yep. Okay. So there's different options when you're thinking about, you know, I think a lot of business owners right now are just trying to even calculate the pros and cons of layoffs, furlough, keeping people on without as much pay or partial hours and things like that. Can you just talk us through, like, kind of what are the pros and cons of, if I'm saying layoff versus furlough, for example?

Yeah, so layoff is there's not enough work for the business and you truly take them off payroll almost completely. If you reinstate them, then they get their vacation time. In other words, you bridge that gap of employment so as if it never happened. A furlough is I keep you on benefits. Okay. And now if I'm a company that offers benefits, and we are, then we would pay our employer portion of those benefits still.

Okay. And we could even opt to pay the full amount. So furlough, if you did that option, you're thinking, okay, this is really tough right now. We don't have enough work. But in two months, we will. We believe we will. And so we're not letting you go. You're actually still a team member, and we're just not able to pay you your paycheck right now,

but you still get to, you're not severing benefits and having to go do COBRA or things like that. We're helping you get through it at least with a benefit part of your package. You want to keep you on those benefits. Yeah. I don't know how many of our entrepreneurs out there have hourly team members. And so if you've got hourly team members and you just don't have enough hours for them, it's hard for them to go right now and file for unemployment if you haven't separated them. So if you have said, hey, all I'm doing is I don't have enough hours to give you.

of them. And so they're not really terminated, but they're not really getting any hours. And so they don't have any money coming in. For some of those cases, you might be better off going a furlough or a complete severance, where you just sever the relationship. But to be clear, if they're doing a furlough, they're not eligible for unemployment under a furlough arrangement? In some states, they are. Okay. So some states have allowed that to qualify for an unemployment. Okay, so check with your local state on that. When would it make sense to activate doing a pay cut? Maybe we've got half the work that we had, and we want everybody to scale back. And it's a weird conversation, but it's kind of like, hey, do you want to work for half of what you've been working for to do maybe more work right now, actually? Because it's not necessarily the amount of work, but it's the amount of revenue coming in. And if we're having to make cuts as a team to get through it, how do you kind of navigate that?

So, you know, it's funny. Dana, you know this, but I'm in all these safe. HR publications, and like most of you, I'm sourcing and reading and talking to people that are in HR that have been friends for a long time. And a lot of states have a requirement, if you're going to drop someone's pay, you have to give them notice. And those notices range from seven days to 30 days. And so there's not enough time right now to do some of those things. Some companies are wanting to make this. Voluntary. And there are some states that kind of lifting some of those restrictions, but it is so specific for that state. And our HR publications are warning against acting too quickly. Okay. Against doing some of these things now,

even though you have a team member that says, I'm willing to work for 50% less, if there's nothing documented, if there's nothing that says they're volunteering for this, you've dropped someone's pay without any notice given to that. Right. So there could be recourse later if you didn't have that documentation. So if the team is, is, truly a team and they're going, hey, leader, whatever it takes, if we need to work for 50% to get through this, we're with you, we got your back. I would say, get that documented and have them write up and sign, I'm choosing to do this, and that way it's not something to bite you later. It might prevent something in the future. Okay. We have such great people out there, and you have

such great employees out there, some great team members that are saying, hey, rather than have anyone get laid off, I'd rather take less money. And it is not unprecedented. At these kind of economic troubles have happened before, and companies have survived them by the team rallying and saying, I'm willing to take a 20% pay code, or I'm willing to take no vacation or burn up vacation now early, so that for companies that are accruing vacation, that money's already accrued so they can pay out of that vacation fund and not have to incur that cost today. How do I have that conversation? Now, of course, we talked about you treat everybody the way you want to be treated. That's the golden rule is the guiding principle for almost every

leadership communication. How would you want to be treated? This is about to be what might be one of the worst days of their life when they get this news. So consider that, be very kind. Be their friend, not the boss, be the compassionate leader who's going to come alongside and go, we're up against this situation. It kills me to do this. This is where we are. But I know I have a tendency in that moment to want to make it better or rescue or promise them like, but hey, in a month from now, we're going to be able to, but I can get in trouble if I start to go down that path. Yeah, because we don't know what's going to happen a month from now. I'll tell you, last week was probably one of the hardest weeks I've had in my professional

career. And what made it hard was obviously this coronavirus, but it's these conversations that Daniel's talking about. It's people that walk into my office that are scared, that's. have anxiety that are so emotional that for those people, I did not begin with logic, right? They're not going to listen to logic. And so if I had just started with, here's what the numbers actually say, and let me show you this website, and let me show you some reality, they're not listening.

They're not listening, and rightfully so. Because they're scared and they're hurting. So we need to address the fact that they're scared, the fact that they're hurting, the fact that we're scared, the fact that we're hurting for ourselves and for them. And so it's going down that emotional road with them before we would even get to the facts, before we even get to what we know. Andy Stanley does a great talk where he talks about dealing with uncertainty. And there's a lot we don't know. Sure. But there are some things we do know. That's right. So we do know a lot of things. And so it's focusing on those things, emphasizing the things,

that we do now and letting them know that we, this isn't the first time that the world has faced things like this and we've overcome. Yeah, that's right. And we will overcome this. Yes. And we will get on the other end of this. And they will too. Yes.

And so how do we do this together and how do we get to the right decisions today? One of the last conversations I had today before walking down here was with someone that was talking about how people were acting at the grocery store and the things they, they had just faced and how they were trying to prevent themselves from doing the same things. But it's funny, you never want that extra roll of toilet paper until there's only one left. And now you're fighting for it. And one of the things that we arrived at in that conversation was, we want to behave in a way that when this is over, we can look back at how we behaved and be proud of the way we behave, be proud of the things that we did, and not look at our cabinet and go,

why do I have 28 bottles of ketchup? That's right. And why did I do this? Well, it's a good reminder. You know, the truth is, more than likely, 99.8% chance you're going to be here in six to 12 months from now. Now, your team members may not be. Your business may not be.

That'd be terrible. Hopefully it's all still here. We don't know. But you're going to be here. And so go out in 12 months and go, what will I want to say that I was proud of how I navigated these turbulent waters. I can look back without shame and regret and go, it wasn't easy. We had a high price to pay to get through it, but at least I kept myself grounded to my values throughout kind of all those conversations, right? The balance between we have to put people first, but a way of putting people first is protecting the business so they have a place that they can go to, that they can earn money and continue to survive.

I would say for those of you that are sitting out there scared, you're not alone. For those of you that are sitting out there with a lot of confusion and not sure exactly what the right thing to do, you're not alone there either. But the things that we do know is that if you talk to your team members, together you can arrive at the right decision for them, whether that be, hey, I need to terminate you so you can go collect unemployment. And while that sounds really lousy, let's put in writing that if you come back in 60, 90 days, whatever, it is, but remember that once you do it for one, you do it for all. So if you say, Daniel, we're going to go ahead and terminate you so you can collect unemployment and put food on the table for your family. If you return within 90 days, I'll bridge that gap in employment, because I know this has nothing to do with you. So I will bridge it. I'll make sure. And once

you do it for you, then I'll do it for all of them. For everybody, yeah. To make sure it's fair. So that means Dave can't lay off everybody, rehire them except for Daniel Tarty. That's really encouraging because I'm a little worried about that. Yeah, that's what I heard. Okay. Well, guys, listen, we know it's tough out there. We know these are emotional and heavy conversations, but to Armando's point, we want you to know you're not alone. We're with you. We're cheering for you.

And as we continue to get more information on the HR front, on these developments, we'll get it out to you guys. And if you have questions, continue to send that into our coaching team. And we'll do our best this week to continue to get you guys answers because we believe in you. We believe in the entrepreneur spirit that this country was built on. And we believe we will get through all of this stuff together very soon. So keep fighting. Keep going. We're here for you.