On March 27, 2020, President Trump signed the “Coronavirus Aid, Relief and Economic Security Act,” also known as the CARES Act. Included in this unprecedented economic relief package is the Paycheck Protection Program that provides $350 billion of assistance to small businesses to help them keep their employees on payroll and cover important expenses through a forgivable loan program. Here are some of the highlights:

  • Companies with under 500 employees can obtain loans of up to $10 million, with the size of the loan based on a business’s average monthly payroll for 2.5 months.
  • Any business assigned a NAICS code beginning with 72 – covering hotels, casino hotels, restaurants and bars – with not more than 500 employees per location – also are eligible for this program.
  • The loans can be used to cover payroll, employee benefits, mortgage, rent and utilities.
  • Self-employed individuals and independent contractors can also take advantage of this program.
  • The total amount spent on payroll costs, benefits, mortgage payments, rent and utilities between February 15 and June 30 is forgiven from the loan.
  • The loans are guaranteed 100% by the Small Business Association (SBA)
Paycheck Protection Program

Small businesses may qualify for the “Paycheck Protection Program” provided by the CARES Act. This is a loan that is eligible for full or partial forgiveness with low interest. The purpose of this loan is to cover payroll, rent, utilities, and other business expenses during the COVID-19 crisis. Small business owners can apply for this loan through any federally insured depository institution, federally insured credit union, and Farm Credit System institution that is participating.

Workers Compensation

To address the question of payroll for employees who are being paid but are not working as it relates to the basis of premium: NCCI has submitted their request for approval to change the reporting of payroll. If approved, this payroll will not be used in calculation of an employer’s worker compensation insurance premium. The change will have a backdated effective date and is expected to be in relation to the beginning of the federal state of emergency.