The recent worldwide health crisis of COVID-19 has wreaked havoc on businesses and personal livelihoods While relief is available through a variety of government programs, it can be tough to determine which ones you qualify for.
Fortunately, one of the biggest measures to ensure that workers continue to get their pay even during mandated shut-downs is available to a wide variety of businesses. The Payroll Protection Program, or PPP, covers payroll costs for qualifying businesses so that they can continue to keep their employees on staff and provide them with a consistent paycheck until it is safe to report back work. Your staffing liability insurance may also offer some benefits that could be helpful during this difficult time, so talk to your insurance agent so that you fully understand the terms of your policy.
Can Staffing Agencies Apply for PPP Loan?
The good news is that yes, staffing agencies are eligible to receive a PPP loan if they apply to the program. There are some qualifications that you must meet, however, such as the hire date of the employee, the option to re-hire after the business reopens, and the total employee headcount. Most businesses that operate with 500 or fewer employees are eligible for PPP. Larger businesses must meet employee and revenue qualifications set by the SBA.
Once received, the loan is for either payroll, rent, utilities, or mortgage loan interest in order to be eligible for forgiveness.
Do Temporary Employees Count for PPP Loan Forgiveness?
The balance of the PPP loan taken out under the CARES act is essentially a grant that does not need to be repaid under specific circumstances. The bulk of the loan, approximately 60%, must be used for payroll expenses for loan forgiveness to apply. If is it used for other things, then the loan must be repaid with an interest rate of 1%.
In many situations, temporary employees do, in fact, count for PPP loan forgiveness if they were on the payroll prior to the shutdowns put in place due to COVID-19. In most cases, any employee, whether full-time, part-time, or designated as temporary, or something else, will be eligible for the loan forgiveness.
If you are unsure if your business’ temporary employees are including in your eligibility for PPP loan forgiveness, it’s best to speak with a knowledgeable expert who can give you a definitive answer after reviewing your unique circumstances. If you are ever unsure about your staffing-related costs, check with your staffing liability insurance to get further clarification.
The PPP is an excellent tool for businesses to utilize to protect themselves and their workers. Loans are offered on a first-come, first-serve basis. You should apply as soon as possible. The much-needed government assistance is to help small businesses remain solvent and be able to reopen, so take advance of the opportunity and apply for assistance.
About World Wide Specialty Programs
For the last 50 years, World Wide Specialty Programs has dedicated itself to providing the
optimal products and solutions for the staffing industry. As the only insurance firm to be an ASA
commercial liability partner, we are committed to that partnership and committed to using our
knowledge of the industry to provide staffing firms with the best possible coverage. For more
information about Staffing Professional Liability Insurance or any other coverage, we have
available to protect your staffing business, give us a call at (877) 256-0468 to speak with one of
our representatives.