As the global pandemic approaches the one-year mark, there is no question that it has had a major impact on business owners all over the United States. It has even forced some businesses to close their doors altogether.
Due to restrictions centered around gatherings, in-person visits have diminished, opening up the way for online commerce instead.
Many business owners have been forced to lay off employees because the volume of business they once enjoyed has declined, and they can no longer justify having those workers on hand.
Here are some of the other significant impacts that unemployment is having on business owners as a result of the COVID-19 pandemic.
How Pandemic Unemployment Impacts Business Owners
When business begins to taper off, as it has for many owners due to COVID-19, it becomes a necessity to let some employees go.
There’s not really any action required on your part aside from responding to the claim that will be made to your state for extended benefits.
The money that you are required to pay for unemployment taxes then becomes the source used by the state to provide unemployment benefits to those individuals filing claims.
In the event new layoffs result in an unemployment claim, the state will contact you to verify the details of employment. When a former employee files for unemployment benefits, you are required to respond to their claim notice, but you also have the option of contesting it.
Employees who are fired for just cause are typically not eligible for regular unemployment benefits, since the program was set up to assist workers who were laid off through no fault of their own or are unable to work due to reasons outside of their control.
Anyone who is terminated for violation of company policy, poor performance, or for any kind of misconduct will most likely not qualify for regular benefits.
In this scenario, you need to provide evidence that the employee violated company policy or provide some proof of misconduct on their part.
Once this is done, the state will make a determination on whether or not the employee should receive benefits.
Employees, however, have experienced a significant windfall, as they are now receiving an extra $600 per week on top of the standard weekly benefit amount that normally would have been awarded to them.
Recommended Read: Know When and How to Protest Unemployment Claims
The CARES Act
Prior to the passage of the CARES Act (Coronavirus Aid, Relief, and Economic Security), it was not possible for business owners to collect unemployment for themselves if they fell into any of the following camps.
- They were self-employed
- They were a gig worker
- They were an independent contractor
That was changed when the Act when into effect, and the business owners that were hit the hardest finally became eligible for regular unemployment benefits.
For owners who were prevented from earning a living during the COVID-19 pandemic, at least some relief was made available.
The only individuals not eligible for relief from this stimulus package are those who are still able to work from home or those who closed their doors for reasons other than the coronavirus.
Most self-employed individuals who were put out of business by the pandemic were able to obtain relief through the CARES Act.
Resources Available to Business Owners
Many businesses and business owners have found themselves struggling with the implementation of government restrictions and social distancing requirements brought on as a result of the COVID-19 pandemic.
This has given rise to a number of resources that are intended to lessen the impact of coronavirus and to help business owners recover from it.
Pandemic Unemployment Assistance
One of the latest programs to be put into effect is called the Pandemic Unemployment Assistance (PUA) program, and it went into effect during the latter part of 2020.
Under this program, individuals who were previously not eligible for regular unemployment benefits are able to qualify for PUA are finally able to receive the payments that others have already been awarded.
Recipients will be entitled to as many as 39 weeks of benefits, and they can receive PUA payments retroactively, dating back to January of 2020.
This program is similar to unemployment in that it’s administered by individual states, so claimants are obliged to submit their PUA applications through their state channels.
In addition to the PUA program, business owners received economic impact payments in 2020 which that intended to help taxpayers survive the hardships imposed by the coronavirus.
Single taxpayers received $1,200, couples received $2,400, and couples were paid $500 for each dependent child in their custody.
Families First Coronovirus Response Act
A measure called the Families First Coronavirus Response Act was also enacted to reimburse business owners that employed fewer than 500 employees.
Its intent was to ensure that workers would not have to choose between staying employed and complying with safe behaviors during coronavirus.
It also reimbursed the businesses where these employees worked to relieve some of the pressure off them as well.
The Small Business Association Loan Program
Other guidelines were issued by the federal government with regard to programs already in place. For instance, the Small Business Association (SBA) loan program.
The Economic Injury Disaster Loan was made available to businesses that have suffered serious economic damage as a result of a federally declared disaster.
The SBA also initiated the Paycheck Protection Program (PPP) last year which was intended to help businesses keep their employees working and avoid laying them off.
By forgiving loans, it sought to help employers keep workers on their payroll since it would relieve the pressure of having to make loan payments, thus freeing up capital that could be used for payroll.
Applying for assistance through the PPP was made simple, and it could be carried out through any SBA 7(a) outlet where applications were normally submitted, as well as any federal credit union.
Another resource available to business owners during the time of the pandemic is the SBA’s Local Assistance Directory, which provides locations of local offices where assistance may be obtained.
The federal government is aware of the stress that the pandemic has placed on the shoulders of small business owners and has reacted as quickly as possible to provide help in many different forms.
It is worth your while to make use of the loans and programs described above and to educate yourself about as many other possibilities as possible. Surviving the pandemic as a business owner will prove to be difficult, but you won’t have to do it all on your own.
Need Help Managing Your Unemployment Claims?
Have you been hit hard by unemployment claims during the COVID-19 pandemic?
Despite the fact that you have probably had justified cause for laying off or firing your employees, you may still be getting hammered by unemployment claims, especially if you are a mid to large-sized business.
Trying to handle all of these unemployment claims and respond to them within the allotted time can put an enormous amount of stress on your HR department.
Unemployment Tracker can help you manage your unemployment claims, relieve some of the burdens off your shoulders, and help you contest any claims that you believe were filed without proper justification.
The COVID-19 pandemic has already proved to be a difficult time, so let us help relieve the burden of unemployment claims off your shoulders.