EMPLOYER UPDATES - COVID-19 resources and news

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More and more Colorado workers filing for unemployment

Is this the unemployment rate? No. The official unemployment rate, reported monthly, comes from a sample of 60,000 U.S. households conducted in the beginning of the month. Survey respondents are asked if they are able and available to go to work and if they have actively searched for work during the last four weeks. Those who answer “yes” to those questions comprise the numerator for the unemployment rate. As you can guess, there are many people who might answer “yes” when asked those questions who are not getting unemployment insurance, and also many people who answer “no” who are still unemployed.

That nationwide rate is extrapolated to state unemployment rates, and further, to county unemployment rates. County-level rate reporting typically lags about a month behind the state. Colorado’s official unemployment rate for March 2020 was 4.5%. This rate reflects a time period before much of the COVID-19 layoffs occurred, and does not tell us much about real-time impacts to our economy.

The table above indicates the percentage of a county’s resident civilian labor force (people who live in the county full time, and are working or wanting to work) who filed a claim for unemployment from early March through April 4. This is the best recent data we have to understand the economic impacts of layoffs in our communities, but it is NOT the “unemployment rate”.

The data is publicly available on Colorado LMI Gateway utilizing Local Area Unemployment Statistics (LAUS) and recently published county-level initial unemployment claims data.

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Congress adds funding to small business loan programs

The Senate on Tuesday approved legislation to increase funding for the popular Paycheck Protection and Economic Injury Disaster Loan programs. Passage is pending in the House.

The Paycheck Protection Program offers potentially forgivable loans for 2.5 times a business's monthly payroll costs. Portions of the loan used for payroll and other allowed expenses can be forgiven. Any amount not forgiven converts to a two-year loan at a 1 percent interest rate.

Economic Injury Disaster Loans consist of grants of $1,000 per employee up to $10,000 and the option to add on a loan for an amount specified by the Small Business Administration. Funds can be used for financial obligations and operating expenses that could have been met had the COVID-19 disaster not occurred. Loans have a 30-year term at 3.75% interest with no payments due for the first 12 months.

Paycheck Protection Program

Original funding: $349 billion

Additional funding: $310 billion

Funding depleted: April 16, 14 days

Loans: 1.6 million businesses out of estimated 30 million total small businesses

Program changes: Extended to include agricultural producers with not more than 500 employees.

The National Federation of Independent Businesses reported that three-quarters of small businesses had submitted PPP applications as of April 17, the day after the program reached its funding ceiling. 20% had been fully processed.

Economic Injury Disaster loans

Original funding: $10 billion

Additional funding: $10 billion

Funding depleted: April 16

Loans: 755,476 processed as of April 20

Loans approved: 755,476 (As of April 20) out of estimated 30 million total small businesses

Program changes: None

The National Federation of Independent Businesses reported that, of the 40% who successfully submitted EIDL applications before April 17, 77% requested the emergency grant of up to $10,000. Of those, 10% received funding.

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'Safer at Home' directive replaces 'Stay at Home' order

During an April 20 press conference, Governor Polis confirmed the statewide “ Stay at Home ” order will expire end of the day on Sunday, April 26, and will be replaced with a “Safer at Home” directive through May. Under the “Safer at Home” guidance, people are still advised to stay at home whenever possible, avoid non-essential travel, wear masks when in public and avoid unnecessary social interactions. The most vulnerable groups will be asked to stay at home unless they absolutely need to leave their home.

Strict precautions will still be applied to critical businesses, and other non-essential businesses would be allowed to reopen in early May with precautions. Further guidance will be released later this week.

The Governor shared additional guidance and clarifications in his April 22 press conference.

Read the Employers Council's analysis of the Safer at Home directive.

PPP program resulting in tension and misunderstandings

Myths employers have about loan, unemployment

I’ve qualified for PPP; will it hurt me if my employees file for unemployment insurance? Can I tell them not to, if I already laid them off?

Employees may be eligible for unemployment insurance (UI) benefits for the weeks of lost income up to the point they are returned to the payroll. If they have already filed a claim and been approved, they should report honestly and accurately when asked about hours worked and wages earned during their payment request process. This will ensure that they are not paid UI for weeks when they are ineligible. Those who have not yet filed may file for weeks that have already gone by, wherein they lost income. This will not harm you as an employer (see #2); please don’t discourage employees from claiming benefits for weeks where wages were lost. Employees may still be eligible for UI benefits if they return for partial hours. The UI system will determine if they qualify for any benefits - employers do not need to be involved in this process.

Will my unemployment account be charged for COVID-19 unemployment claims?

Premium paying (private sector) employer accounts will not be charged, nor will their premiums be raised for any claims related to COVID-19. 100% of unemployment costs are being paid through the state’s UI Trust Fund. Direct-reimbursing (public or non-profit) employers will be responsible for 50% of the cost of unemployment claims, reduced from 100% during normal circumstances.

When does my 8-week PPP loan window start?

Your lender will provide a loan origination date after your loan has been approved. Your period for potential loan forgiveness must begin after the origination date, starting from the date your first payment was received from your lender.

How many people/FTEs do I need to employ in order to be eligible for the PPP loan forgiveness?

The Small Business Administration is expected to release additional guidance on PPP loan forgiveness by April 26. Currently, the legislation requires employers to have the same number of employees during the eight-week loan period as they did during the same period last year.

Can an employee file for unemployment before my business’s PPP starts?

Yes. Any employee who has had their hours reduced below 32 per week, and is otherwise eligible for unemployment, may file a claim for unemployment insurance for weeks of lost wages. Unemployment benefits are generally retroactive to the date of separation. Employees should be encouraged to file a claim for weeks where they have lost earnings, and to always report honestly and accurately when this situation changes (i.e., when you are able to pay them again through the PPP loan).

My business is still closed - what type of work can I have my employees do and still be compliant with the guidelines of the PPP?

The PPP loan does not take into consideration what, if any, work your employees do while receiving a paycheck through PPP. The loan forgiveness is based upon payroll being paid, not work being done. If a business is closed, there is no need to require employees to work in order to meet payroll obligations. Employers are strongly encouraged to not risk their relationship with employees by replacing their regular duties with “made up” work in order to maintain payroll levels sufficient to qualify for loan forgiveness.

My employees make more on unemployment than what I can pay them, and some don’t want to come back to work. What can I do?

Employees who previously earned less than $1000/week might fare better financially through unemployment and the added Pandemic Unemployment Compensation (PUC) payments of $600/week than they did earning wages. This puts employers who are now trying to bring workers back at their previous wages in a difficult position.

If a person reports they have refused offers for suitable work, they are no longer eligible for unemployment. See #5 above on the importance of keeping work “suitable.”

If you offer your employees their previous position at their previous rate of pay, they should accept this offer. Note that employees who are unable to work due to other matters related to COVID-19, such as illness or care of a child who is not in school, may be eligible to file for Pandemic Unemployment Assistance instead of Unemployment Insurance.

Employers may be able to structure hours and wages such that employees can continue to benefit from unemployment insurance and PUC payments and employers still receive most or all of the available PPP loan forgiveness. The best mechanism to do this is through the WorkShare Program, which enables an employee to work at reduced hours, while still receiving UI benefits. More information on WorkShare can be found here .

Can I still apply for the PPP program?

All of the $350 billion allocated for the PPP has been claimed and lenders are not currently accepting any new applications. Additional funding has been allocated to small businesses by the Senate. The House is expected to approve the addition soon as well.. Those who were unable to apply for a PPP loan but planned on doing so are encouraged to prepare the documents and application form, and talk to a banker to prepare for if/when the next round of funding is available.

What happens if I can’t keep my employees on payroll after my 8-week PPP program ends?

At that point, employees would be able to file for or re-open an unemployment claim. It is not yet understood whether that will affect PPP loan forgiveness. Additional guidance is expected to be released by April 26.