It’s no secret business owners have felt the effects of the COVID-19 pandemic in very unique ways. Some are obvious. For example, many business owners had to suddenly shift to remote work models when the pandemic began.
However, unless you also own a business, you may not be aware of some of the other impacts the pandemic has had on the way business owners operate. Specifically, several of the relief acts and bills that were passed in 2020 made changes to various laws affecting the way business owners handle payroll.
Now, the recent passing of the COVID-19 relief bill (officially known as The American Rescue Plan Act) is set to have implications for payroll as well. If you own a business, keep reading to learn what you need to know, and how you can ensure your payroll software will help you effectively navigate any changes.
COVID-19 Relief & Payroll Software: What Business Owners Need to Know
The way in which the passing of the COVID-19 relief bill may impact your business’ payroll will depend on the type of business you own. In particular, restaurant and bar owners whose businesses have suffered in the past year should familiarize themselves with the details of the bill’s Restaurant Revitalization Grant Program program.
As the name implies, this program is designed to support bars and restaurants that have been significantly impacted by the pandemic. Because not all businesses qualify, if you own a bar or restaurant, consider reading the relevant sections of the bill to learn if it applies to you.
In regard to payroll, qualifying businesses will potentially be eligible to receive up to $5 million per location (and up to $10 million in total) in relief fund grants. These funds may be spent on payroll, as well as operational expenses like rent and utilities.
Restaurant and bar owners should be aware that, while this relief is similar to that provided by PPP loans in 2020, there is no way to qualify for forgiveness. This highlights one of the reasons they should ensure their payroll software is sophisticated enough to help them adapt.
Those who already received relief in the form of PPP loans could seek forgiveness for them if they can prove that, among other stipulations, they used a certain portion of the funds specifically on payroll. This will naturally be much easier for them if they have been using payroll systems that allow for easy payroll reporting. Be aware, business owners can still seek PPP loans along with RRGP grants. They need to be able to prove they used them appropriately to qualify for loan forgiveness.
This is still a critical feature of payroll software even though loan forgiveness is not an option this time around. While these grants may not be forgiven, the trade-off is that business owners have more options regarding how to use the funds than they did last year. They may thus need to carefully determine how they will allocate them, setting aside a certain amount for payroll based on their other operational needs. Their payroll reporting system should work in tandem with their budgeting process by offering transparent breakdowns indicating the amount they are spending on payroll aligns with their goals. Additionally, having records showing they used the funds for payroll may be critical from a legal perspective.
All these points remind business owners that payroll systems need to be equipped for unexpected circumstances like a pandemic. Check yours to confirm it will suit your needs.