ASA Central Network

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  • 1.  Client Questions Regarding the PPP

    Posted 05-14-2020 18:19

    Hello All,

    I have now received 2 client inquiries regarding use of their PPP funds for payment of temp labor. I assume that they are asking if they can claim the wages for the temporary employees that they are being billed for. I had another ask me today if my company received a PPP and "was I using it to pay their temps whom they pay each week".  My initial thinking is that staffing clients would be disallowed from using their PPP funds for temp labor costs as they are not the Employer of Record, but I am wondering if there is some provision for Co-employers that might be applicable to both sides in this instance. Has anyone else come up against this question? This may be a question for Counsellor Dwyer... Any thoughts on this popular client question  are greatly appreciated ! 

    Central Network has been my daily Go-To for incredible support and guidance from the ASA Legal Team and industry colleagues throughout this COVID crises. Sincere thanks to everyone for your contributions (past, present and future)!

    Best Regards,

    Natalie



    ------------------------------
    Natalie J Roy
    President
    Temporaries of New England Inc.
    860-423-0633 O
    860-933-1142 C
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  • 2.  RE: Client Questions Regarding the PPP

    Posted 05-15-2020 12:42
    Natalie, Great question.

    The consensus of these forums and the attached ASA guideline is that staffing firms are the employer of record for temporary workers. This is because we have all their payroll data, which is a requirement for applying for the loan (and the subsequent forgiveness).

    One example we have is a client converting temps to their payroll BECAUSE they wanted the PPP funds to cover their pay, and realized they could not do this unless they were actually on their payroll.

    A plugged in client will realize we may invoice for temps whose pay is ultimately forgiven and funded by this loan. A few thoughts on that (which have been posted elsewhere):
    1. There is a burden on staffing companies to maintain headcount to achieve maximum forgiveness. This will be a huge challenge for most with varying headcounts.
    2. There is a burden on staffing companies to front/finance payroll in times when payment is NOT guaranteed, or likely to be delayed.
    3. There is a burden on staffing companies to manage FFCRA & cash flow this leave.

    Due to unlikelihood of 100% forgiveness, additional costs of collections, financing payroll, the opportunity cost of having to spend so much time managing the loan, and managing FFCRA leave, the above should give a client understanding that we're not simply having all our costs funded, and there exists a considerable risk for us during this time.

    In some cases, it will make sense to offer a temporary discount to clients to pass the savings along to them to some degree, to keep termed contractors "on the bench" (paid but not billed for).

    Hope this helps.

    ------------------------------
    Ryan Mann CSC
    Direct Hire Manager
    Amtec Inc.
    Chino Hills CA
    (714) 993-1900
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  • 3.  RE: Client Questions Regarding the PPP

    Posted 05-21-2020 02:10
    Dear Ryan,

    Thank you so much for speedy response which was very helpful! Apologies for my "not so speedy" reply to you! It seems that my SPAM filter has a habit of sequestering every 3rd email from the ASA. It's not until a run my SPAM report that I find them. 

    Thanks also for the clarification on the stance that only the "Employer of Record" is indeed the party who should be applying for the forgiveness. After reading the attachments you included, there is no question in my mind that the staffing client will not be the recipient of forgiveness. I have been explaining to clients (and others) for over 30 years that our "saleable product" are the temporary employees. As it relates to the PPP, this is very confusing for many (not in our industry). The PPP is very straight forward for folks in other industries. 

    Wishing you the best of luck in maximizing your loan forgiveness amount! 

    Much success and good health!

    Natalie



    ------------------------------
    Natalie Roy
    President
    Temporaries of New England Inc.
    (860) 423-0633 O
    (860) 933-1142 C
    ------------------------------

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