Mike McAninch is a Practice Integration Advisor with Buckingham Strategic Wealth, where he specializes in helping dentists connect their money and their values to realize their most important financial goals.
Things are likely going to be TOUGH for your team. Among all their concerns related the current global pandemic, perhaps the most immediate one is money! To that end, I’d recommend you have a team meeting and address the paycheck issue right up front.
The Coronavirus Aid, Relief, and Economic Security (CARES) Act introduces two assistance programs that are designed to keep whole, from a financial perspective, employees who are furloughed, terminated or working diminished hours.
If your practice has closed because of this crisis (here are some financial first steps that you, as a small business owner, can take in response), your team should receive the following benefits.
Recovery rebate: Most taxpayers will receive a cash payment from the U.S. Treasury Department of approximately $1,200 each (roughly $2,400 per couple).
Increased unemployment benefits: The CARES Act added $600 per week to the regular state unemployment benefit. For many folks, this may be more than their current pay. Using Indiana as an example, this additional $600 weekly payment will result in a total weekly benefit of $990 (an annual rate of $51,480).
Whenever possible, I would strongly discourage your team from taking out 401(k) loans or a second mortgage on their home. More debt to make ends meet rarely is a workable solution in the long run.
Finally, stress to your team that when this health emergency is over, you are committed to putting them back to work just as soon as possible!
While today’s topic centers on the CARES Act and your employees, here’s a look at a chart we put together that quickly compares all the relief package’s various programs for business owners.
Still have questions? Please reach out to any of Buckingham’s Practice Integration Advisors. We are here to help!
Important disclosures: The material provided is for general information and education purposes only and does not constitute investment, legal, or tax advice. Individuals should seek independent tax advice from a tax professional prior to implementing a new strategy. This information can change without notice as additional guidance becomes available.