Busines Update - Weekly Digest (September 15, 2021)
The business community is sharply split by the announcement by the Biden administration of a plan that mandates COVID vaccinations or weekly testing. Some business leaders applaud the plan to keep the surge in COVID cases from hurting the economy, although smaller employers may find the mandate difficult to enforce. Expanding testing may not be possible unless capacity is also significantly increased. Some business leaders disagree with the mandate and support their workers in making their own decisions. The additional requirements and cost of weekly testing can be viewed as an additional tax on businesses. It’s also not yet clear whether companies with fully remote teams will also need to comply to the same degree as companies with onsite teams.
THE AMERICAN RECOVERY PLAN ACT (ARPA)
Economic Injury Disaster Loans (EIDL)
The SBA recently made changes to the EIDL loan program to help small businesses still struggling with the pandemic. The SBA still has more than $150 billion available in funding. These changes include the following:
The maximum loan size has increased from $500,000 to $2 million.
Loan proceeds can also be used to prepay commercial debt and to make payments on federal loans.
Deferred repayments are now available. Small business owners have two years after loan origination before payments are due. Interest will accrue, and payments will be made over 28 years.
Eligibility has been expanded to organizations with multiple locations. Under the old rules, only organizations with fewer than 500 employees were eligible. Now, organizations with up to 20 locations are eligible, provided that each location has fewer than 500 employees.
The EIDL program will run through December 31, 2021 and offers 30-year loans with interest rates of 3.75% for small businesses and 2.75% for not-for-profits.
Monthly Child Tax Credit Payments
If you missed the first few advance Child Tax Credit payments, the IRS may make it up to you by sending larger payments through mid-December. September payments for the advance Child Tax Credit will be going out by direct deposit if the IRS has your banking information, which you can update at the IRS Child Tax Credit portal.
TAX MATTERS
Residents of New York and New Jersey impacted by Hurricane Ida now have until January 3, 2022 to file business and individual tax returns and make tax payments. This extension applies to any tax returns or tax payments that normally would be due between September 1, 2021 and December 31, 2021. Residents of Louisiana also have the same extension to file tax returns and pay taxes.
At the end of 2020, the IRS had a backlog of eight million paper business tax returns, an increase of 3230% compared to 2019, when it had a backlog of 239,000 paper returns to be processed. By the end of July, that backlog had decreased to 291,000. The backlog was caused by shutdowns of tax processing centers and other offices to protect employees and taxpayers.
THE GREAT REASSESSMENT
The pandemic has changed the way we work, likely forever. CNN interviewed 15 CEOs about the lessons they learned and their ideas about the future of work. Here are a few snippets of those interviews:
Chobani CEO Hamdi Ulukaya: “The future of work must also include fair and equitable compensation, part-time options, robust benefits packages, parental leave, extensive health and safety programs, and a positive and inclusive environment—these elements should no longer be revolutionary, but the norm.
Dropbox CEO Drew Houston: Working from home “presented a unique opportunity to entirely re-imagine how we work for the better….I see the 40-hour workweek—an artifact of factory work—finally becoming a thing of the past…The workplace will now be wherever work happens, and the workweek will be whenever work happens best for each person.”
Slack CEO Stewart Butterfield: “Today we have what is likely to be the greatest opportunity we will ever have in our lifetimes to reinvent and re-imagine how work gets done….The greatest obstacle to fully taking advantage of this opportunity is the heavy gravitational pull of the status quo.”
REOPENING THE OFFICE AND REMOTE WORK OPTIONS
Hybrid work schedules mean that fewer desks are occupied on a continuous basis, so many companies are expanding their use of unassigned seating, also known as “hot desking” or “hoteling.” This article from CNN Business has tips for employees working in this situation. For example, because you may be carrying everything you need with you, you may need a small tote bag, and you will likely pare down what you bring with you from place to place. Creating your own routine to take the place of sitting down at your usual desk will help you get in the right groove to work each day.
ECONOMY
Economic recovery from the pandemic has been complicated by rising prices and labor shortages, according to the Fed’s latest Beige Book, a compilation of anecdotal information about the economy. Labor shortages in restaurants, airlines, and hotels have forced businesses to reduce capacity. Shipping delays and shortages in materials are disrupting businesses from bridal stores to breweries. Employers face continuing challenges in attracting workers willing to work at the wages they offer. Workers may need higher wages to be able to afford higher costs for housing and childcare.
Over the last five years, consolidations in the shipping container industry have led to six operators controlling more than 70% of capacity, which has added to supply chain problems caused by the pandemic. The result of the consolidations is fewer bigger ships, which cuts waste from the system and reduces warehousing expenses. However, this streamlined system is more sensitive to stresses such as shutdowns at a few key terminals in China and congested ports on the west coast. The combination of fewer operators and clogged supply lines in resulting in shipping delays and steep price increases. Some shippers, such as Walmart and Home Depot, have been chartering their own ships at great expense, an option that was previously far too expensive.
Happy Animal News This Week
Read about the five zebras in Maryland who are roaming around Prince Georges County, on the lam.
Cows are being toilet-trained to help save the planet.
Australian Bandicoots have been brought back from extinction. Never heard of one? Here’s your chance to learn all about them!
