Your Financial Health During Covid-19

General comments are provided below (specific planning should be based on your company’s distress level, financial needs, resources and access to capital).

Q: Given the swift adverse effect on my business, should I borrow $$ from other sources (other than this forgivable loan) to keep my employees?

A: NO. The federal government will be providing forgivable loans (Paycheck Protection Program) totaling 2.5 months of your payroll costs, based on average monthly payroll costs for the 1-year period before the loan, times 2.5.

Payroll costs are defined as gross pay up to 100k per employee plus state and local payroll taxes, group health benefits and premiums.

Q: When will the federal government provide cash relief for my company?

A: It is expected to be several weeks after the Act is signed (3/27/20) before a same day application/cash transfer can take place.

Q: Will 100% of the loan be forgiven?

A: Possibly, as long as you retain the same level of (FTE) employees as before the CV crisis and not reduce salaries by more than 25% (excluding employees with salaries over 100k/year). If you have less (FTE) employees by June 30, 2020, or have cut pay by more than 25%, then the amount forgiven will be a pro-rata % of the loan (for example…if you receive a $1 mil loan and retain only 80% of employees, then 80%, or 800k will be forgiven).

Details:

-the amount of the loan to be forgiven is based on the lesser of, subsequent expenditures for payroll costs, interest, rent and utilities for 8 weeks after the loan date, or the loan amount.

-the calculation for change in # of (FTE) employees is based on a comparison of (FTE) employees for the period 2/15/19 through 6/30/19 or the period 1/1/20 through 2/29/20, then compared with the period 2/15/20 through 6/30/20 or 30 days after the CARES act is signed: 4/26/20 through 6/30/20 (which allows a benefit for rehires).

-  Repayment terms on the balance not forgiven, if any, are up to 10 years, maximum of 4% interest, no payment for 6 months to 1 year, no prepayment penalties, no collateral and no personal guarantees.

Q: How do I apply for this  federal government forgivable loan?

A: These are SBA funded loans to be administered and applied for through your bank. It is expected that the application and funding will occur on the same day, several weeks after the CARES act is signed by the President (3/27/20).

Q: Should I pursue loans and/or grants being offered by my state government or loans that currently are offered through the SBA?

A: Perhaps, but first assess the amount of federal government funding which may be forgiven then pursue other options if there are remaining needs. Most of the state and SBA “disaster funding loans”, at this time, are subject to normal lending criteria, fixed repayment terms, interest and personal guarantees if the loan is over 200k. There are state grants available, but at much smaller amounts.

Q: What should I be doing in the meantime before federal government $$ is available to my company?

A: Suggest downsizing as much as possible to meet your cash inflows while also gauging prospective sales. Also limit cash payments wherever possible to vendors and for all non-essential items.

Q: Should I furlough employees while awaiting the forgivable loans?

A: That’s a close call. It is helpful to know that the CARES Act provides for significant increases in unemployment benefits, so the pain to furloughed employees will be lessened and possibly eliminated. It also may be beneficial to rehire furloughed employees up to 30 days after the Act is signed (by 4/27/20)  to maximize the loan forgiveness.

Q: Are banks and other note holders offering any help with payments, if I ask?

A: Yes, most will provide 60 to 90 days of interest only and some are providing “forbearance” (no payment at all) for 60 to 90 days, though the interest will be added to the principal balance.

Q: How should I plan for the “other side of the curve” when activity is expected to pick back up?

A: LIQUIDITY, LIQUIDITY, LIQUIDITY

Your goal is to maximize cash and credit now, in order to be able to fund working capital for inventory and labor when the business comes back.

Q: Any other helpful provisions in the CARES act for my business?

A: Yes

1)If your company is losing more than 50% of revenue or has to close because of the crisis, then special payroll tax reduction provisions and deferrals are available when you reopen.

2)Tax losses in 2018, 2019 or 2020 can now be carried back 5 years and without a limitation against income        

3)Building improvements can be expensed (fully depreciated in year incurred) and prior year tax returns can be amended

4)C-Corp estimated taxes for 2020 are deferred until 10/15/20

Q: How do I navigate the myriad of financing options, loan applications and planning considerations?

A: Feel free to contact us. We are here to help.

The government will be issuing further guidance, corrections and clarifications in the coming weeks and months,

so stay tuned for further updates.

FAQ: Coronavirus & HR

FREQUENTLY ASKED QUESTIONS ABOUT HR AND CORONAVIRUS SUMMARY OF THE FAMILIES FIRST CORONAVIRUS RESPONSE ACT
New laws addressing critical human resources issues have just been enacted in response to the coronavirus (COVID-19) pandemic. This legislation is called the Families First Coronavirus Response Act.
The new laws include refundable tax credits for employers that are required to offer emergency FMLA or paid sick leave.
WHAT DOES THE NEW EMERGENCY FMLA FEDERAL LEGISLATION REQUIRE?
The new legislation in response to coronavirus—which applies to businesses with FEWER than 500 employees—requires:

• Twelve weeks of job protection under the revised Family and Medical Leave Act

• The leave applies when o An employee is unable to work or telework in order to care for a minor child if the child’s school or child care has closed or is unavailable due to a public health emergency

• The first 10 days of leave can be unpaid. o The employee can use PTO (vacation, sick, and/or personal). o Employers cannot require use of PTO for this leave.

• The remaining FMLA leave MUST be paid by the employer as follows: o Pay should be at 2/3 of the employee’s regular rate. o Number of hours paid should be those that the employee would be otherwise scheduled to work. o Pay can be capped at $200 per day. o Pay can be capped at $10,000 total.

• The employee has job protection to return to their position or an equivalent position after their leave expires or their need for leave is resolved.

• Exception to job protection for employers with fewer than 25 employees: o If the employee’s position has been eliminated due to operational changes resulting from a public health emergency, the employer does not have to provide a position for the employee at the end of their leave. 

CRITICAL INFORMATION:
For companies with fewer than 50 employees:

• If the required leave provisions of this new legislation will jeopardize the viability of the company’s business, the company can be excluded from the requirements of this Emergency FMLA legislation.

WHAT DOES THE NEW EMERGENCY FEDERAL PAID SICK LEAVE LEGISLATION REQUIRE?
The new legislation in response to coronavirus—which applies to businesses with FEWER than 500 employees—requires:

• All full-time employees are entitled to 80 hours of paid sick time.

• All part-time employees are entitled to paid sick time hours equivalent to the typical number of hours they are scheduled to work in a two-week time period.

• This sick time may be used by employees in the following circumstances: o Subject to a federal, state, or local quarantine or isolation order related to COVID19 o Following the advice of a healthcare provider to self-quarantine because of COVID-19

Spring Print Matters

 Download Print Matters

PGAMA Staff Working Remotely

As of today, Monday, March 23, the PGAMA offices will be closed and the staff will be working remotely. We are still diligently working to provide PGAMA members up to date information and we are still available via phone and email to answer any questions you have. Do not hesitate to call. Stay safe and well. 410-313-0900

Upcoming Events

In light of the recent Coronavirus crisis, the following events have been rescheduled or postponed

Excellence in Print has been rescheduled for June 18, 2020

Disaster Recovery Workshop - April 2 - postponed

Mail Design Consultant Workshop - April 16 - postponed 

Digital File Preparation & Output Class - postponed

PGAMA is here to help.

In the last few weeks, we have been witness to an unprecedented health crisis that has created havoc throughout the world both as a health and economic challenge and the US has not been spared. The experts fear the worst is yet to come and we want to assure our friends and members that PGAMA is open for business and ready to assist in any way that we can.

While it may be necessary to cancel or postpone workshops, educational sessions and network events in the next few weeks, rest assured that continue to be available for technical, business, HR and government regulation issues both on a state and national level. Additionally, PGAMA has a vast nationwide network of companies with myriad capabilities to assist our members if, for any reason, your ability to manufacture is compromised.

As always, the network of benefits that are exclusive to PGAMA members remain and we are always ready to discuss how any or all of these programs can benefit your company

Most importantly, stay safe and all the best in these extraordinary times

The PGAMA Team

410-319-0900

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The Kirwan Commission Update

The Kirwan Commission on Innovation and Excellence is a multi-year initiative to research and develop major funding and policy reforms to improve the quality of Maryland’s public education system. However, the promised investment carries a huge price tag - $40 billion over the next 10 years (FY2030); equivalent to nearly $4 billion in annual mandated spending. State taxpayers will pick up an estimated $2.8 billion (70%) of the costs. The remaining balance will fall on the locals - Baltimore City and the counties (all 23) are responsible $1.2 billion (30%). But both Senate and House Leadership have publicly assured Marylanders that they will not incur new taxes or tax increases to fund this initiative…for now.

Kirwan Commission Update

Dell Joins PIA National Buying Program

For RACG Members

On October 31st, 2019, the RACG FSC certificate will be transferred from NEPCon to a different certification body, SGS North America (SGSNA). Though there is work required to switch certification bodies, we periodically review our certification contract to ensure that you get the best rate, with the least hassle, possible. After almost a decade with Rainforest Alliance, including making some tough decisions internally that were needed to keep your annual rate unchanging during that same decade, SGS North America was hands down the best option during this review cycle. What does this mean for you? The RACG FSC certificate code will change, from NC-COC-005576 toSGSNA-COC-005576. You will need to make this change in your systems and internal processes so that all outgoing invoices and shipping documentation reflect this new certificate code. We strongly recommend that you continue to use your current one or two digit sub-code at the end of the certificate code (those will not change). The RACG FSC Trademark License Code (FSC®C103525) will not change; the FSC logos you use for your customer’s jobs and your own promotional uses remains the same. This also means that the FSC label generator will continue to use the same login. Probably the biggest change is that we willno longer be able to use the Rainforest Alliance Certified Seal(green frog). If you are using the RAC Seal, you will need to remove this from all materials such as customer jobs, websites, and other promotional materials as soon as possible (or as you do new jobs) but no later than October 31. The next big change to be aware of is that FSC trademark approvals will not be submitted through a trademark portal.On October 31styou will need to begin emailing your trademark submissions. SGSNA provides a 24-hour response time. Information for trademark submissions will be shared with you prior to October 31st. After October 31st, 2019, we will be addingSFI Chain of Custody(CoC)certificationto the RACG group in addition to the FSC CoC certification.Our certificate will share a group SFI CoC code, the same as we do for FSC CoC certification. We will not receive the SFI CoC Code until after the transfer has been completed; be assured we will provide it as soon as we receive it. Our documentation set is currently being revised to accommodate the new certifier information, as well as the SFI requirements.A separate email will be sent shortly to Primary FSC contacts for each member with a link to the updated documentation set.If you need to have additional contacts within your organization receive this transition email please let us know as soon as possible. The document set should be reviewed and completed at your earliest convenience. The price for your RACG membership will not change.

PGAMA Acquires PrintED

PGAMA Acquires PrintED
On July 1, 2019,PGAMAformally acquired the nationalPrintED Accreditation Programfrom Graphic Arts Education & Research Foundation (GAERF).  Workforce development is one of the top challenges faced by the printing industry today and PrintED is one of the long-term solutions.  PGAMA has been a supporter and contributor to this program for many years.

PrintEDis a nationally recognized accreditation program based on industry standards and competencies that are appropriate for high schools and post-secondary schools offering graphic communications programs. PrintED accreditation ensures an instructional program for students that is current and relevant, consistent across the nation and aligned with industry standards.

Workforce development is one of the top challenges faced by the printing industry today. Employees are retiring at a faster pace, and companies are having more difficulty finding experienced employees. This difficulty is causing companies to look at alternative sources of employees.

PrintED graduates have an interest in the printing Industry, understand industry terms, are familiar with machinery and equipment, and production workflow. They are knowledgeable, trained, and are highly employable in Industry or continue with post-secondary education.

PGAMA is uniquely positioned to guide and expand the PrintED program using their longstanding model for successfully managing relationships between PrintED schools, State Departments of Education, and local industry partners. Support from state agencies is crucial to maintain funding for our industry education programs and to impact national policymaking for career readiness. These connections are essential in establishing and maintaining a reliable, effective, and consistent pipeline of new employees for the Graphic Communications Industry.

PGAMAis a non-profit trade association serving printing firms in Maryland, Virginia, and Washington, D.C. whose mission is to help members meet their business goals through advocacy, education, and communication.   The printing & publishing industry employees over 30,000 people in our region and ranks among the top in terms of manufacturing establishments, economic impact and number of employees.

For more information about PGAMA, contact President Jay Goldscher at 877-310-0906 /This email address is being protected from spambots. You need JavaScript enabled to view it.or visit the PGAMA website:www.pgama.com.