COVID-19 has been impacting organizations and individuals around the world for months—with uncertainty still ahead. While typical market shifts can rock national economies, the turbulence initiated by COVID-19 has been taking a heavy toll on businesses with wide-ranging effects. The vital question facing company leaders is simple: What must we do to survive? The answers do not lie in isolated problem solving, as governments have stepped in to team up with companies, large and small, to minimize the potential impact. Through temporary or permanent legislation, governments are trying to support businesses and, hopefully, help keep them afloat.
Although introduced for the welfare of the population and to slow the spread of the virus, government-imposed COVID-19 restrictions can wreak havoc (and have) on enterprises. How and when companies open for business, and the rules about testing and social distancing, are just some examples of necessary data that pertains to the workforce, to the way work is performed, to the viability of operations, and to the organization’s long-term financial survival. Mercer’s “Government Assistance & Supplemental Programs” report, updated on an ongoing basis, is the place to start for practical answers and solutions to address the evolving situation.
Since March 2020, level 4 advisory guidelines have been in effect in the United States to encourage people to stay at home, avoid nonessential travel, and avoid social gatherings of more than 10 people. The national guidelines are voluntary and not a requirement. However, many states have introduced more stringent requirements that require people to stay at home except for essential purposes—rules that can adversely affect the family’s paycheck for those who do not have the ability, or permission, to work from a home office.
Australian employers have been implementing work from home policies, where possible, to ensure that workers avoid exposing themselves to sources of potential contamination. Under health and safety legislation in all Australian states and territories, employers must provide a safe place of work and, in fact, are liable for any injury sustained by employees while working from home. This well-meaning legality poses a dilemma: Employers have an obligation to ensure that the home workplace is safe and without risks, but most employers have yet to fully implement any work from home assessment or consider how they will ensure a safe place of work for employees.
Other governments have made arrangements related to compensation and benefits. The Canada Emergency Response Benefit (CERB), for example, provides a taxable benefit of CAD2,000 every four weeks for up to 16 weeks to eligible workers who have lost income due to COVID-19. As of April 15, 2020, the government extended the scheme to permit employees to earn up to CAD1,000 per month while claiming the CERB.
In some locations, the authorities have introduced changes to statutory benefits or leave policies. For example, US private employers with under 500 employees will receive full reimbursement for the cost of providing paid leave related to COVID-19 between April 1, 2020 and December 31, 2020 as follows:
Different governments extend a helping hand in other ways. The US Coronavirus Aid, Relief, and Economic Security (CARES) Act, for example, provides economic aid for employees and businesses during the crisis. The Act has provisions for unemployment, stimulus checks for eligible taxpayers, rent moratorium, and other items.
Businesses in Japan can take advantage of tax delays. If they show a decrease in revenue since February 2020 of at least 20% over a minimum one-month period, compared with the same period in the previous year, they may defer corporate taxes for one year without penalties or interest.
Loans offer another avenue of aid. Guaranteed loans are available to businesses with headquarters in Italy that have been impacted by COVID-19. Guarantees are 90% for businesses with under 5,000 employees, 80% for those with over 5,000 employees, and 70% for businesses with turnover above EUR5 billion. Along with other examples of such transactions, loans guaranteed up to EUR5 million are also available to companies with under 500 employees.
The massive, worldwide effort to slow the spread of the disease through social distancing and other efforts is also hindering the global economy’s recovery. Having information at hand—information that explains government programs and changes in mandates that affect employers—is critical to resolving the challenges that face leaders today.
Companies that know they can delay paying taxes can take a deep breath and feel better about having to pay extra for special COVID-19-related benefits, or perhaps restructure the way the company conducts its business. Knowing relevant facts and what the government and their employees expect—while staying abreast of changes as they are introduced—is a sure way to weather the situations that are inevitable in this continuing uncertain economic future.
For more information and to purchase the entire Government Assistance & Supplemental Program Package visit: https://www.mercer.com/product-catalog/products/Government-Assistance-and-Supplemental-Programs.html