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Ineligibility for the Payroll Protection Plan; other options?

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  • Ineligibility for the Payroll Protection Plan; other options?

    I am part of a multi-specialty primary care group with practices at multiple sites in several regional cities. Last year, we had fewer than 500 employees, but added a couple of practices and now are over 500 employees. Like everyone else, revenue for the second and third quarter will likely not meet expenses. The Payroll Protection Plan provides a forgivable loan of 2.5X one month’s payroll which I am sure will keep many above water. Since companies with more than 500 employees are not included, are there any good options in the CARES act for us short of furloughing a bunch of employees so they can receive the enhanced unemployment benefits?

  • #2
    decrease physician and admin compensation?

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    • #3
      Originally posted by jacoavlu View Post
      decrease physician and admin compensation?
      We have done both. We reduced all physician draws and administrative pay for the next two months. My next check will be under $1K take home. I’m looking for other options to retain my employees.

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      • #4
        With a group that size I suspect you have lawyers and CPAs that you work with. Now would be a good time for them to earn their pay.

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        • #5
          reduced physician “draws” does this mean reduction in salary? Or just reduction in profit distributions for owners / partners?

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          • #6
            Any employee who makes close to under $45-50k-ish can be put on unemployment. They'll likely make similar from that than what you pay them for 4 months. Make sure they know you care for them and you wouldn't do this if it wasn't in their best interest. We hinted that anyone who ends up making less on unemployment than we'd have paid and comes back when get asked will hopefully get an end of summer bonus, so long as things turn back on. We just have to figure out how to do that within the law, but the plan is to have our employees be made whole. They work hard for us... This is our time to be loyal back.

            That cut our non doctor payroll from $50,000 monthly to hopefully under $10k, which is about the same percentage cut as our production.

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            • #7
              Originally posted by jacoavlu View Post
              reduced physician “draws” does this mean reduction in salary? Or just reduction in profit distributions for owners / partners?
              We keep only what revenue the group earns. I anticipate that even with my minimal draw, there will not likely be any profit distributions for a long time. We’ll have to wait and see. My main concern is keeping our wonderful employees and allowing as little financial disruption as possible for them.

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              • #8
                Originally posted by Molar Mechanic View Post
                Any employee who makes close to under $45-50k-ish can be put on unemployment. They'll likely make similar from that than what you pay them for 4 months. Make sure they know you care for them and you wouldn't do this if it wasn't in their best interest. We hinted that anyone who ends up making less on unemployment than we'd have paid and comes back when get asked will hopefully get an end of summer bonus, so long as things turn back on. We just have to figure out how to do that within the law, but the plan is to have our employees be made whole. They work hard for us... This is our time to be loyal back.

                That cut our non doctor payroll from $50,000 monthly to hopefully under $10k, which is about the same percentage cut as our production.
                Thank you. I agree 100%.

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                • #9
                  There is a loan program. Cutting expenses plus a loan is probably the route to take.

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