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Thousands of dentists, hygienists, and other dental team members are suddenly unable to work because of the coronavirus pandemic.

Many dental practices don’t have an HR manager or even an HR handbook to help guide them on what to do in this crisis situation.

Paul Edwards, the Founder and CEO of CEDR HR Solutions, talked to Patient Prism CEO Amol Nirgudkar about real-life advice for dentists who need to temporarily reduce payroll. Plus, he has great news about the new CARES Act loan for dentists that can help them rehire team members so they’re ramped up and ready to go when the dental practice reopens.

 

Dentist Office Layoffs and Furloughs

The terms layoffs and furloughs can mean different things in different states. Typically, a furlough is unpaid time off but the employee remains on the payroll and retains health insurance benefits. A layoff means the employee is terminated and typically that ends health insurance benefits, retirement benefits, short term disability, long term disability, etc.. When there is a layoff, the employee is entitled to any unpaid vacation pay or sick pay the person may have accrued. In the case of a layoff, the employee will need to be rehired in order to return on payroll.

CEDR HR Solutions recommends contacting your health plan administrator about your options. Ideally, you would want the employees to stay on health insurance regardless of whether you call it a layoff or a furlough during the temporary shut-down.

No matter which term you use, the employee is able to file for unemployment and the CARES Act legislation on March 27 gives unemployed workers an extra $600 in financial assistance each week. Plus, the IRS will send direct payments of $1,200 to millions of Americans, and an additional $500 per child.  If the IRS has your direct deposit information on file, it will be direct deposited. Otherwise, it will be sent by check so it’s important to confirm the IRS has the proper mailing address on file.

Calculate How Much Money You’ll Get from the Coronavirus Stimulus Legislation

Read the CEDR HR Solutions article on Unemployment Eligibility

While employees are unemployed, they can still work a few hours a week for the dentist. The team member just needs to follow the state unemployment guidelines and report those hours correctly.

Once this pandemic is under control and dental practices reopen, the dentist can rehire team members. If the employee chooses not to return, he or she is no longer eligible for unemployment because that person is making a choice not to work.

For details, visit www.cedrsolutions.com for its special section on coronavirus and HR guidance.

 

New CARES Act SBA Loan for Dental Practices 

The CARES Act coronavirus relief legislation also includes a new small business loan program. In the video, Paul Edwards explains how it works. In a nutshell, the employer will have to prove their average monthly payroll and the number of W-2 employees on payroll before the coronavirus pandemic, and then the employer will be eligible to qualify for a loan for that amount times 2.5.

If your payroll was $50,000, then you would qualify for a loan of $125, 000, Edwards explained.

The goal is to keep employees on your payroll.  If you have already laid off employees, you can still be forgiven for the full amount of your payroll cost through the Paycheck Protection Program if you rehire the employees by June 30, 2020.  The covered period during which expenses can be forgiven extends from Feb. 15, 2020 to June 30, 2020 and borrowers can choose which 8 weeks they want to count toward the covered period. 

Click here to read the details.

Live Oak Bank is one of the lenders who will process the loans. Dentists can apply at https://www.liveoakbank.com/paycheck-protection-program-sign-up/

Dentists will need to have:

  • 2019 Tax Returns and/or 2019 P&L and Balance Sheet
  • Last 4 quarters of Payroll Tax Forms (941)
  • Verification of the number of employees and payroll incurred over the most recent 12 months

 

The CEDR HR Solutions team read the bill and it looks like you can apply for the loan through the SBA starting in April, but defer it until you know when you can reopen. That way, you don’t burn through the cash while you’re still closed and your employees can still collect unemployment.

There’s more good news for dentists needing this loan. When the dentist shows that the loan was spent as intended and paid for employees’ salaries and a few other things on an approved list of expenses, then the loan is 100% forgiven, Edwards explained.

Any portion that is not spent by the end of the eight weeks can be converted into a low-interest, 10-year loan with a one-year deferment in payments, Edwards said.

Watch the video for more details and visit the CEDR HR Solutions website for the latest information. Plus, dentists and office managers can join the CEDR HR Solutions Base Camp Facebook group by clicking here.

 

For more videos with industry leaders and downloadable guides, visit PatientPrism.com/Guides.

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