[WEBINAR] Supporting Your Workforce’s Financial Security Through the COVID-19 Crisis

The needs of the workforce are very unique at the moment due to COVID-19. Our recent statistics show that 43% of employees using DailyPay are accessing their pay early for coronavirus-related expenses — a number that spiked 400% in recent days. Beyond the usual woes of making ends meet between paychecks, employees are also now concerned about having the groceries and supplies necessary to care for themselves and their families during quarantine, as well as keeping all their loved ones safe and healthy. This is a period of high anxiety for many Americans, but there are steps you can take as an employer to support your employees’ financial security and alleviate some of that stress.

This webinar features DailyPay’s founder and CEO, Jason Lee, and Jeanniey Mullen, DailyPay’s Chief Innovation and Marketing Officer. By tuning in, you’ll gain insight into how industry leaders are handling the ever-evolving rules, regulations and best practices associated with COVID-19 in order to support their employees as much as possible. So many employers are going above and beyond to ensure they are doing everything they can for their employees. It seems that in the midst of this crisis, many businesses are finally starting to realize how important the employee pay experience is to their company’s success.

From pay raises to bonuses to increased emotional support to an improved pay experience, there are multiple strategies employers can use to support their workforce through this crisis. This webinar will focus on how COVID-19 has impacted the hourly workforce, what other companies are doing to support their employees’ personal financial security, and how our team at DailyPay is helping our partners and their employees navigate COVID-19.

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Pay Different: Reimagining the Payroll Cycle In Post-COVID Workplace

Recently, DailyPay enlisted Mercator Advisory Group to conduct a survey of 1,000 U.S. low-income (income less than $75,000/year) salaried workers to determine the value and propensity of this demographic to participate in an on-demand pay (also called earned wage access) solution.

While much has been done to study hourly workers and their vulnerability to financial stress, far less has been done to study salaried workers and how they react to the challenges imposed by unforeseen financial hardships in between paychecks.

This study revealed that, by introducing an on-demand pay benefit, employers can help their workforce reduce the stress associated with paying monthly bills. Most notable and relevant today, nearly half (46%) of those polled are stressed by having to pay monthly medical bills. Allowing workers access to their earned income provides them with financial flexibility, and empowerment over their pay reduces their stress and increases attendance and productivity at work, at no expense to the employer.

Access to their earnings, before payday, helps employees to avoid more financially adverse options when they need access to cash, including using credit cards, drawing down savings, incurring overdraft fees and resorting to payday loans — all which can lead to employees incurring high-interest rates, fees and penalties.

Key findings of the survey include:

  • Nearly half (48%) of respondents reported having a shortfall between payroll cycles, at least sometimes
  • 46% surveyed have difficulty paying medical expenses, at least sometimes
  • About seven in 10 reached out to external sources for funding that often incur high fees; among these individuals, many are frustrated with high-interest rates (51%) and fees (26%) associated with borrowing this money
  • 23% incurred an unexpected expense they could not pay
  • Three in 10 report some difficulty in keeping up with monthly expenses

When presented with the option for an on-demand pay benefit, also called earned wage access, respondents saw the value in it and its ability to stop the cycle of debt. In fact, more than half noted they would also use the DailyPay platform to save money and become more fiscally responsible.

  • 34% responded that they would either “definitely use” or “probably use” DailyPay if it were offered to them.
  • When asked about services that could be replaced by DailyPay, respondents indicated the same potentially financially draining options that they reported using to obtain extra money to pay a bill, including check-cashing services, payday lenders and credit cards.
  • 52% noted they would use the “Save” feature that is unique to the DailyPay platform. The “Save” feature allows Daily Pay customers to put away money for future bills and expenses before they even get paid.

Data collected in this survey reveals the critical need for on-demand access to earned pay that Americans face in typical economic times. Imagine how much more access to earned income has meant to workers during the COVD-19 pandemic.

You can review the full study here, DailyPay and the Mercator Advisory Group discussed the results of this survey during a joint webinar. Watch the webinar on-demand here.

Expect Employers to Accelerate New Pay Practices as the Economy Recovers

Since the COVID-19 health crisis began, employers have needed to speed up use of contactless on-demand pay programs (sometimes called earned wage access), according to employee payment leaders speaking during a recent podcast of The Source, by DailyPay.

The pandemic and the resulting economic shutdown is “one of those events where those in HR, Payroll and Finance have had to think through sets of challenges that they never thought through before in their professional careers,” said DailyPay CEO, Jason Lee. Employers can no longer be “looking for a five-year plan for transformation, we are looking at now,” he said.

This has meant the adoption of new pay practices at an accelerated rate.

Even before the coronavirus struck, companies already had started to address the changing pay needs of a tech-savvy generation of younger workers that “actually values pay choice and pay flexibility sometimes more than salary,” said ADP, LLC, Vice President, Future of Pay Jeff Gies. 

“This has driven the need for providing pay choices to workers,” Gies said.

The challenge for employers is closing the gap between the technological tools available on a personal level to deliver experiences instantly, such as ordering dog-walking services via a mobile phone application, and the applications used to pay workers, which have lagged behind, Lee said.

While these other applications are useful and significant, one would argue that “the experience one has with pay is much more important,” Lee said.

Gies echoed the disconnect by noting that one retail chain recently reacted to the customer desire during this health crisis for a contactless pay option, which was implemented, while their workers were still getting paper pay statements, which could potentially carry virus and disease.

Additionally, employers need to recognize there remains a large segment of workers that, prior to the pandemic, had not adopted digital payment methods. These workers are having to, overnight, modify their behavior, and this is uncomfortable for them. Gies asked: “How can employers help people make that transition?”

Both DailyPay and ADP have safe, secure programs that “empower, enable and put the employee at the center,” Lee said. As employers make the transition to digital and on-demand pay quickly, they can be assured that both providers are compliant and are the “gold standard for how we protect that data and keep it secure, and we have redundant systems,” Gies said.

DailyPay, through its pay experience platform, PayEx™ seeks to “leverage technology to be sure that folks are compliant,” while staying behind the scenes, Lee said.

A key issue frequently overlooked before the pandemic struck, but now is a need-to-have for employers, is providing a “core foundation of financial wellness,” Gies said.

As employers scramble to rehire workers and those workers look to climb out of a period of financial hardship, it’s important for employers to provide “simple, real-life, easy ways to put more money back in the pocket” of workers that are living paycheck-to-paycheck, Lee said and “ADP has developed the right kind of programs to fill this need for their clients.”

DailyPay users have access to savings tools in the app, so when they look to access pay, workers can think “I’m getting my pay, and as I’m getting my pay, I’m thinking about my savings,” Lee said. “It has to be easy and native  . . . and in a way it has to be connected to your pay.”

Go to thesource-dailypay.com to hear or watch the entire podcast, and to access previous podcasts that discuss on-demand pay, also known in the industry as early wage access. 

For additional resources on this topic, see:

Stimulus Checks, Wage Deductions and Controversy in the Lone Star State

Introduction

The novel coronavirus pandemic has fundamentally changed every aspect of American life. From social distancing measures, grocery store shortages and entire cities under lockdown, U.S. workers have been adjusting and trying their best to survive this “new normal.”

Efforts to curb the coronavirus have unfortunately led to the shutdown or temporary closure of businesses around the nation, triggering mass layoffs. Between March 15 and April 15, 2020, 22 million Americans filed for unemployment benefits. According to CNN, “the last four weeks have marked the largest and most dramatic rise in claims on record since the Labor Department started tracking the data in 1967.”

Attempting to keep the economy afloat

To help alleviate the sharp negative economic impact that mass layoffs and business shutdowns have caused, the federal government recently distributed $1,200 stimulus checks in an effort to boost consumer spending and keep the economy afloat.

There has been much debate over whether or not these checks are enough, and their disbursement has been riddled with glitches and delays. Despite the controversy, there is hope that the checks will help struggling workers pay their bills and get by during these unprecedented and difficult times.

Unexpected consequences

The employees of one Texas company may have been looking forward to receiving their government-issued checks, until learning that their employer has plans to “preemptively deduct funds from [employee] paychecks. That number is based on what [the company is] anticipating the government relief fund to be,” an anonymous worker for the company told KXAN

According to KXAN, the company has issued an agreement to workers, which would put the employees under a “temporary compensation reduction that is in line with the assistance that it receives from the federal government related to the COVID-19 pandemic.” By signing the agreement, the company’s employees would have their paychecks between April 6 and April 20 cut by 100% of any money received under the stimulus bill.

Not only does this move put employees at risk of getting paid less than minimum wage, but it highlights the reputational risk and potential media frenzy that can arise when companies process deductions. Wage deductions are illegal in 14 states (CA, CO, IN, KS, KY, MA, MN, MO, MT, NJ, NY, SC, VT, WI and WY), and cases like this one underscore the need for businesses to tread lightly into this regulatory murkiness. 

Is the risk worth it? For one employee, the answer is clear, “I would much rather sit in the unemployment line and be proud of my decision to leave a company that’s making these kinds of requests or demands, than hate myself for going along with it because I don’t agree with it.”

The takeaway

Staying compliant is a critical part of continuing business operations and maintaining a positive reputation. If a business gets into hot water for thwarting regulations, the implications can be dire. When making payroll decisions or implementing new payroll technologies, it’s imperative to carefully evaluate vendors to ensure your business is compliant and to effectively help your workforce achieve financial stability.

Our Survey Says … DailyPay Saves Employees, On Average, $1,205 Per Year

On March 30, 2020, DailyPay conducted a randomized sample survey of 6,950 active users who had used DailyPay in the last 3+ months. The goal of the survey was to determine the actual monetary impact that DailyPay has on our users and to determine how DailyPay affected their financial security.

The survey received an impressive 24% response rate (1,690 users), but what was even more impressive was data that the survey uncovered.

Question 1: How often have you been charged an overdraft or late fee?

Before Using Daily Pay

Key takeaway: Before using DailyPay, 2 out of 3 respondents reported that they were being charged overdraft fees or late fees. 

Key takeaway: Before using DailyPay, only 32% of people had “never” incurred an overdraft or late fee. After using DailyPay, that number more than doubled to 74%.

Question 2: 

Key takeaway: DailyPay has helped employees avoid an average of $49.43 in fees, per month, from overdraft and late fees, or $593 per year.

Question 3:

Key takeaway: DailyPay has helped employees avoid an average of $51 in fees, per month, from payday loans, or $612 per year.

What this survey is telling us is that DailyPay is saving employees, on average, $1,205 per year in reduced fees from loans, overdraft fees and late fees.

Additional survey results from respondents:

  • 85% of users said DailyPay makes them more able to budget and pay large monthly bills like rent, utilities, car payment, etc. (vs. only 4% says it makes them less able)
  • 78% said that DailyPay helps them pay bills on time and avoid late or overdraft fees
  • 74% said DailyPay has helped reduce their financial stress
  • 70% said DailyPay has helped them to avoid taking out a payday loan
  • 59% said DailyPay motivates them to go to work
  • 56% said DailyPay motivates them to pick up more shifts or work longer hours
  • 51% said DailyPay has helped improve their financial health
  • 50% said DailyPay has helped them be more disciplined about spending
  • 46% said DailyPay has helped them to save more

In April, we conducted a second user survey to ask questions related to the impacts of COVID-19 on DailyPay users’ work and life.


16% of respondents reported that they applied
to their current jobs because they offer DailyPay.


Over half of those respondents work in the on-demand space for companies in food delivery and security; the remainder primarily working in health care or home care. 

In addition, we asked, “Does having access to DailyPay during the COVID-19 pandemic reduce your financial stress?” 90.1% of respondents answered, ”yes.” Compare this with the 70% above who said “yes” under normal circumstances and you can see how critical on-demand pay is in emergency circumstances in reducing financial insecurity.

These surveys of DailyPay users are proof positive that access to earned income is critical to employees who live paycheck to paycheck and who rely on a daily pay benefit to pay bills on time and avoid overdraft fees, late fees and predatory payday loans. DailyPay is, therefore, not only a less expensive alternative to other means to obtain cash, it puts employees’ own money into their wallets as they need it. This was especially true during the current pandemic when users needed access to earned income both to make necessary preparations and to keep their families safe.

The survey results also address the concerns of both employers and policymakers who wonder whether access to earned income causes irresponsible spending. It is clear from this data that the answer is an overwhelming “NO!” The fact that 85% of users are better able to make large monthly payments, like rent, car payment and utilities on time proved that access to their earned income actually makes them more responsible, saving them a whopping $1,205 per year in fees associated with overdrafts, late payments and payday loans!

Want to get started on helping your employees to save more of their own money by offering them access to their earned income, at no cost to your company and no changes to your payroll processes? 

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Pay Different: Reimagining Employee Pay in Light of the COVID-19 Pandemic

Almost two months ago, the world hit pause as restaurants, businesses and office buildings closed, weddings were canceled, airplanes were grounded and cruise ships were put in dry dock. Work from home and social distancing became the new “normal” and Zoom and Google Hangouts replaced conference rooms and in-person meetings. Living rooms became board rooms and bedrooms and dining rooms became offices.

The world as it once was has now changed forever. Our home lives have changed. Our work lives have changed. In fact, work as we used to know it was shattered.

As we begin our recovery, every company has an opportunity to think smarter. To look for ways to do things more efficiently. To rehire furloughed and laid-off workers and ensure that they have a safe workplace where they can be productive once again. To look for cost-effective ways to open up for business once again that will provide benefits to employees as well. One way to do that is through pay.

That is why DailyPay has launched the Pay Different campaign. As companies begin their rehiring efforts, they will be looking for top talent to fill their open positions, and they will all be looking to exactly the same talent pool. To compete effectively and in a cost-saving way, they will need to set themselves apart from the competition by providing valuable employee-centric benefits. They will need to do things better. To do things different. To pay different.

DailyPay’s revolutionary pay experience platform, PayExTM, is the cornerstone of the Pay Different campaign. This on demand pay platform comprises a series of premier capabilities that enable every worker to experience payday on their own terms. It’s a unique approach that brings an antiquated way of paying employees into the 21st century and enriches a company’s employee experience at every stage of the employee lifecycle, from onboarding to departure. 

With access to pay and save on-demand, employees feel more connected and valued at work and, therefore, their productivity increases. According to our research, over 80% of employees report that their satisfaction with their employer has improved since their company offered DailyPay. With PayEx, employees have an opportunity to save money each day and map their route toward fiscal responsibility.

A recent DailyPay research study shows what it means to your employees when you pay different. It also indicates that, on average, employees who use the daily pay benefit, save $1,205 per year because, with greater control over how they get paid, they are able to avoid late fees, overdraft fees and predatory payday loans. Of those we surveyed:

  • 78% say they are avoiding late fees.
  • 74% say that their financial stress is reduced. 
  • 70% say they no longer have to take out predatory payday loans.
  • 85% of those who use a daily pay benefit claim that it enables them to budget and pay large monthly bills like rent, utilities, car payment, etc.
  • 59% say DailyPay motivates them to go to work.

    Source: DailyPay On-Demand Survey 2020 

Offering DailyPay is a cost-saving solution for employers because it costs them nothing. But the RONI (Return On NO Investment) is tremendous for employees and employers. During the COVID-19 pandemic, access to on-demand pay has literally made the difference between putting food on the table or going hungry, paying bills on time or racking up even more debt, getting much-needed medical supplies and attention or watching a loved one suffer. 

And employers who offer a daily pay benefit experience have access to one of the biggest cost-saving plays that results in:

  • On average, a 50% reduction in turnover
  • The ability to recruit and fill open positions in half the time (52% faster)
  • More employees on direct deposit, reducing costs associated with issuing paper checks 
  • Reduced absenteeism because 59% of employees are more motivated to come to work
  • Greater productivity, because 74% of DailyPay users say having access to their earned income has helped reduce their financial stress, making them more productive at work

Source: DailyPay On-Demand Survey 2020 

Want to do right by your employees in the most cost-conscious way? Pay different. They’ll love you for it.

DailyPay will be rolling out a series of new initiatives tied to the “Pay Different” campaign in the coming weeks. Join our webinar on “Rebuilding Trust in the Workplace Post COVID-19” on Tuesday, May 19th from 1:00 – 2:00 p.m. ET.

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CORONAVIRUS STIMULUS PACKAGE: WHAT YOU NEED TO KNOW

The U.S. Senate officially designated April as National Financial Literacy Month in 2004. In support of this initiative, public and private sectors initiate outreach and education programs to help Americans understand and manage their finances. While the topics usually touch on personal finance matters like credit management, debt busting and setting goals and priorities for expenses and savings, this year, it feels appropriate to take a slightly different approach. 

With the pervasiveness of the COVID-19 crisis, Congress has introduced the “Coronavirus Aid, Relief, and Economic Security Act,” better known as the CARES Act. Every year, DailyPay supports employees with relevant financial literacy content and this year, we’re hosting “Financial Literacy Month: Financial wellness tips for uncertain times,” a 6-part personal finance video series that discusses key aspects of the stimulus bill. We hope that by empowering people with this information, it will help them navigate this crisis like an expert. 

As the leading fintech provider of on-demand pay solutions, DailyPay is at the forefront of creating a pay experience that puts employee needs front and center. Access to earned income has always been a core part of that mission but it takes on a new level of importance during this crisis when access to pay is critical to the financial stability of so many Americans. DailyPay has responded in numerous ways to support employers and employees alike through this crisis, from offering free next-day transfers to information-sharing through the DailyPay Workforce Index, which tracks the impact of COVID-19 upon the workforce across four key DailyPay partner industries. Creating exclusive content to keep our audience informed about the Coronavirus stimulus package for Financial Literacy Month is a natural follow-up to our other initiatives. 

Join us each week as we explore a new aspect of the CARES Act with Certified Financial Planner™ and founder of Brooklyn Plans, Kristen Euretig, as she explains what the various federal aid programs mean for you. 

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Below are the topics each video will explore and when you can expect to see them throughout Financial Literacy Month:

1) Assistance checks: April 13, 2020

Perhaps you’ve heard the government will be disbursing direct payments to individuals and married couples. In this video, we’ll discuss exact dollar amounts, timing and qualification thresholds so you know what help may be coming your way.

2) Housing/utilities/credit card payment relief: April 16, 2020

The coronavirus stimulus bill provides substantial aid centered around housing protections against foreclosures on mortgages and evictions for renters. Kristen will discuss policies that address failure to pay rent or mortgages, deferred credit card payments and protections for utility shutoffs.

3) Student loans: April 21, 2020

As part of the $2 trillion coronavirus stimulus bill, The Department of Education will suspend student loan payments, without penalty, through September 30, 2020. Kristen breaks down what that means for student loan borrowers.

4) Credit score: April 23, 2020

Kristen talks us through best practices for keeping your credit score high — even during a financial crisis.

5) Savings: April 28, 2020

Kristen walks us through her tips for saving and shares her advice for achieving financial stability during a financial crisis.

6) Unemployment: April 30, 2020

The record 10 million unemployed or furloughed Americans can thankfully seek relief through unprecedented expansions of unemployment benefits as part of the CARES Act. From increased weekly stipends to extended benefit durations, Kristen helps us understand what we can expect.

DailyPay feels that every American should have access to tools and resources to help them on their path to financial wellness and stability. During these challenging times, we know it’s more important than ever. We hope you’ll tune in and find the series helpful in understanding and leveraging the assistance available to you through the CARES Act.

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DailyPay is not a financial or investment advisor. The materials presented herein and in the video series are for informational purposes only and should not be relied upon as financial advice. Decisions based on information provided here and in the video series are the sole responsibility of the reader/viewer.

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What employers and businesses need to know about the recently passed $2 trillion coronavirus stimulus bill

Matthew Kopko, VP of Public Policy at DailyPay summarizes the CARES Act and the impacts it will have on your business and its employees. This on-demand webinar will provide:

  1. Easily understand the specifics about the largest financial relief package ever passed in history
  2. Determine how both small and large employers are able to get loans, and which loans can be forgiven
  3. Be aware of additional provisions on tax credits and paid leave requirements including payroll tax deferral
  4. Take away a solid understanding of how the CARES Act will impact your employees or recently let-go employees directly

NOTE: None of the content on this page or in this video is intended to be legal or tax advice, and should not be relied upon as such. You should consult with your own attorneys, accountants and advisors.

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We’ve summarized some of the video contents below:

Coronavirus Aid, Relief, and Economic Security Act

  • The bill itself is technically called the Coronavirus Aid Relief and Economic Security Act or the CARES Act. It’s also known as HR 748.
  • It’s also called Phase 3 of the coronavirus response legislation (phases 1 and 2 covered immediate government disaster relief and paid leave restrictions)

Coronavirus Aid, Relief, and Economic Security Act: Overview 

  • But first let’s go over the CARES Act. This is the overview of the general sections of the CARES act. Particularly, we’ll be focusing in this segment on Titles I, II, and IV because they include the provisions that are most relevant to employers and contain the marquee programs relevant to the private markets. There are additional sections of the act, for example, Title III, which includes a lot of information on improvements to the health care system in the fight against the coronavirus 
  • And also Title V, which has a coronavirus relief fund, including grants to hospitals, airlines and other types of programs. There are other miscellaneous provisions as well but, again, we’ll be focusing on the loan and other programs that are relevant to employers and workers. 
  • So first let’s get into Title I.

Title I: Keeping American Workers Paid & Employed Act: Overview 

  • Is commonly called the small business loan section. It’s also called the Keeping American Workers Paid and Employed Act 
  • This is the marquee $350 billion loan program and, in general, the goal here is to provide loans to small companies so that they can keep operating and keep their workers on payroll during this crisis. 
  • And to effectuate that, not only is it a favorable government loan, but it is a forgivable loan to the extent you keep your employees hired, or rehire them by June 30th, and use loan proceeds to pay eligible expenses like payroll, rent and utilities. 
  • Another interesting feature of this program is the fact that it’s not issued directly by the government, but instead through a partnership with the private financial markets. So, instead of applying to the Small Business Administration, you would apply to one of many major local banks to be able to get access to this loan program.

Title I: Who is Eligible

  • First let’s talk about who is eligible. Again, this is called the small business loan program, so generally small businesses are eligible. This is defined as businesses that generally employ 500 or fewer employees.
  • One major exception, which impacts a particularly hard-hit segment of the economy during this crisis, are hotels and restaurants and similar businesses who classify themselves under NAICS Code 72. For them, even if they have more than 500 employees, they will still be eligible to the extent that they have no more than 500 employees in any single location.

Title I: Loan Size

  • The general rule of thumb under the small business loan program in Title 1 is that you’re entitled to a loan of approximately 2.5 times your average prior monthly payroll capped, in any event, at $10 million.
  • For most businesses, it’s defined as the average monthly payroll for the 12 months prior to when the loan is made. There are exceptions for seasonal employees or recently created businesses that have different time periods for measuring prior average monthly payroll.

Title I: Borrower Requirements

  • Borrowers requirements are very minimal and there is explicit increased eligibility in the Act itself but borrowers will need to be able to certify in good faith that the loan is needed because of the coronavirus pandemic; that the funds will be used for eligible loan purposes for payroll, mortgages, lease rental payments and utilities; that they do not have any double-dipping applications pending before the government; or that they are not receiving any duplicate payments. 

Title I: Eligible Use of Proceeds

  • If you’re successful in getting a loan, there are only certain types of things that the loan can be used to pay. The most critical item is, of course, payroll costs. 
  • A couple things to note about the payroll cost requirements are that they include all forms of employee compensation, not just wages. So, that would include salaries, commissions, severance, leave or other types of compensation arrangements. But for any individual employee they are capped at $100,000 per year, on a prorated basis. So, that means to the extent you have employees earning more than $100,000 in a given year, you are able to use the proceeds to pay their compensation up to $100,000 and, after that, they would not be an eligible expense with the loan proceeds. 
  • Additionally eligible use of proceeds include certain group benefits like healthcare, interest on any mortgages related to the business, rent payments for your office space or other facilities, utilities, and, also important, interest on any existing debt obligations. 

Title I: Loan Forgiveness/Deferral

  • Most critical to this loan program is the concept of loan forgiveness. In essence, if you are able to manage this loan process effectively, either a large portion or potentially all of the loan you get will be able to be forgiven by the federal government and you will have no liability to repay the loan.
  • Loan forgiveness is provided under the Title I program for eligible costs of payroll, interest on mortgages, rent and utility payments. Again, the restrictions on $100,000 per employee apply, but to the extent you are paying payroll, interest, rent or utilities, and you can document those payments, you are able to get forgiveness to the extent of those payments and potentially get forgiveness of the entire loan. 
  • If you fire people during this process and your average FTEs shrinks during the period you have the loan and afterward, the amount of forgiveness will be reduced relatively to the number of employees you have currently, as opposed to the number of employees that you had right before the pandemic hit. Similarly, to the extent you cut wages of your employees by more than 25%, you also have reduced forgiveness benefit. 
  • The program also includes loan deferral. Applicants are presumed to be entitled to at least a six-month deferral of all payments, fees, principal and interest. That can be expanded up to 12 months, but it’s going to be at the discretion of the Small Business Administration and your lender.

Title I: Documentation for Loan Forgiveness

  • When it comes time to seek the actual loan forgiveness, be sure to keep good records, because your lender and the government will require documentation showing how many employees you have and pay stubs and pay rates to ensure that the payroll payments qualified under the restrictions under the loan program. So, you’ll be able to keep your IRS pay stubs and other type of critical payroll documentation to show payroll payments.
  • Additionally, to the extent there are other qualified expenses, like rent, mortgages or utility payments, you will have to document that as well. On top of all of this, a business executive will have to certify that the documentation is true and correct and not fraudulent, and that the loan was actually used to make eligible expenses such that forgiveness is legitimate.
  • As always, the government provides a provision that allows the government to request any additional information, and this case is no separate. 

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Title II: Relief for Workers Affected by Coronavirus Act

  • Title II is the section that covers individual benefits and business tax relief. As you’ll see in Subsection A and B, these are some of the most well-known programs that have been reported by the press. They include the $1200 and $2400 checks given to individuals and also the unemployment insurance top off.
  • Through the coronavirus stimulus bill, the federal government is expanding unemployment insurance by adding a federal increase of $600 per week on top of state benefits. 
  • Additionally, since most independent contractors and gig workers are typically ineligible for unemployment assistance, this bill allows such contractors to be able to be eligible for assistance through the unemployment insurance provisions of this bill. 
  • In Subsection B, large numbers of Americans will be able to get $1200 checks, per individual, and $500 checks, per child, as critical spending money to get them through this crisis. 
  • To the extent you earn $75,000 or less, you will get the full check and the check will be phased out between $75,000 to $99,000, such that anyone earning more than $100,000 will not be entitled to get any of these payments. 
  • There are also other tax provisions that have been modified through this act that are beneficial to the individual, including educational assistance provisions and relaxation of charitable contribution restrictions. 

Title II, Subsection C: Payroll Tax Credit

  • To the extent you’re impacted by the coronavirus pandemic, you’ll be able to get a credit of the amount of 50% after the first $10,000 per employee for employees that are impacted by the crisis. If you have less than 100 employees, all employees will be eligible, but if you have more than 100 employees, only employees that are being paid but are unable to work, will be eligible for this type of credit. 
  • To ensure against double dipping to the extent you take advantage of the forgivable Title I loan program, you will not be eligible for these tax credits. 

Title II, Subsection C: Payroll Tax Deferral 

  • The bill also includes a payroll tax deferral for the tax year 2020. To the extent you’re an employer and paying payroll taxes, you will have no tax liability for payroll taxes in the year 2020, and they will instead be paid in 2021 and 2022. That means that 50% of the payroll tax obligation, instead of being due for the tax year 2020, will be due in 2021, and the other 50% will be due in 2022. 

Title II, Subsection C: Other Provisions

  • There are also other tax provisions that have been modified under this Title II of the stimulus bill and they include suspension of loss limitations for the Tax Cut and Jobs Act, which will impact your net operating loss provisions and mechanisms, and also a change to the corporate AMT. 
  • There are also other technical changes, but they are not the subject of this summary 

Title IV Coronavirus Economic Stabilization Act of 2020

  • In addition to the $350 billion small business loan program, there is a $500 billion loan program intended for larger employers. About $50 billion of that loan program is specifically earmarked for airlines, cargo carriers and national security-sensitive companies, or more commonly thought of as the Boeing exemption. 
  • The other $450 billion of the loan program is available generally to larger businesses.
  • This is administered by the Treasury Secretary in coordination with the Federal Reserve and there is no loan forgiveness. 
  • Eligible borrowers under the large loan facility will be typically U.S.-domiciled companies with employees that are principally based in the United States.
  • The loan term will be not more than five years and there are very favorable interest rates at which you’ll be able to get the loan. For the special industry loans, that is national security and airlines, the government will also require warrants to be issued in the government’s name.

Title IV: Restrictions for Borrowers

  • There are lots of restrictions that come along with taking advantage of this loan program. 
  • Firstly, you’re not able to issue dividends or stock buybacks or other capital distributions for the duration of the loan and for a full year after.
  • Secondly, you’re going to be obligated to maintain at least 90% of your existing work base as, again, the main purpose of this entire program is to ensure that workers are not fired during this crisis. 
  • You’re also not allowed to transfer proceeds of the loan to any offshore affiliate, and there are limitations on compensation for high-paid employees and very high-paid employees. 
  • There are even further restrictions to the extent you’re taking advantage of the very low interest rate loans. In addition to having to maintain 90% of your workforce you’ll have to agree to commit no outsourcing, not just for the term of the loan but for two years after, and then, importantly, you’re not allowed to abrogate any labor agreements and to the extent any labor dispute or unionization efforts spring up, you will have to maintain neutral, not just for the period of the loan but again for two years thereafter. 

Title IV: Additional Airline & Banking Provisions

  • There are special provisions that we won’t cover in detail that cover specifically the airlines and banks. 
  • Airlines, for example, are required to maintain air service in smaller communities and healthcare supply chains. 
  • There are a variety of changes to bank rules that allow for flexibility during this crisis. 

Title IV: Consumer Forbearance

  • Title IV also includes very important and valuable consumer forbearance rules. 
  • For customers of banks who receive loan modifications or forbearance, they will not get adverse credit reporting.
  • There is also a foreclosure moratorium and forbearance on individual mortgages, which is not forgiveness of mortgage payments, but it is forbearance, and there are more restrictive and smaller forbearance for multifamily properties. 
  • There is a 120-day moratorium on evictions, so that people who are behind on rent payments are not going to be kicked out of their apartments during this crisis. 

Phase II Bill: Coronavirus Paid Leave Requirements

  • We’d also like to touch briefly on the paid leave requirements passed under the previous phase of the legislation also called Phase II.
  • This was technically called the Families First Coronavirus Response Act and was passed several weeks ago and is becoming effective, April 1, 2020. 
  • It generally has two paid leave requirements: 1) Emergency paid sick leave and 2) Emergency Family and Medical Leave Act expansion. 
  • We’ll also be covering in this section one example of state laws – New York, though state reactions to the crisis vary and obligations for leave vary by state. 

Coronavirus Paid Leave Requirements: Emergency Paid Sick Leave

  • Emergency paid sick leave covers employers with fewer than 500 employees, who have employees who are not able to work, and who are meeting one of the six technical coronavirus-related criteria, for example, if you have to take care of your children because school closings or childcare closings have occurred.
  • The paid sick leave is limited to 80 hours of paid sick leave per full-time employee and for part-timers based on recent work. So 80 hours or the equivalent of two weeks. 
  • For those directly quarantined by COVID-19, their regular required rate of up to $511 per day will have to be covered. 
  • For other people in different categories, a smaller amount, up to $200 per day, will have to be covered. And although it is controversial, healthcare employers are generally exempted from this requirement due to the work requirements in healthcare facilities at this time.

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Coronavirus Paid Leave Requirements: Family Medical Leave Act

  • Family Medical Leave Act Expansion generally covers employers with fewer than 500 employees and for those employees who are not able to work and who now qualify for the Family Medical Leave Act, having to care for their children because they’re out of school. 
  • Employees can be eligible for up to 10 weeks of Family Medical Leave following the first 10-day leave period provided for in the previous slide. 
  • The required amount to be paid under this part of the bill is generally 2/3 of the regular pay rate up to $200 a day and $10,000 in the aggregate. 
  • And again, healthcare employers are generally exempted from this requirement. 

Coronavirus Paid Sick Leave Requirements in New York 

  • New York also passed its own leave modification requirements in the middle of March. 
  • It covers almost all New York employers, but those who are subject to a mandatory or precautionary order of quarantine who cannot work. 
  • New York employers with more than 99 employees must pay 14 days of paid leave to covered workers. 
  • Smaller employers have to cover 5 days of paid leave at a regular pay rate.

Key Takeaways 

  • Small and some not so small businesses can now get multi-million dollar loans from the federal government and potentially some, or all, of those loans can be forgiven. 
  • Large employers are also able to get loans, but they must maintain their workforce and there is no forgiveness. 
  • There are a variety of tax credits as well and a payroll tax deferral for employers. 
  • This bill also includes the well-known stimulus check provisions that provide direct checks to individuals and substantial grant programs for hospital, airlines and other industries. 

About DailyPay

  • DailyPay is a major way to preserve employee financial health and wellness in the long and short term. 
  • By providing our on-demand pay benefit, partners across the country have been supporting their employee financial wellness and increasing retention of their employees. 
  • Employers across the economy love being able to provide their employees the benefit to be paid daily instead of once or twice a month when it’s convenient for their employer.

If you’d like to be able to offer DailyPay to your employees, and take advantage of all the fee waivers and other benefits we are offering to workers during this crisis, please reach out to our team. We’d love to work with you and we’d love to bring you and your employees into the DailyPayNation. Thank you very much.

COVID-19 Notice: DailyPay has waived all next-day transfer fees so that employees can access their earned and unpaid earnings when they need it, until further notice. We are committed to getting your company up and running as quickly as you’re willing to move, so reach out to our team at joinus@dailypay.com today.

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Responding to the New Normal — WFH Culture

DailyPay is a company that works with employers all across America to enable their employees to access their pay whenever they want, without having to wait for payday. Our mission is to create a powerful employee experience with pay.

Many companies have an external mission that is amazing, but the internal culture is very different. Not at DailyPay! Our Founder and CEO, Jason Lee, is committed to ensuring that we live the experience we sell. That became very apparent when the COVID-19 crisis hit. 

A week ago, our CEO called a leadership meeting to discuss what was about to be our new normal — the need for our staff to work from home, for their safety, without letting our service slip at all. 

We took proactive measures to implement a 25% work from home test as part of our Business Continuity Plan. During this test, a few guidelines were put into place to ensure a positive experience: 

  • We designated a Head of Employee Experience to ensure we kept our employees needs top of mind
  • Every employee was assigned a virtual phone number that also supported video
  • Employees working from home still received our current $17 lunch stipend/Seamless.com delivery

  • Any equipment needed for a home office was supplied
  • All in-person meetings were shifted to ensure virtual access
  • Every employee was offered DailyPay for DailyPay in case people needed early access to their earned income

When DailyPay needed to shift to a 100% work-from-home schedule, all of these perks stayed in place and we added many more: 

  • Deliverables became due on dates, not times, to accommodate for the need to work odd hours, while simultaneously managing remote schooling and other efforts.
  • Daily video check-ins were set up for 12:30 every day to keep an in-person company culture. During these meetings, we play games, create video tours of our homes, hold St. Patrick’s day spirit competitions, and have virtual watercooler conversations. 
  • We hired a virtual personal trainer to provide both fitness tips and nutritional advice.
  • Many senior execs send video updates and emails throughout the day.
  • Our many, many slack channels allow every employee to “eavesdrop” on what is happening with other groups, our client partners and more.

As we began to navigate this uncharted territory, we vowed to over-communicate and overcompensate. This is a challenging time, but one that is truly strengthening our sense of community. We will continue to monitor the individual and collective needs of our workforce throughout this process.

“The financial health of every working American is the reason we come to work every day,” said Jason Lee, CEO of DailyPay, “I strive to ensure that our operations remain 100% solid during this time of crisis, and that every DailyPay employee is capable of delivering 100% of their attention to our client partners, without interruption or fail during this time. Our team has done an exceptional job in creating a communicative and positive environment, so we can all work together and create success.”

“The truth about the strength of a brand is often exposed during the most challenging of times,” said Jeanniey Mullen, Chief Innovation and Marketing Officer of DailyPay. “DailyPay is a powerful example of what every brand should aspire to achieve. Authentic, inspirational and relatable methods, communications and employee engagement, even though our individual employees have never been physically father apart from each other, or our client partners. As we all continue to find our way through this pandemic, I am confident that the DailyPay team will emerge as a guiding light with positive impact on the future.”

“At DailyPay, we are dedicated to placing an enhanced focus on our employees’ day-to-day experiences,” said Taylor Paone, Employee Experience and Culture Manager at DailyPay. “It is my top priority to anticipate the needs of our workforce and ensure that they are having a great experience. As I walk around the office and see each of their faces, I’m able to address those needs in real time, but when we moved to virtual, I challenged myself to make it even better. We are working that much harder to make sure we strengthen our sense of community by creating a positive and enjoyable virtual environment.”

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DailyPay on Workforce Activity Impact During COVID-19 Crisis

by Alexey Nefedov, PhD, Lead Data Scientist, DailyPay 

UPDATE April 27, 2020

Here’s the latest update on the latest DailyPay Workforce Index statistics: We are seeing a decline in the number of working employees for Call Centers and HospitalsFor QSR, we are seeing signs of a slight increase in the number of working employees.For Supermarkets, numbers for this week look pretty similar to the previous week.On April 22, 11% of all advances that indicated a specified reason were related to COVID-19.

We’d also like to report results from a recent DailyPay survey that indicated that 16% of all respondents applied to their current jobs because they offer DailyPay. Over half of those respondents work in the on-demand space for companies like BiteSquad, EatStreet, Waitr and G4S with the remainder primarily working in health care or home care.

UPDATE April 16, 2020

Here’s the latest update on the latest DailyPay Workforce Index statistics:This week, three industries — Call Centers, Hospitals and Supermarkets — continued to show a decline in the number of working employees.
On April 15, 13% of all advances that indicated a specified reason were still related to COVID-19 crisis.

UPDATE April 6, 2020

We want to provide you with an update on the latest DailyPay Workforce Index statistics: During the past week (Mar 29 – Apr 4), all four industries — Call Centers, Hospitals, QSR and Supermarkets — continued to show declining numbers of working employees.
Call centers showed the strongest, double-digit decline. They were followed by Hospitals, Supermarkets and QSR, which showed weaker, single-digit declining trends.
On April 3, 13% of all advances that indicated a specified reason were related to COVID-19 crisis.

All four industries are showing declines in working employees, due to reasons likely to be caused by direct and indirect impact of coronavirus (layoffs, restructuring, quarantine, sickness and anxiety). While it seems to be counterintuitive that the number of working healthcare employees is declining, we are speculating that many healthcare workers who are not actively engaged in the treatment of COVID-19 patients are asked to stay at home.

Every employer in the United States is taking drastic action when it comes to safeguarding the health and well-being of their employees and their families as we work through the COVID-19 pandemic. We see that this is starting to have a dramatic impact on millions of people in the workforce, especially the hourly worker. I have picked DailyPay partners from four industries — Hospitals, Call Centers, Supermarkets and QSR — as a starting point to determine if there are changes in the hours worked by employees, the number of employees working, and the reasons why these employees are accessing their earned income before their company’s scheduled payday. I want to share some insights with you so you can get a better understanding of the impact this is having on all of us.

Looking at these four industries and DailyPay usage reasons, we are starting to see various changes that differ greatly by industry. We’ve summarized our observations below (fully anonymized), as well as in a report of more detailed industry trends. We expect to refresh this data periodically.

  • This week, all four industries — Call Centers, Hospitals, QSR and Supermarkets — showed double digit decline in the number of working employees in comparison with the previous week
  • Additionally, QSR and Supermarkets continued to show decreasing average hours worked by employees
  • On March 26, 16% of all made advances with specified reason were related to COVID-19 crisis.

To support the ability for all working Americans to have access to funds they need, when they need it, on March 17th, DailyPay announced that we would waive early access fees. We encourage all employers to take actions like these to enable employees to have access to their earned income as it is needed. After all, the shelves at the grocery stores don’t wait for payday.

To help our partners and all employers, we’re hosting a webinar titled, “Supporting Your Workforce’s Financial Security Through the COVID-19 Crisis” on Tuesday, March 24th. We’re in active discussions with the APA and HR associations regarding ways to support all employers and employees through this. We are all in this together. Let’s do something positive for everyone.

Stay safe and healthy. Thank you — Alexey

nefedov

          Alexey Nefedov

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