The DC Council just finished passing its first emergency legislation to respond to the COVID-19 outbreak and I wanted to share my first analysis.
A draft of the COVID-19 Response Emergency Amendment Act of 2020 can be found here, but a small set of the relevant provisions are as follows:
Section 101 - Unemployment - This expands unemployment compensation coverage to workers unemployed due to COVID-19. We remain convinced that the current unemployment compensation weekly benefits are inadequate (I had advocated strongly for a temporary doubling of them), but a number of important provisions did make it and we are quite pleased that, as we urged, the eligibility rules have been relaxed and displaced workers will be immediately covered. Additionally, the council directly included our suggestion not to charge the benefits paid to employees laid off due to this emergency against the experience rating accounts of employers. This long term protection will make us more viable moving forward.
Section 201 - Sales Tax - This delays February and March sales tax payment due dates until July 20, 2020. This allows businesses to retain working capital until we are back open.
Section 202 - Small Business Grant Program - I am exceptionally pleased that this made it into the final bill. My direct recommendations for support for our industry were for protections for our employees while they were laid off and immediate access to working capital for us to reopen. The grants will be issued to businesses that can demonstrate financial distress (all of us!) and can be used for Employee wages and benefits (including health insurance), Operating costs, and Repayment of SBA loans. Of important note, these grants should be applicable to all local businesses and may help gig workers and other self-employed people (think musicians, etc) that aren’t eligible for Unemployment Insurance. The details of the grant program are yet to be released, but the Harmony Group team is preparing all info we need to help apply for grant relief for you.
Section 302 - Health Insurance - It appears there will be grace periods for health insurance insurance payments, including temporary postponement of cancellations. I recommend working with your insurance agent to stay abreast of these changes (as well as any insurance modifications that are available).
Section 305-307 - Utility Disconnect Prohibitions - Utilities will not be able to disconnect us.
Section 308 - Eviction Prohibition - Landlords will not be able to evict us.
I am relieved to see that some of our suggestions made it into the final bill and that this has meaningful relief tools within it, but I want to emphasize that this is simply the first step in our work together to dig out of this crisis. We are watching for the grant application process to be released by the Mayor and my entire staff here at Harmony Group is standing by to work with our clients to secure every available resource. We all know that this whole situation sucks, but, to be honest, it's pretty special to see the entire business community - owners, vendors, banks, landlords, and government - starting to pull together in the same direction to get ourselves through this. I know everyone is dealing with challenges coming at them at light speed, so let’s keep focused on the task at hand: it is our job to get our businesses through this and have our businesses ready to reopen and get our City back to work. We’ve got this.
Matt Hetrick, CPA
President and Owner of CPA Eats