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HOME --> Member Exclusive: ACMA’s Beltway Report – Updates on COVID-19 Federal Response Legislation

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Member Exclusive: ACMA’s Beltway Report – Updates on COVID-19 Federal Response Legislation

 

March 20, 2020

By Brian Johnson, The Vogel Group

 

Below is a summary of the main business questions and impacts from Phase I and Phase II of the COVID-19 stimulus packages that are now law, as well as some information on the forthcoming Phase III. Some common questions and concerns appear in italics; answers follow.

Phase I – Signed into Law: A Q&A for Small Businesses

I’m worried my small business will have to close due to financial issues. Will there be more assistance?

Secretary Mnuchin has made clear immediate assistance is on the way. Moreover, H.R. 6047— the first Coronavirus bill— allowed $1 billion in loan subsidies to be made available to help small businesses, small agricultural cooperatives, small aquaculture producers, and nonprofit organizations which have been impacted by financial losses as a result of the coronavirus outbreak. This funding could enable the Small Business Administration to provide an estimated $7 billion in loans to these entities. In addition, provides $20 million to administer these loans.

Phase II – Signed into Law: A Q&A for Small Businesses

My small business can’t afford to pay sick leave. What happens?

H.R. 6201— the second Coronavirus bill, as passed by the House — includes a refundable payroll tax credit to reimburse—dollar-for-dollar—local businesses for paid sick leave and family and medical leave wages paid to employees that are affected by COVID-19. Click here for an explanation of who is eligible and for what amounts. Click here to see a chart of this bill.

The leave is fully funded by the tax credit, but my small business will be interrupted by cash flow issues.

H.R. 6201 provides significant relief to businesses that otherwise may not be able to afford the employee costs associated with coronavirus-related paid leave.  Treasury has broad regulatory authority to advance funds to employers to protect businesses concerned about cash flow.  In a March 14thpress release, Treasury stated that “employers will be able to use cash deposited with the IRS to pay sick leave wages.  Additionally, for businesses that would not have sufficient taxes to draw from, Treasury will use its regulatory authority to make advances to small businesses to cover such costs.”

The legislation exempts businesses with more than 500 employees from mandated paid leave while imposing the requirement on small- and medium-sized job creators.

The benefits under H.R. 6201 are not an expense for the business, rather it operates as a benefit to both the worker and the employer.  The legislation will ensure that every dollar of leave that an employer is required to pay is reimbursed—dollar-for-dollar—by the federal government.  It will allow workers to care for themselves and loved ones impacted by coronavirus.  Additionally, the credit will help businesses to stay up and running.  After all, workers who knowingly show up sick jeopardize the health of coworkers and business operations.

Nearly 90% of businesses with more than 500 employees offer paid sick leave to their full-time workers.  To facilitate more universal coverage of paid sick leave, H.R. 6201 provides temporary federal coverage for paid sick and family leave to all employers with fewer than 500 employees.

Does the bill mandate an unaffordable extension of FMLA on my small business?

H.R. 6201 as passed by the House permits the Secretary of Labor to exempt businesses with fewer than 50 employees from the longer-term mandate where it creates significant hardship.

How did the “technical fix” ensure that the tax credit will meet the liability of small business?

For every dollar that employers pay for coronavirus-related sick leave costs—both under Emergency Family Medical Leave and Emergency Paid Sick Leave—the bill provides a dollar in refundable tax credits.

The technical fix also empowers the Secretary of Treasury to ensure cash flow for small business:

The Secretary of Treasury now has authority to protect small businesses from cash flow problems by issuing guidance to provide those in need with advanced refunds of the tax credit.

And the Secretary of Labor is able to provide flexibility small businesses with fewer than 50 employees:

The Secretary of Labor now has authority make exceptions for small businesses with fewer than 50 employees to prevent emergency paid leave from causing hardship.

Mandatory Employer Paid Sick and Family and Medical Leave

How do employees find out if they can receive sick leave?

H.R. 6201— the second Coronavirus bill, as passed the House— requires employers to provide notice of eligibility to employees. The Department of Labor is required to create model notification within 7 days after enactment of the bill.

Unemployment Insurance

How does the H.R. 6201 support states that are experiencing a spike in claim for unemployment benefits due to COVID-19 layoffs and business closings?

The bill immediately provides $500 million in emergency administrative grants to increase state capacity to process unemployment applications and make payments. It also makes an additional $500 million available to states that experience a 10% percent increase in unemployment to provide 100% federally funded benefits to provide extra weeks of benefits.

CRS has released a 3-page explainer document that reviews the paid leave and unemployment insurance provisions here.

Find more information H.R.6201 – Families First Coronavirus Response Act: 

Phase III – expected to pass within the upcoming week:

Draft provisions of Phase III include the small business loan packages and contain the following:

  • Individual payments (aka checks) are $1200 per person with an additional $500 per child. Phase out begins at $75,000 individuals and $150,000 joint filers.
  • Individual tax return filing is delayed to July 15, estimated payments delayed until Oct 15.
  • Retirement withdrawal rules are relaxed for withdrawals under $100,000. Liability is spread over three years.
  • Creation of a partial above-the-line deduction for charities, capped at $300 only available for standard deduction, non-itemized.
  • Business estimated tax filing payments are delayed until Oct 15. Employer payroll tax deposits can be delayed until Jan 1, 2021.
  • NOL carrybacks for up to five years.
  • Interest deduction cap gets some help – goes from 30% of EBITDA to 50% of EBITDA.
  • QIP technical fix included as well.
  • Some changes to rules governing CFCs also.

 

About the Author:
A principal at The Vogel Group, Mr. Johnson provides clients with a comprehensive strategy to tackle Capitol Hill, the Administration and agencies. He is instrumental as a senior leader of the firm’s government affairs practice and averages over 500 Congressional meetings a year and countless pieces of legislation introduced on behalf of clients. As a policy expert he has testified before Congress and his expert commentary has been featured on BBC, CNN, C-SPAN, Fox News, Fox Business News, PBS, and many more. He can be reached at brian@vogelgroupdc.com.

ACMA Contacts:
Paul Miller, vice president & deputy director, 914-669-8391, pmiller@catalogmailers.org
Hamilton Davison, president & executive director, 800-509-9514, hdavison@catalogmailers.org

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Lynn Noble

President & Executive Director

New Member Development & Acquisition; Postal Affairs

Lynn Noble is ACMA’s Vice President, Industry Relations, having joined the ACMA in May 2015, following an extensive direct marketing career in private industry as well as the US Postal Service. He is responsible for leading the membership development efforts for the ACMA through new member acquisitions and providing enhanced member value.

Throughout his career, Lynn has held key marketing & sales positions with several leading direct marketers, as well as several high-level management positions with the US Postal Service.

In 2009, at the request of the ACMA, the US Postal Service initiated a new position of Catalog Manager to lead the Service’s efforts to stabilize and grow the catalog industry. Lynn returned to the USPS to lead those efforts and was instrumental to developing a stronger industry partnership between the Postal Service and the catalog industry. Serving as the product manager for catalogs, Lynn helped to raise the awareness of catalog-specific business challenges within the executive ranks of the USPS. During his tenure, the ACMA and catalog companies enjoyed a collaborative and progressive environment that produced more stabilized rates and inclusion in key USPS promotional opportunities.

Just prior to joining the ACMA Lynn was the USPS’s Manager, Strategic Account Operations, leading a team of senior sales professionals who focused exclusively in the Catalog, Mail Order, and E-commerce arena. In addition to his Postal positions, Lynn previously held key positions with leading direct marketing companies, including Cox Target Media, Market Logic, Catalina Marketing, Freesamples.com, and Advantage Direct.

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Named Vice President & Deputy Director in January 2010, Miller came to the ACMA following a lengthy career of more than two decades following the catalog/multichannel/e-commerce/retail businesses. Reporting to ACMA president & executive director Hamilton Davison, Miller oversees marketing and communications, membership development, and organizes and oversees ACMA’s National Catalog Forum, while working with Davison on most of ACMA’s postal-related efforts.

Miller started his career as a reporter with Catalog Showroom Business, following a form of retailing that was led by the likes of the Service Merchandise and Best Products retail chains.

After several years of editor/reporter roles with business magazines that followed the toy and gift industries, Miller was named associate editor of Catalog Age magazine (now Multichannel Merchant) in 1986. He rose up the ranks at Catalog Age over the next 18 years to be the magazine’s senior news editor.

Beginning in the late ’80s, Miller became Catalog Age’s postal beat reporter, where he’d follow key postal events and pull out the key catalog mail-related issues for readers. During that time, he attended many Mailers Technical Advisory Committee (MTAC) meetings and National Postal forums.

After leaving Catalog Age in 2004, Miller consulted with several catalogers and multichannel suppliers for a time, he was named news/website editor at Commercial Property News. Less than a year later, he was asked to take the reigns at Catalog Success (now All About ROI) where he served as editor-in- chief from 2006 till the end of 2009.

 

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ACMA appointed Michael K. Plunkett as its President and Executive Director in January 2024, succeeding founder Hamilton Davison. Mr. Davison moved on to own and run a company. Mr. Plunkett brings years of executive leadership experience having been the President and CEO of the Association for Postal Commerce (PostCom) since 2017.  In the newly-formed dual role, he will continue his current role with PostCom and the two organizations will operate separately.

During his tenure, PostCom has continued to lead the mailing and shipping industry on policy and regulatory matters and to work with Government agency partners to advance issues of importance to members. Mr. Plunkett is also President of the Delivery Technology Advocacy Council, a nonprofit launched in 2020 to concentrate on delivery and logistics technologies.

Prior to PostCom, Mr. Plunkett accumulated more than 25 years Postal experience with the United States Postal Service in numerous executive roles in operations, marketing, product development and pricing.  As a leader within the Postal Service’s management team, Mr. Plunkett developed a well-earned reputation for innovation by leading efforts to develop pricing agreements for domestic services and in the development of the forever stamp and the priority mail flat rate box.

Mr. Plunkett has testified on pricing and policy issues before the Postal Regulatory Commission and Congressional subcommittees.  He has authored and presented papers on postal policies, economics, and operations for National and International conferences.

Mr. Plunkett holds Masters Degrees in Business from the Wharton School at the University of Pennsylvania and the Massachusetts Institute of Technology, where he was a Sloan Fellow. He earned a Bachelor Degrees in Economics and Finance from the Pennsylvania State University.