It's great to welcome to the program today, Jason Goldwater, who is a California attorney
who represents small and medium sized businesses throughout Southern California, advises businesses,
unemployment and labor issues and best practices.
Jason, great to have you on today.
Thanks, David.
Great to be here.
So let's start with in figuring out, you know, every day we hear this number of billions
of dollars is going out.
Everybody's getting twelve hundred bucks.
Unemployment's being boosted by six hundred dollars.
The paycheck protection plan, billions and billions and billions of dollars are going
out.
Let's start talking through what's been announced and what has happened.
So the twelve hundred dollars were close to two out of the three weeks that they said
it would take for that money to start going out.
Is there any system yet for people who did not get direct deposit of their tax returns
last year to say, here's how you get me my money?
Are any of these infrastructures in place at this point?
So they are not.
The IRS has said that they're going to create a portal on their website where people can
essentially go on and say, I want my money going to this man account or going to this
address.
So that has not happened yet, even though the private sector could probably do this
in under a day.
The IRS, I'd be very surprised if they managed to do it by next week.
And don't forget, it's not just people who didn't receive direct deposit, but maybe people
whose bank account information has changed, whose addresses have changed.
So none of that infrastructure is in place.
And like I said, I'd be very surprised if that happens by next week.
I think probably one to two months is more likely.
So two weeks ago, they said in three weeks, the people who have the same direct deposit
information as when they filed their tax returns would start getting their twelve hundred dollars.
The people who need to, as you say, provide banking information might have had a change
of address, et cetera.
It could be three more weeks.
That sounds like you're saying it's all a little bit optimistic right now.
Well, all right.
I mean, unless the IRS is going to start blindly sending out twelve hundred dollars to bank
accounts that, you know, just because something was correct on a 2010 tax return doesn't mean
that bank account has some effect can be closed.
I mean, they could be sending twelve hundred dollars really to a bank account that's not
open to someone else's bank account.
So I don't see how this is going to happen unless people first have a chance to confirm
that the information the IRS has is still correct from the information the IRS had potentially
a year and a half ago.
OK, so now let's talk about the the supplemented the the both bolstered boosted unemployment.
The idea was unemployment is, of course, managed at the state level.
Massachusetts has its system.
Illinois has its system, et cetera.
There are different state level benefits that are the maximum benefits available to people.
The federal government announced they would be supplementing those benefits with up to
six hundred dollars per week in additional funding.
Now, I know a lot of people who have been who filed for unemployment in the last three
weeks, a 16 million people did.
They, as of now, are not getting anything additional above and beyond what the state
provides.
What do we know about the rollout of that?
So as you just mentioned, everything is occurring on a state by state basis.
All I can tell you is there there's very there was very little information, actually, about
what is happening.
We know that there is supposed to be this additional $600.
We don't know when it's going to be implemented.
As you mentioned, each state has a different system.
And on top of that, the care is also provided that people who are self-employed, independent
contractors, for example, getting economy workers would also be eligible for unemployment
assistance.
Now, typically, if someone is self-employed or an independent contractor, there's typically
a voluntary unemployment insurance program that they can pay into to be eligible.
So the CARES Act does away with that.
But the problem is there is not a single state yet.
As far as I'm aware, that has implemented guidance as to how exactly this program will
work for people in the gig economy, for example, people who are self-employed and who is eligible
and how they're going to get their money.
And right now, the guidance essentially is for people to go out and apply and they'll
try to figure it out later.
And of course, it is important for people to get applications then, because the applications
will be processed in the order that they received and they will not get the unemployment insurance
until.
And so essentially for a period before they apply.
So I know some people in the Midwest who you know, there's a lot of states in the Midwest
that have they don't have very robust unemployment systems.
So they are maxing out sometime.
Three hundred and fifty dollars a week.
They're counting on that extra six hundred that the federal government says is coming
and it's not there and they're not getting any answers from the state unemployment departments
as to when that's going to start.
Yeah, I'm in California, I can tell you, maxes out at $450 per week.
So you can just think with our cost of living in San Francisco and Los Angeles and San Diego,
450 a week does not go very far at all.
And you're absolutely right that the six additional six hundred dollars absolutely critical.
But the state employment offices are used to processing a certain number of applications
per week.
And as you've pointed out, we've had an additional 50 and 60 million people applying for unemployment.
And the infrastructure is just not there to process those kinds of numbers.
So let's now.
Oh, sorry.
Go ahead.
Yeah.
But Jason, there is one thing I wanted to mention a lot of people are not aware of.
So this varies state by state.
But a lot of people who are underemployed right now, who have had their hours cut may
be eligible for unemployment assistance again, depending on the state, depending on what
their earning level is currently.
So it's important for people who are underemployed, who've had their hours cut to go ahead and
apply for unemployment insurance as well.
So then we've got the programs for businesses.
And part of this is the payment protection plan.
There's a couple of other programs and elements to these programs that are available every
day.
I'm sorry, what is it?
Elements of medical.
Yes, elements.
Elements of funding.
So every day at a press cut press briefing, Mike Pence or Donald Trump will say something
like, you know, a million people have applied or three thousand lenders are now taking applications
or we have processed 10 billion dollar every day.
It's different and the terminology being used is different.
Our business is actually getting money yet.
Have businesses received any money yet under that program?
So I am not aware personally of any businesses that who received money under the Paycheck
Protection Program or the emergency or economic injury disaster loan program.
So that doesn't mean it hasn't happened.
That just doesn't.
It just means that the rollout has not been very widespread.
There are still some banks like Citibank, which is my bank, that are not even accepting
applications and the money is already going to run out.
I mean, Bank of America on its own, I think as of a few days ago, they process, I think,
over 20 percent of the total funding available for the PDP program.
Meanwhile, Citibank is not even accepting applications.
So the whole again, the rollout here has been unfortunately a little bungled.
It's increasingly seeming to me.
And again, I hope that things can get reopened sooner than later as it's safe.
Never beyond what is safe.
But I hope things get going as soon as this is safe.
It's starting to seem like a lot of these funds may not even get to people before the
reopening starts if things continue on this path.
Yeah, I mean, you know, it's not just a question of reopening, but but by the time we're through
with the lockdown, frankly, there will be so much job loss.
And unfortunately, the job loss really is not just affecting at this point the hospitality
industries or the restaurant industries or economic industries, but it's affecting all
the other industries indirectly.
I mean, I can tell you as a lawyer, for example, the courts are closed.
So any laws were in litigation have no work right now, even if they did.
Businesses don't really want to be spending money on lawyers.
I mean, this is affecting every segment, every segment of society right now in the last bit
of time we have.
Is there any thing we have not talked about either in terms of programs or in terms of
what individuals can or should be doing that you think is important for people to know?
So I did want to talk briefly about the programs that are available because there have been
some changes to the program since they were initially announced.
So the first program that's available is the Economic Injury Disaster Loan Grant.
So the bill said and the Small Business Administration initially said that these were going to be
ten thousand dollar grants.
So the SBA has now changed that.
Now it's going to be one thousand dollar grant per employee that the business employs up
to ten thousand dollars.
So you can imagine a lot of small businesses may only be getting one or two thousand dollars.
For example, those loans will be processed in three days.
I don't know of any I mean, the link the application has been up probably for a week and a half
or two weeks.
And I don't know anyone who's gotten that.
You can apply directly for that on the.
A Web site if you Google SBA at 19.
The second part of that is the paycheck protection plan.
So that provides up to two and a half months of payroll and it's a loan at 1 percent.
Now initially it was zero point five percent.
Now it's 1 percent.
But the loan can be forgiven if 75 percent or more of the proceeds of the loan are spent
on payroll and your payroll does not decrease.
And individual banks are the ones processing those applications.
And then the third component are just ordinary Small Business Administration loans are called
7 8 loans.
And for new loans that are issued, the Small Business Administration has pledged to pay
six months of principal and interest on those loans.
And eventually you could get you could get a loan that might be a two year loan.
And in the first six months, the that those payments would be made for you and you would
not need to make that up.
Correct.
So theoretically, you could pay the principal back after six months minus the the principal
payments that have already been made on your behalf and you would not end up on any money
at all.
And of course, this is if you can actually get the money disbursed, which seems to be
a question mark around all of these programs right now.
Yeah.
I mean, I'll tell you that the ordinary SBA loans are a little easier to get just because
banks make more money on that.
The interest rates are substantially higher.
The young people he loans.
And so banks, although the difference with the 7a loans is that the banks do assume some
risk on that.
Usually from 25 to 50 percent or so.
So banks may be more reluctant and probably will be more reluctant to issue those loans
right now.
We will continue keeping an eye on it.
And of course, as important as the small business programs, the individual programs, unemployment
and the twelve hundred dollar deposits, which we are continuing to try to raise, the question
marks around, but question marks certainly remain.
Jason Goldwater's a California attorney.
Jason, thanks so much for talking to us and explaining all of these different elements.
Thank you, David.
Best of luck to you.