Dear Chamber Members,
Today’s COVID-19 business information compiled by your Greater Sumter Chamber Team includes: SC Chamber Testifies at SC House COVID-19 Small Business Regulatory Relief Committee, Paycheck Protection Program Forgiveness Application Released, Status of SC Unemployment Insurance (UI) Claims and Payments
Coming Soon: Webinars For Small Business. The Greater Sumter Chamber of Commerce will be partnering to host several webinars for Small Businesses. Check out our website soon for all registration information.
SC Chamber Testifies at SC House Committee: Monday, SC Chamber President & CEO Ted Pitts testified before the SC House of Representatives COVID-19 Small Business Regulatory Relief Committee. This Committee, Chaired by Representative Jeff Bradley, is looking at best practices and potential legislation that will help reopen the economy and get businesses back on track.
In his testimony, Ted referenced three steps that the General Assembly should take to move the needle for small businesses in the state:
- Reduce the Effects of Unemployment Insurance Costs on Businesses:
- Hold Harmless for Layoffs through the End of 2020. Establish that any layoffs resulting from COVID-19 for the entirety of 2020 will not affect a business’s experience rating for unemployment insurance (Note: current SC law allows for this to occur during a state of emergency, but the state of emergency will likely end before the economy begins to recover).
- Mitigate Impacts on Businesses from Unemployment Trust Fund Insolvency. The General Assembly should allocate a portion of the $1.9 billion of Coronavirus Aid, Relief, and Economic Security (CARES) Act money for South Carolina toward supplementing the depleting Unemployment Insurance Trust Fund to lessen the tax burden on businesses.
- Allow E-Notarization for Business Transactions. Because social distancing has severely restricted physical interactions, small businesses, like financial advisors and real estate agents, have found it incredibly challenging to conduct financial and real estate transactions requiring notarizations. Currently, 23 other states allow e-notarization, and many governors have ordered it by executive order. S.486, which presently resides in a House Judiciary Subcommittee, should be passed as soon as possible to allow businesses that rely on notarizations to continue to conduct business for their clients.
- Targeted and Limited Liability Protections. Protect businesses and industries acting in good faith and following federal and state laws and guidelines. Do this by clarifying workers’ compensation exclusivity and barring other liability from exposure or injury related to COVID-19 at a workplace or business absent clear and convincing evidence of gross negligence, willful misconduct, or intentional infliction of harm exists. These protections are needed at the state and federal level to cover potential state and federal claims and should be temporary.
The Committee also heard from representatives of the SC Farm Bureau, the SC Trucking Association, the National Federation of Independent Business (NFIB), and the SC Manufacturers Alliance (SCMA), many of whom advocated for liability protection for businesses as they reopen throughout the state.
You can find a full video of the committee meeting here.
Governor Signs Continuing Resolution: Today, Governor Henry McMaster signed H. 3411, the Continuing Resolution, into law. In addition to providing funding for state government at current fiscal year levels and certain immediate needs, this bill also provides that only the General Assembly has the authority to spend the $1.9 billion in CARES Act funding allocated to the state. As a result, the General Assembly will need to return into session soon to ensure they spend funding for critical needs promptly.
In a statement addressed to SC Senate President Harvey Peeler and SC House Speaker Jay Lucas announcing that he has signed this critical bill, Governor McMaster noted the urgency associated with the resolution saying:
“Shortly, based on many of the AccelerateSC recommendations, I will propose to the General Assembly a listing of priorities for appropriating CARES Act funds. These relief funds belong to the people of South Carolina, not politicians, and we must deliver them to where they are needed. Consideration for their appropriation must be done expeditiously – but also wisely, transparently, and with meticulous accountability. To that end – I ask that you call the General Assembly back into session soon after receiving these recommendations. Any delay will cost the people of our state the one thing they don’t have – time.”
As mentioned previously, recent guidance from the US Small Business Administration (SBA) clarified that businesses receiving a Payroll Protection Program (PPP) loan below $2 million are eligible for a safe harbor that deems they are making the loan request in good faith.
To recap: Loans below $2 million will not be subject to further review. While borrowers with loans greater than $2 million “may still have an adequate basis” for applying for a PPP loan based on their circumstances, but they will be subject to SBA review to determine the necessity of the loan request.
On Friday last week, the SBA and the US Department of the Treasury (Treasury) released the PPP loan forgiveness application, which includes detailed instructions on how to complete the application. In addition to guiding how to fill out the form, the application clarifies many frequently asked questions about loan forgiveness, including:
- What Constitutes Covered Payroll Costs
- What Constitutes Covered Non-Payroll Costs
- Required Documentation
The new instructions also add an exemption for loan forgiveness reduction for borrowers who have made a good faith effort to rehire employees, assuming the borrower can show written proof the job was offered and declined.
Newly released data from the South Carolina Department of Employment and Workforce (DEW) puts into perspective the current unemployment situation, comparing it to the period leading up to COVID-19 and to the last major economic crisis in 2009.
In early March of this year, before the state started seeing severe impacts from COVID-19, one of the biggest problems was finding employees for employers. The state had a 2.6% unemployment rate, about 2,100 initial claims filed per week, 2.3 million people employed, and about 61,900 unemployed.
As the chart below reflects, since the pandemic started impacting South Carolina in mid-March of this year, the pattern has been dramatically different than 2009. Whereas the initial claims per week followed a linear pattern during the Great Recession, the state saw a drastic increase in claims immediately following the initial COVID-19 impact, and the number of applications continued to go up for four more weeks – with a peak in claims occurring the week ending April 11th. Since that time, the number of initial claims has been falling off. Even so, the number of applications for the week ending May 9th is over three times higher than claims during the same week in 2009.
In terms of the amount paid out so far during the COVID-19 crisis, South Carolina has paid $306.7 million in regular state UI benefits. The federal government has paid $752.9 million in Federal Pandemic Unemployment Compensation (extra $600 per week) and $48.0 million in Pandemic Unemployment Assistance (benefits for independent contractors, self-employed, gig workers, etc.) to South Carolinians. This total adds up to $1.108 billion paid in UI benefits to South Carolinians since the onset of the crisis.
The SC Chamber and local Chambers of Commerce are working with DEW to monitor the impacts on the UI Trust Fund and implications for businesses moving forward, including lessening the tax burden on businesses resulting from the depletion of the trust fund.
These and other resources for businesses are available on our website here.
As always, we will keep you up-to-date on any further information as it becomes available. Please feel free to reach out to us here with questions or call our Small Business Hotline at 803-774-2402.