The Covid-19 pandemic has posed an unprecedented set of challenges for businesses of every size and scope.

When it comes to accessing government programs to assist businesses, professional employer organization (PEO) clients have fared better than their non-PEO counterparts in key areas; namely, the federal Payroll Protection Program (PPP) and Employee Retention Tax Credit (ERTC).

• The National Association of Professional Employer Organizations (NAPEO) has done comprehensive research, and found that PEO clients have been 18 percent more likely to have their 2020 PPP loans forgiven and 71 percent more likely to have received 2021 PPP loans.

About the PPP

The first round of PPP loans was announced in April 2020. In 2021, businesses that received 2020 PPP loans were entitled to apply for full loan forgiveness.

• As of July 2021, 81.2 percent of PEO client companies that received 2020 PPP loans had been granted full loan forgiveness. This compares to a forgiveness rate of 68.8 percent for comparable non-PEO businesses.

In 2021, the federal government funded a second round of PPP loans.

• 5 percent of 2021 PEO clients received these loans, compared to 17.8 percent of comparable non-PEO clients. As was the case in 2020, these loans are fully forgivable for companies that use the full amounts granted.

About the ERTC

The ERTC was designed to help small businesses weather the pandemic by enabling companies to keep people on their payrolls despite Covid-related hardships. Eligible companies were entitled to a refundable payroll tax credit equal to a percentage of wages.

Like the PPP, the guidelines for eligibility were complex. Furthermore, ERTC rules changed from 2020 to 2021. And because the ERTC has received less press coverage than the PPP, many small businesses may not even been aware of the program or its potential benefits.

• But PEO client companies were more in the loop.8 percent of PEO clients were at least somewhat familiar with the ERTC, compared to 49 percent of other small businesses.

PEO clients were less likely to take ERTC credits, both in 2020 and in 2021. Why? Perhaps because businesses that received PPP loans were initially considered ineligible for the ERTC. This was later changed retroactively. And, to qualify for the ERTC in 2020, a company had to have experienced at least one quarter where it had a revenue slump, compared to the same quarter in 2019, of at least 50 percent. The PPP by comparison required “only” a 25 percent decline.

When the law changed again to require only a 20 percent revenue decline for the ERTC in 2021, the gap of usage between PEO and non-PEOs closed significantly.

How to Keep Track of It All

Like many government programs, mandates and regulations, those pertinent to Covid-19 can be a lot to take in and manage on an ongoing basis. Yet, it’s crucially important to do so, in order to keep your business on solid growth and competitive ground.