Some Scioto County businesses are abusing the federal Paycheck Protection Program (PPP). There are several tactics they are using and we will bust open the back office doors and shine the light on this fraud. Our families, friends, and neighbors are suffering while a handful of these greedy business owners abuse their portion of the 669 billion-dollar COVID relief package that was designed to help them. Not only will we share some of the more popular schemes, but we will also give you the tools to report this fraud and attempt to set things right.
A PPP loan was designed to provide assistance for small businesses to keep their workers on the payroll. PPP loans are eligible for full or partial forgiveness if the money is used for qualifying costs including payroll, rent, mortgage interest, or utilities. PPP loans are calculated based on 2.5 times monthly payroll costs. Up to 100% of the loan principal of a PPP loan is potentially forgivable and even more disturbing, the business did not have to prove “economic injury” to qualify for these funds. According to the Small Business Administration’s guidelines, “They are not tied directly to economic losses suffered as a result of the disaster and presume you have experienced economic distress because of COVID-19.”
Of course, not every local business that received a PPP loan has abused it. The intent of the program, overall, was honorable. Those who were funded, overall, were honorable. But, the employers on our list gamed the system and caused incalculable financial hardships on hundreds of Scioto County families. Here are the top three schemes that have been reported to us.
You’re NOT fired
This tactic involves reducing hours but keeping you on the payroll. In Ohio, if your hours are reduced by up to 49% you cannot file for partial unemployment. If your hours are reduced by 50% or more, the state says you “may” qualify for partial unemployment. That little word “may” is a guarantee that there is no guarantee.
The employer received the PPP loan based on 2.5 times their monthly payroll costs before the loan application. So, while the employees sat at home (with no way to file a claim with the state) the employer was sitting on a pile of cash. The safe bet would be to assume that you would quit and find alternative employment which would absolve them of any responsibility. After all, you left.
This is a big one, folks. With this tactic employers are harshly doling out punishment to employees for otherwise minor infractions of the company’s rules. In cases where verbal warnings wouldn’t even normally apply, these companies are weaponizing the guidelines to justify extensive suspensions. Now, your hours are cut by 100% but you can’t file for unemployment because you are still employed. Yet again, the employer realizes that a certain percentage of those workers will quit. They are in the clear because you walked off the job.
You’re too hot
The implementation of daily temperature checks has now become the norm. You can’t walk into the county courthouse without having your temperature taken before you are screened for contraband. Anyone found to have a temperature of 100.4° F is immediately dismissed from the property. You are then told to go get a COVID test. You are not permitted to return to work until you can prove that you are negative. Some employers require multiple negative tests over a period of several months. Those additional tests are typically not covered by insurance and those additional costs fall at the feet of the employee (who has just been off work and without a paycheck).
In addition to these three popular schemes, there is a vast misunderstanding of the Family Medical Leave Act (FMLA) which was enhanced on April 2nd, 2020. When people don’t know their rights they become vulnerable to actions by uninformed management that could have a lasting financial impact. Worse, they can easily be manipulated by an unscrupulous swindler.
Now you know the schemes. It is time to educate yourself. Has this happened to you or a loved one? If so, it is time to stand up and report. It is easy and confidential. You can report suspected fraud, waste, abuse, or mismanagement of federal funds to (800) 767-0385. In addition, you can click here to submit an online complaint with the office of the Inspector General.
Some Scioto County Businesses Abusing the PPP Program