Editor’s note: More than a dozen new members have joined this AICPA-led effort. Details can be found in this release.
An AICPA-led coalition including payroll processors Paychex and Intuit as well as the International Franchise Association is calling for a federal funding mechanism to help small businesses affected by the coronavirus outbreak make payroll.
“As the federal government focuses its attention on America’s economic engine — small businesses and their millions of employees — direct funding of their payroll can help,” a letter signed on Saturday by the coalition’s leaders states. “The problem: It takes time to create new processes to distribute funds to small businesses — speed is of the essence here. An efficient and effective process would be to leverage established small business payroll processing that is already in place and can be marshalled immediately to protect jobs and preserve resiliency within the small business sector.”
In the letter to President Donald Trump, Treasury Secretary Steven Mnuchin, Administrator of the Small Business Administration Jovita Carranza, and members of Congress, the group urges the creation of a central payroll funding account that small business payroll processors could use so that small businesses could continue paying workers amid the COVID-19 pandemic, which has caused widespread business disruption.
“The payroll processing companies and the 45,000-plus CPA firms in America have long been partners in helping small businesses thrive in good times, and we have a role to play in the grave challenges we face today,” the letter states.
The coalition calls the idea of a payroll funding facility one of multiple initiatives required to keep small businesses running. But it notes that potential relief such as direct payments and loans to small businesses, while critical, could take weeks to implement. “We are also convinced that proposed direct payments to individuals will not prevent small businesses from laying off employees. Small businesses need to make payroll now — the clock is ticking,” the letter states.
The letter notes that the payroll processor program would not cover all small business employees. Gig-economy workers and others would need to be supported through other measures. But the coalition called the idea a step in the right direction with numerous benefits. “It is a faster and more efficient process that does not require small businesses to get loans, and it ensures employees directly receive money,” the letter states. “In addition, small businesses that use this federal funding facility would be required to maintain their workforce, which would dramatically reduce layoffs.”
The letter, signed by Barry Melancon, CPA, CGMA, president and CEO of the AICPA; the leaders of two large payroll processors, Sasan Goodarzi, CEO of Intuit, and Martin Mucci, president and CEO of Paychex; and Robert Cresanti, president and CEO of the International Franchise Association, is available here.
For more news and reporting on the coronavirus and how CPAs can handle challenges related to the outbreak, visit the JofA’s coronavirus resources page.
— Kim Nilsen, (Kim.Nilsen@aicpa-cima.com) is the JofA’s publisher.