On Oct. 18, ASA submitted a letter to the U.S. Office of Information and Regulatory Affairs asking that the forthcoming Covid-19 Emergency Temporary Standard, which will apply to businesses with 100 or more employees, consider the unique operating characteristics of staffing agencies by including alternative size tests for determining their small business status under the ETS.
ASA proposed that the ETS adopt the headcount approach used for determining employer eligibility for the Employee Retention Tax Credit under the Taxpayer Certainty and Disaster Tax Relief Act of 2020—i.e., 130 hours per month, without regard to full-time equivalent employees.
ASA also proposed that the ETS should include alternative size tests for determining small business status based on financial measures like revenue and assets. The letter suggested that the ETS adopt the tests used in the federal Paycheck Protection Program. Under the PPP, a staffing agency is a small business concern if its annual revenue is $30 million or less. The letter further suggested that the ETS include a size test similar to the “alternative size standard” from the U.S. Small Business Administration, under which a borrower was considered a small concern if its maximum tangible net worth at the time of application was not more than $15 million and its average net income after federal income taxes (excluding any carryover losses) for the prior two full fiscal years was not more than $5 million.
ASA is in the process of seeking a meeting with OIRA to discuss these proposals.