Working Through the Pandemic: What Are Plastics Firms Doing?

Date August 3, 2020
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As businesses look for ways to weather the COVID-19 pandemic, many firms in the plastics industry have had a unique role as essential businesses, providers of personal protection equipment, or suppliers of single use products. Despite this, industry firms find themselves battling many of the same concerns affecting the general business community. Discover some of the ways the plastics industry is navigating the COVID-19 crisis.

Following Guidelines
Like all businesses, plastics companies must follow the evolving health and safety guidelines set by government entities and health departments, including enforcing social distancing, wearing masks, and monitoring employee health status then taking specific actions if an employee is diagnosed with COVID-19. There are other safety, health and business guidelines to comply with as well, such as those from OSHA, the EEOC, and Department of Labor. More information can be found at state and federal websites including:


Evolving safety guidelines have led to changes not only in the workplace but to industry events. Trade shows and conferences, including MD&M East, the Society of Plastics Engineer’s ABC 2020 Conference and the Plastics Industry Associations’ Equipment and Moldmakers Leadership Summit are among many events that have been postponed or cancelled. Events that have occurred as scheduled have generally been staged virtually.

Using Economic Relief Options
Plastics News reported that plastics firms have received over $1.6 billion dollars of Paycheck Protection Program (PPP) funds. Funds are still available, and those that have not received a PPP loan but are interested should contact their advisors or lenders as soon as possible. The Small Business Administration (SBA) will no longer approve PPP loans after August 8.

Other key economic relief options available to plastics firms include:

  • Economic Injury Disaster Loans (EIDL) available through the SBA. For more information, visit sba.gov/disaster.
  • Main Street Lending Program (MSLP) loans available through lenders. Visit https://www. federalreserve.gov/monetarypolicy/mainstreetlending.htm for more information.
  • Deferral of payment of the employer’s share of Social Security taxes.
  • Employee Retention Credit available to operations that were partially or fully suspended due to a COVID-related shut down order, or that suffered a significant decline in revenue (available only to businesses that did not receive a PPP loan).
  • Families First Coronavirus Response Act (FFCRA) tax credits available to offset the cost of employee leave programs.
  • State and local relief programs, including grants and loans.

As well, Congress is negotiating additional stimulus funding, which is expected to include funds for some small businesses, though it is unknown what new relief options may be available for plastics businesses.

Shifting Business Operations
To navigate the COVID-19 pandemic, plastics firms have shifted their operations in many ways, including:

  • Supporting PPE Needs. While some plastics firms considered essential operations have seen little to no business downturn, others have shifted operations in order to maintain business levels or employee counts or to help with the country’s need for personal protective equipment. Where operations allowed, many plastics businesses used excess capacity and available machine or labor time to produce N95 masks, ventilators, medical tubing and protective face shields.
  • Focusing on Cybersecurity. Many plastics firms have historically dedicated their technology budgets to operations, but risks of cybersecurity breaches have grown significantly, especially for those firms with employees working remotely. Ensuring proper training to prevent phishing attacks, reviewing the company’s IT infrastructure, and assessing security protocols for suppliers or customers where EDI or other connections exist have become critical projects for IT departments.
  • Evaluating Supply Chains. The industry continues to rely substantially on foreign sources for plastic resins, specialty compounds, molds and tooling, and equipment. Supply chain concerns have escalated due not only to the pandemic but also to turbulence in international relations and the threat of trade wars. Some businesses are re-evaluating their supply chains, considering not only cost and quality, but their ability to get critical goods during the pandemic or other crises. Meanwhile, others have found opportunities to expand their product or service offerings due to increasing demand for domestically produced goods.
  • Considering Diversity. Through the Great Recession a decade ago and now during the COVID-19 pandemic, plastics firms have watched some end-user industries thrive while others contracted. Many businesses in industries impacted by both global events are struggling to create sufficient cash or financial reserves to survive. Plastics firms limited to one industry and one or two customers are under increasing pressure to diversify to ensure their longevity.

Innovating to Improve Safety and Health
The pandemic has impacted many businesses’ views of public health, and plastics firms are among those considering how technology can improve the safety and health of employees, customers, and others who visit their facilities. While we are still uncertain whether the coronavirus can live on surfaces, some plastics firms have considered reducing their use of paper or other shared items. Similarly, they are considering touchless technologies established through automation. They are also increasingly using virtual meetings to maintain customer and vendor relationships, reduce travel, and ensure social distancing.

Moving forward, firms may consider using antimicrobial additives, especially if those additives can reduce the transmission of viruses, bacteria or other microbes. They might also consider continuous improvement opportunities, such as the use of additives or other redesigns, to make their products safer or easier to disinfect. Similarly, single-use plastics, including bags, bottles, utensils, straws and containers that have been outlawed in some areas due to environmental concerns have regained popularity due to their perceived safety over reusable products. It will be interesting to watch how human safety and health concerns are balanced with environmental concerns as the pandemic continues.

Planning Ahead
As plastics firms continue to navigate the COVID-19 pandemic, they can consider several actions:

  1. Ensure safety protocols for employees, customers and other facility visitors are met. Continually evaluate changing protocols and compliance.
  2. Determine what actions to take if an employee is diagnosed with the virus. This may include asking other employees to be tested or to quarantine, cleaning or disinfecting affected areas of their facility, and developing a backup plan for others to take over critical duties that cannot be performed by the affected employee.
  3. Understand the availability of economic relief options. Review the programs carefully and consider using those that will best support the business’s needs.
  4. Evaluate whether to make changes to product or service offerings. Are the firm’s offerings and customer base diverse enough to ensure the company’s longevity? Reevaluating strategic business plans, forecasts, and budgets may be necessary to ensure ongoing operations.
  5. Consider whether cybersecurity measures are appropriate, especially if the firm has employees working remotely. Companies should also consider discussing cybersecurity insurance options with their business insurance providers or requesting external evaluations from professionals who specialize in cybersecurity insurance.
  6. Assess supply chains. Does the firm have a backup plan to obtain critical goods or services if current vendors are unable to supply?
  7. Consider innovations that improve the safety and health of employees, customers and other visitors to the facility, including reducing or eliminating paper and adding touchless technologies.
  8. Consider innovations that can help customers use the firm’s products more safely, including changes to materials, surface finishes and product designs.
  9. For support in navigating the ongoing pandemic, contact a member of the HBK Manufacturing Solutions Group at 330-758-8613 or manufacturing@hbkcpa.com

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COVID-19 and EEOC Compliance

Date March 24, 2020
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The U.S. Equal Employment Opportunity Commission (EEOC) enforces federal laws regarding discrimination against a job applicant or employee, including the Americans with Disabilities Act and the Rehabilitation Act. As a result of the COVID-19 pandemic, the EEOC has released guidance for employers on applying these laws to job applicants or employees who may be affected directly by the virus. Some key points from the guidance:

    • ADA-covered employers, typically employers with at least 15 employees, may ask employees if they are experiencing symptoms of COVID-19 during the pandemic. This information must be kept as a confidential medical record in compliance with the ADA.
    • Employers are permitted to measure employees’ body temperatures, as the CDC and health authorities have acknowledged community spread and issued precautions that include taking temperatures. This is considered a medical examination and must be kept confidential.
    • Employers may question employees who report feeling ill at work or who call in ill about their symptoms in an effort to determine if they might have the COVID-19 virus.
    • Employers are permitted to require employees who have symptoms of COVID-19 to stay home.
    • Employers are permitted to require doctors’ notes for employees who have been out sick or with symptoms clearing them of the virus before they are allowed to return to work. However, employers should consider alternative arrangements for employees returning to work since healthcare organizations might be too busy to provide such documentation.
    • Employers are permitted to screen job applicants for COVID-19, as long as they do so for all applicants for the same type of job. Employers are also permitted to measure an applicant’s temperature as a post-job offer, pre-employment medical exam, and may delay a new hire’s start date if they have COVID-19 or symptoms of the virus. If the new hire is required to start immediately, but unable to do so because of COVID-19 or related symptoms, an employer may withdraw the job offer.

For more information, visit the EEOC’s FAQs regarding COVID-19 at: https://www.eeoc.gov/eeoc/newsroom/wysk/wysk_ada_rehabilitaion_act_coronavirus.cfm, or download their pandemic preparedness guide at https://www.eeoc.gov/laws/guidance/upload/pandemic_flu.pdf.

If you have questions or would like to discuss COVID-19’s effect on you or your business, contact a member of the HBK CPAs & Consultants team.

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