The US government has recognized the extreme hardship that has befallen many aviation companies and has passed legislation that will provide payroll support to aviation businesses.
This is a new program that has just been authorized and is in the process of being developed. It is known as the Aviation Manufacturing Jobs Protection (AMJP) program, but the actual scope includes more than just traditional manufacturing jobs.
The program is targeted to three categories of aviation business:
- FAA production approval holders – this includes businesses that hold PC, PMA and/or TSOA;
- MROs holding FAA Part 145 credentials; and,
- Aviation businesses providing goods or services under an AS9100 system.
The ASA Community has members that fall into each of these three categories.
The legislation is found in Public Law 117-2 at sections 7201-7202. The Department of Transportation plans to publish a website with resources to facilitate application and compliance under the program (we will let you know once it is published).
What Are the Program Benefits?
In summary, under the AMJP program, the government provides money directly to program participants to subsidize a portion of their payroll
Businesses that participate in this program will have to identify an eligible group of employees who perform a targeted activity (see above). This group can be no more than 25% of your total workforce. The members in this group are limited to employees with a total compensation level of $200,000 or less per year (each).
You will commit to retain this eligible employee group, and in return the government will commit to paying up to 50% of their base pay and benefits (“total compensation“) for 6 months. The government has appropriated 3 billion dollars for this program and if the program is oversubscribed, then this amount could be reduced on a pro-rata basis (which might reduce the government’s potential commitment to each applicant).
This program is for the “retention, rehire, or recall of employees of the employer” so that means that you can use the money to rehire eligible furloughed/laid-off employees.
Example: Let’s say you are a small business that distributes aircraft parts kits under an AS9100 system and is otherwise eligible for the AMJP program. You only have 12 employees. Three of your employees are involved in the AS9100 kitting process, so you designate them as your employee group. The combined annual salary of this group is $300,000 (including base pay and benefits). This means that the government could commit to paying $75,000 (50% of the salary for six months).
Example: Let’s say you are a larger distributor that distributes new aircraft parts under an AS9100 system and is otherwise eligible for the AMJP program. You have 600 employees who are substantially all involved in the AS9100 operations. Let’s say that you designate a group of 150 employees as your employee group. The combined annual salary of this group is $22,500,000 (including base pay and benefits). This means that the government could commit to paying $5,6255,000 (50% of the salary for six months).
As long as the program requirements are met, these funds would not have to be paid-back to the government. The funds would likely be treated like a grant.
What Can You Do Now, to Prepare?
The internal government mechanisms for managing this new program are still being developed, but while we wait for the program to be formally announced, there are some things that businesses can do now to ensure that they are prepared to take advantage of the program:
- Read the legislation to make sure you understand the terms and conditions;
- Assess whether you meet the fundamental requirements, which include:
- US Aviation Business meeting one of the three categories described above;
- in 2020, you laid off 10+% of your workforce or experienced a reduction in revenues of 15+% (each as compared to correlative 2019 numbers);
- Read the ineligibility provisions of the law and make sure you are not ineligible (and avoid ineligibliity);
- Obtain a DUNS number, if your business doesn’t already have one, because that is a likely prerequisite for application;
- Register in the System for Award Management (SAM.gov) because that is the most likely mechanism for government distribution of the funds;
- Obtain AS9100 certification, if you do not otherwise meet the qualifications.
Finally, you should be thinking of the questions that you may have and sending those questions to us. ASA is generating a list of Frequently Asked Questions and sharing it with the Department of Transportation in order to let them know what the community needs to know to make the program successful. This is an ongoing process, so please share your questions with us as you think of them.