Innovations Refunds in West Des Moines announces latest round of layoffs
A West Des Moines-based company that grew rapidly as it helped small business owners obtain federal tax credits related to the COVID-19 pandemic has announced its latest round of layoffs.
Innovations Refunds, which at one time employed about 1,000 workers, said Thursday it will be paring its central Iowa workforce by 36 employees, bringing its headquarters employment to 96. Another 31 employees who work remotely across the United States are also being cut, according to the company’s vice president of communications, Mireille Rosselli.
Rosselli said after the latest round of layoffs, the company will have total employment of 148, including the remaining remote workers and those in an office in Miami, where CEO Howard Makler and board Chairman Jeffrey Schoonover live.
Employees affected by the cuts will receive 90 days of wages and health benefits and will be able to extend health benefits through the federal Consolidated Omnibus Reconciliation Act, or COBRA, if needed, Rosselli said.
Upcoming Innovations Refunds layoffs follow larger round last fall
The company announced the layoffs of 155 employees, including 78 in West Des Moines, in September. It attributed the workforce reduction to the Internal Revenue Service placing a moratorium on the Employee Retention Credit, a tax incentive program for employers who retain their workforce during the pandemic.
Innovation Refunds' core business had been helping small business owners file for and obtain the credit. The company is no longer processing new ERC claims but is still supporting existing clients it helped file for the credits, Rosselli said.
The IRS suspended processing ERC claims after determining that a large number of the filings did not meet the criteria for the credit. In a December news release, the IRS announced it was sending 20,000 letters disallowing claims covering taxpayers ineligible for the ERC either because their entity did not exist or did not have employees for the time period when the credit was claimed.
At the height of processing ERC claims for its clients, Rosselli said Innovation Refunds employed about 1,000 people, but that 65% were temporary workers under contract.
Rosselli said the layoffs announced Thursday were based on “a careful analysis of the services Innovation Refunds provides and ongoing strategic planning,” adding that the company remains “stable and viable” as it is going through a restructure.
Company says it's looking at new products as COVID-19 credits dwindle
With the ERC program appearing to be winding down, Rosselli said Innovation Refunds is in the process of developing new products for small businesses. She said the company could be making announcements of new products in 2024.
“What’s come out of the ERC and helping these small businesses is the clear lack of products that support small businesses,” Rosselli said.
“We’re continuing to support these small businesses that are our current customers, and we will stand shoulder-to-shoulder with them as they receive their refunds,” Rosselli said.
A former Innovations Refunds employee from Tennessee file a federal lawsuit against the company in January alleging violations of the Worker Adjustment and Retraining Notification, or WARN, Act and the Fair Labor Standards Act. The lawsuit claims that when Innovation Refunds pared its companywide workforce by about half last fall, workers were not provided with the 60 days’ notice the WARN Act requires for mass layoffs.
Rosselli said Innovation Refunds does not comment on pending litigation but that the company has complied with provisions of the law. When the previous West Des Moines layoffs were announced in September, the company cited “unforeseeable business circumstance” as an exception under the WARN Act for providing less than the otherwise required 60 days advance notice.
This article originally appeared on Des Moines Register: Innovations Refunds in West Des Moines to lay off 36 employees
