Coronavirus update 5/4/20
PPP - Update
PPP loan forgiveness and employees who refuse to come back to work
The Treasury often issues guidance in the form of FAQ's. Earlier this morning, the Treasury Department released new guidance on PPP loan forgiveness provisions. The guidance advises that
an employer will not be penalized with reduced PPP loan forgiveness if an employee rejects an offer to return to their job.
From the guidance:
Question
: Will a borrower’s PPP loan forgiveness amount (pursuant to section 1106 of the CARES Act and SBA’s implementing rules and guidance) be reduced if the borrower laid off an employee, offered to rehire the same employee, but the employee declined the offer?
Answer:
No. As an exercise of the Administrator’s and the Secretary’s authority under Section 1106(d)(6) of the CARES Act to prescribe regulations granting de minimis exemptions from the Act’s limits on loan forgiveness, SBA and Treasury intend to issue an interim final rule excluding laid-off employees whom the borrower offered to rehire (for the same salary/wages and same number of hours) from the CARES Act’s loan forgiveness reduction calculation.
The interim final rule will specify that, to qualify for this exception, the borrower must have made a good faith, written offer of rehire, and the employee’s rejection of that offer must be documented by the borrower.
Employees and employers should be aware that employees who reject offers of re-employment may forfeit eligibility for continued unemployment compensation.
As you can see,
documentation is very important and will be a critical part of the forgiveness process.
This ruling is one of the changes that we have been actively advocating for with our Federal officials and The Treasury. We continue to engage on a number of other PPP specific issues and will have updates as we learn more.
Tomorrow afternoon (May 5) at
2PM
, MRA Chair Gates will join NBC10 Boston’s Brian Shactman for a one on one discussion regarding the restaurant industry in Massachusetts. They will be responding to viewers questions and concerns throughout the broadcast. You may stream this interview live by clicking on the link below:
