Best Practices
Survival Tip #13: PPP: The Path to Loan Forgiveness
In last week's webinar, "The Path to Loan Forgiveness", the discussion focused on how restaurants are struggling to understand the loan reduction portion for PPP loan forgiveness.
Among the most asked about requirements were questions about restoring full-time equivalents (FTEs) and what to do if employees refuse to return to work.
Listeners were relieved to hear that the U.S. Treasury issued a ruling stating that employees whom the borrower offered to rehire are generally exempt from the CARES Act's loan forgiveness reduction calculation.
Forgotten is forgiven.
- F. Scott Fitzgerald
-
PPP FAQ
--- Alternative P/R Period When must payroll costs be incurred and/or paid to be eligible for forgiveness?In general, payroll costs paid or incurred during the eight consecutive week (56 days) covered period are eligible for forgiveness. Borrowers may seek forgiveness for payroll costs for the eight ...
Specifically, in calculating the loan forgiveness amount, a borrower may exclude any reduction in full-time equivalent employee headcount that is attributable to an individual employee if:
-
i. the borrower made a good faith, written offer to rehire such employee (or, if applicable, restore the reduced hours of such employee) during the covered period or the alternative payroll covered period;
ii. the offer was for the same salary or wages and the same number of hours as earned by such employee in the last pay period prior to the separation or reduction in hours;
iii. the offer was rejected by such employee;
iv. the borrower has maintained records documenting the offer and its rejection, and;
v. the borrower informed the applicable state unemployment insurance office of such employee's rejected offer of reemployment within 30 days of the employee's rejection of the offer.
