SBA Update To FAQs Begins To Address Forgiveness Questions
May 4, 2020
By: Mark A. Mangano
The Treasury issued an update to the Paycheck Protection Program Frequently Asked Questions on Sunday, May 3, 2020. The update added Question 40: “Will a borrower’s PPP loan forgiveness amount …be reduced if the borrower laid off an employee, offered to rehire the same employee, but the employee declined the offer?” The answer is no.
Treasury promised that a forthcoming interim final rule will exclude 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. Borrower will need to document:
- A good faith written offer of rehire, and
- The employee’s rejection of that offer.
This development will further complicate the forgiveness calculations but it begins to answer some of the many questions regarding the forgiveness process.
The link to the updated FAQ is here.