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Paycheck Protection Program Guidance for Employees Who Don’t Want to Be Rehired

Paycheck Protection Program Guidance for Employees Who Don’t Want to Be Rehired

Service Businesses  |  Healthcare  |  Nonprofit  |  Manufacturing & Distribution  |  Government Contractors  |  Construction & Real Estate

Some laid off employees are electing not to come back to work, even when offered the same position, hours and salary. Many of these employees are making more money in unemployment benefits than they do working due to expanded unemployment benefits under the CARES Act.

To account for these employees, the Small Business Administration (SBA) issued additional guidance regarding loan forgiveness amounts under the Paycheck Protection Program (PPP).

Borrower’s Forgiveness Amount Won’t Be Reduced

The SBA’s new guidance states that a borrower’s PPP loan forgiveness amount will not be reduced if a borrower laid off an employee, offered to rehire the same employee and the employee declined the offer.

According to the SBA, 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.”

You can read the complete list of PPP frequently asked questions here.

Potential for Lost Unemployment Compensation

In the new guidance, the SBA notes that any employee who rejects an offer of re-employment could forfeit their eligibility for unemployment compensation.

Read More About the PPP

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Published on May 06, 2020