The CARES Act created the Paycheck Protection Program
(“PPP”), which amended the Small Business Act
(“SBA”) to provide short term loans to companies with
fewer than 500 employees and other companies (such as those in the
restaurant and hospitality industry). Such loans may be eligible
for full forgiveness if used for payroll and other business
expenses and all other statutory requirements are met.
The SBA continues to issue guidance on a rolling basis, which
can impact a company's eligibility for the loan, use of the
loan, and the level of forgiveness. Below is among the updated
guidance issued this week by the SBA:
- Rehiring. A
borrower's PPP loan forgiveness amount may not be reduced as
a result of laying off an employee if the borrower laid off an
employee, offered to rehire the same employee, but the employee
declined the offer if: (a) the borrower made a good faith, written
offer of rehire (for the same salary/wages and same number of
hours); and (b) the
