The Small Business Administration and Treasury continue to issue guidance regarding the Paycheck Protection Program (PPP) established by the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). The most recent update to the list of frequently asked questions (FAQs) addresses whether a borrower’s loan forgiveness amount will be reduced if one of the borrower’s employees turns down an offer to be rehired.
According FAQ 40, laid-off employees will be excluded from the forgiveness reduction calculation so long as the borrower made a good faith, written offer of rehire and the employee’s rejection of the offer is documented. The FAQ specifies that the offer must have been for the same salary/wages and the same number of hours. It also notes that employees who reject offers of re-employment may forfeit eligibility for unemployment compensation.
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