In an important recent response issued to its regularly updated FAQs, the SBA addressed the situation of where a PPP borrower’s forgiveness amount would be reduced if the borrower lays off an employee and then offers to re-hire the employee, who in turn declines the offer. Such borrowers can exclude those laid-off employees from loan forgiveness reduction calculations if said employees turn down a written offer to be re-hired. The SBA also cautions, without elaborating, that such employees may find themselves ineligible to continue receiving unemployment benefits.
A to-be-issued interim final rule will specify that a borrower may exclude an employee from loan forgiveness calculations if the borrower made a good faith, written offer of re-hire and also documented the employee’s rejection of that offer.
Please contact your MSPC advisor to assist you with your forgiveness calculations and associated documentation requirements.