Payroll Protection Program – If my employee refuses to return to work after being laid off, will it reduce my PPP loan forgiveness amount?
Answer: NO, your forgiveness will not be reduced if you offer to rehire an employee (for the same salary/wage and number of hours) and the former employee rejects your offer.
The SBA and Treasury intend to issue an interim rule that will exclude laid-off employees whom the borrower offered to rehire from the CARES Act’s loan forgiveness reduction calculation. In order to qualify for this exemption, it is critical that the borrower/employer maintain proper documentation. The employer should provide a good faith, written offer to rehire. The employer should request written documentation of the rejection, or otherwise document that the employee refused the offer of re-employment.
It is also important to note that employees who reject offers of re-employment may forfeit eligibility for continued unemployment compensation.
Please feel free to reach out directly to your advisor or with any questions or concerns. As always, we are here and ready to help.