Trump Signs New Law Relaxing PPP Rules: What You Need To Know
Reduced payroll cost from 75% to 60%
At least 60% of your loan must be used for payroll costs. Payment to independent contractors cannot be included in the payroll costs.
24 WEEKS OF COVERAGE Eligible expenses incurred that are to be forgiven was extended from eight weeks to 24 weeks.
December 31, 2020 is the final cutoff date for eligible expenses.
Rehiring and staffing requirements
Businesses now have until December 31, 2020, to rehire workers in order for their wages to count towards forgiveness. Employer-Owners compensation that is eligible for forgiveness is still capped at $15,385. $100,000 cap per employee compensation is unchanged.A sample rehiring offer letter is on page 2. You should have signed documents for your record.
Exception for a reduced head count
If a business is:
Unable to rehire an individual who was an employee of the eligible recipient on or before February 15, 2020;
Unable to demonstrate an inability to hire similarly qualified employees on or before December 31, 2020; or
Able to demonstrate an inability to return to the same level of business activity as such business was operating at prior to February 15, 2020.
Repayment term from 2 years to 5
A business now will have 5 years at 1% interest to repay the loan in the even loans or portions of them are not forgiven. Further, the first payment will be deferred for six months after the SBA makes a determination on forgiveness.
When preferred, a business can still apply for loan forgiveness after eight weeks.
Payroll tax deferral is to continue until December 31, 2020 whereas it was to be discontinued once a loan is forgiven
Date June XX, 2020
Re: Notice of Recall from Temporary Furlough Due to COVID-19 Dear BUSINESS NAME Team Member: BUSINESS NAME has reviewed applicable federal, state, and local orders and guidance and has determined it is permitted to resume operations. As a result, we are writing to inform you that you have been selected for recall from your temporary furlough status. We appreciate your patience and loyalty during these difficult times and want to assure you that BUSINESS NAME is committed to maintaining a safe and healthy workplace. Your employment continues to be at-will meaning you or the company can end the employment relationship at any time and for any reason. Likewise, you are reminded that your employment continues to be subject to all company policies. Please check one of the boxes …
- You have agreed to accept your position again and continue employment.
- You have decided not to continue employment and decline the offer of continued employment due to the following reason/s. __________________________________________________________________ __________________________________________________________________
PRINT NAME: ____________ SIGNATURE: ____________
Please return and/or contact me at BUSINESS EMAIL ADDRESS with any questions or if you need additional information. We look forward to having you back.
____________________________ Name and Title