The Small Business Administration and Treasury Department last night confirmed that Paycheck Protection Program borrowers who attempt to rehire employees that were laid off will not have their loan forgiveness amounts reduced if those employees decline the offer to return to work.
In updates to the PPP FAQs late last night, SBA and Treasury said they would issue an interim final rule in the coming days codifying that a borrower must have documented that they made a good faith, written offer of rehire to the employee for the same wages and number of hours. Borrowers must also document the employee’s rejection of the offer.
In addition, the updated FAQs provide clarification about the treatment of nonprofit hospitals under the CARES Act. A nonprofit hospital may qualify for PPP funding if it “reasonably determines” and maintains documentation that it meets the criteria of a 501(c)(3) under the Internal Revenue Code and is therefore tax exempt under section 501(a), SBA and Treasury noted. They added that these entities should also review all other applicable eligibility criteria.
The FAQs also provide additional guidance for seasonal employers making borrower certifications to obtain PPP funding.