The U.S. Small Business Administration (SBA) issued Paycheck Protection Program (PPP) loan guidance on laid-off employees declining to be rehired. Businesses can exclude laid-off employees from loan forgiveness reduction calculations if employees rejec
t a written offer to be rehired. The employer’s offer to rehire must be for the same salary/wages and number of hours. Employees that reject offers to return to work may be ineligible for continual unemployment benefits.
Many Arizona companies, such as restaurants, gyms, doctors’ offices, and other small businesses have experienced employees rejecting offers to return to work. One reason employees are refusing to return to work: they are making more money in unemployment benefits than in their jobs. The CARES Act temporarily provides an additional $600 per week to people who have been approved by their state for unemployment insurance.
See SBA’s Frequently Asked Questions and Answers, No. 40, for details.
Do you have questions about calculations for your PPP Loan Forgiveness Application? Contact Wallace Plese + Dreher’s PPP Loan Forgiveness task force about your situation.
Mark R. Dreher, CPA – Managing Partner
Barry S. Graham, CPA, CMA – Senior Audit Manager