January 30, 2023

Volume XIII, Number 30


January 27, 2023

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Treasury Issues Updated PPP FAQs Addressing Layoffs and Rehires for Loan Forgiveness; Hints at Interim Final Rule

The U.S. Department of the Treasury issued updated PPP FAQs on May 3, 2020 (the “FAQs”) addressing the impact of layoffs on loan forgiveness. An open question has been whether a borrower will be impacted if the borrower laid off an employee, offered to rehire that employee and the employee declined. The FAQs make it clear that the SBA and Treasury intend to issue an interim final rule addressing the question in detail, which will exclude from the loan forgiveness reduction laid-off employees whom the borrower offered to rehire. The interim final rule “will specify that, to qualify for this exception, the borrower must have made a good faith, written offer of rehire, and the employee’s rejection of that offer must be documented by the borrower.” The FAQ also states that “employees who reject offers of re-employment may forfeit eligibility for continued unemployment compensation.”

The updated FAQs also address seasonal employers’ ability to make the borrower certifications. Further, the FAQ states that nonprofit hospitals exempt from taxation under section 115 of the Internal Revenue Code will be treated as nonprofits for purposes of the Paycheck Protection Program if the hospital reasonably determines that it is an organization described in section 501(c)(3) of the Internal Revenue Code.

See the full text of the FAQs here.

© Polsinelli PC, Polsinelli LLP in CaliforniaNational Law Review, Volume X, Number 125

About this Author

Phil Feigen of the Polsinelli Law Firm Corporate Transaction Attorney, in Washington DC
Office Managing Partner

Phil Feigen brings a unique perspective to providing general corporate advice, as well as complex business counsel to clients in ever-changing regulatory environments.  For more than 20 years, Phil has been providing guidance with respect to Small Business Investment Companies and other Small Business Administrative regulations, federal and state banking laws and federal securities laws. 

Phil focuses on helping clients through the SBIC licensing process so that they may realize the benefits of the program and increase the amount of investment...

Sara C. Ainsworth Securities & Corporate Finance Attorney Polsinelli Washington, D.C.

As an associate in the Securities & Corporate Finance practice, clients rely on Sara Ainsworth to work with Polsinelli’s team of attorneys to analyze each transaction matter to develop a strategic approach to representation based on the client’s immediate and long-term business and operational goals.

Working closely with seasoned Polsinelli attorneys in the Securities & Corporate Finance practice, Sara helps deliver a range of legal services during the life cycle of the client’s business—from selecting the appropriate choice of entity through to exit strategy.  Her practice...