June 6, 2020

June 05, 2020

Subscribe to Latest Legal News and Analysis

June 04, 2020

Subscribe to Latest Legal News and Analysis

June 03, 2020

Subscribe to Latest Legal News and Analysis

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 California

TRENDING LEGAL ANALYSIS


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...

202-626-8330
Sara C. Ainsworth Securities & Corporate Finance Attorney Polsinelli Washington, D.C.
Associate

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 focuses on:

  • Planning and executing capital-raising transactions
  • Drafting and negotiating key commercial agreements
  • Money service business and banking applications and registrations
  • Mergers and acquisitions and other strategic transactions
  • Fund formation, including regulated funds such as Small Business Investment Companies

Sara supports clients in a variety of industries, including the financial technology and mobility industries. Collaborating with attorneys from other related practices allows Sara and the entire attorney team to provide clients with comprehensive legal advice designed to minimize liability, maintain flexibility, and advance the client’s objectives.

202.772.8495