The Treasury Department has updated its guidance on Paycheck Protection Program, or PPP, loans, saying employers will not be penalized if workers reject an offer to return to their job.
The new guidelines, issued May 3, refer to the forgiveness aspect of the loans, which were designed to help small businesses retain and rehire workers. The loan will be forgiven if at least 75% is used for payroll costs.
But consumer-facing businesses like restaurants are finding that rehiring workers is a challenge with the coronavirus death toll continuing to climb. Some workers feel it is not safe to return to work or are unable because of lack of childcare and other reasons.
Under the updated guidelines, employers can qualify for an exemption from the forgiveness calculation if they offered in good faith to rehire a worker, and that worker rejected the offer — though the interaction must be documented.
However, the guidelines also note that employees and employers should be aware that those who reject offers of re-employment may forfeit eligibility for continued unemployment compensation.
The exemption is seen as a win by the National Restaurant Association, which has been lobbying for clarifications to the PPP since it launched April 3, including an exemption that protects employees when workers reject rehire offers.
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