TREASURY MAKES A RESTAURANT-REQUESTED TWEAK IN THE PPP'S FORGIVENESS RULES

Borrowers will no longer be dinged for furloughed employees who decline their old jobs.

In what the National Restaurant Association described as a win for restaurants, the U.S. Department of the Treasury said it will not lower the forgiven amount of a Paycheck Protection Program (PPP) loan if a laid-off employee declines an offer to resume his or her job.

Under the PPP, a loan can turn into a grant if at least 75% of the funds are spent on payroll within eight weeks of being granted. Restaurateurs have found that some of the experienced staff they’ve invited back to work have declined the job offer because they’ve found new employment or are making more in unemployment aid and other forms of relief. Finding a replacement within the eight-week time frame has sometimes proven difficult.

Prior to yesterday’s rule change, the amount of forgiveness would be lowered as a result of the former employee’s decision. But Treasury exercised its legislated “de minimus” authority—the power to make changes in the program of minimal consequence—to allow the pay for that unfilled job to be included in the forgiveness calculation.

Under the interim rule change revealed yesterday, employers are required to make the job offer in writing and document that it was declined by the employee.

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