Q: Can you use the PPP loans to retro pay employees?
I was furloughed from my job is March, I filed and received unemployment benefits shortly after. In the month of April I started receiving the addition $600 a week federal payment from the CARES act. My employer called me on April 30, notified me that we were opening back up, requested me to come back to work on may 1 and informed me that they received one of the PPP loans and they would be retro paying me back to April 10 and I would be responsible for paying back EDD. I tried to refuse retro pay, because with the additional $600 weekly payment, I was making more money on unemployment then I was when I was working and the retro pay check they are trying to offer me is $774 less then what I got paid by EDD for the same time period. Leaving me to find a way to pay EDD $744 of my own money. My employer has made it clear that they don’t think that is their problem.
A:
The PPP program is nothing more than an SBA loan and the employer can use that loan money for any business purpose. However, if the employer wants money to be forgiven, it must use the money for payroll and certain other expenses. What your employer is doing, by retroactively paying payroll, is either uninformed or an attempt to mislead the government because forgiveness is only given to payroll and certain other expenses paid within the 60 days following the funding of the loan money to the business. Paying prior payroll that the company was not obligated to pay will likely not qualify as an expense that will be forgiven.
As to you, however, the employer is legally allowed to give you money whether you worked or not. Whether the EDD will consider it retroactive pay or not is something you will have to cover with the EDD.
Good luck to you.
Justia Ask a Lawyer is a forum for consumers to get answers to basic legal questions. Any information sent through Justia Ask a Lawyer is not secure and is done so on a non-confidential basis only.
The use of this website to ask questions or receive answers does not create an attorney–client relationship between you and Justia, or between you and any attorney who receives your information or responds to your questions, nor is it intended to create such a relationship. Additionally, no responses on this forum constitute legal advice, which must be tailored to the specific circumstances of each case. You should not act upon information provided in Justia Ask a Lawyer without seeking professional counsel from an attorney admitted or authorized to practice in your jurisdiction. Justia assumes no responsibility to any person who relies on information contained on or received through this site and disclaims all liability in respect to such information.
Justia cannot guarantee that the information on this website (including any legal information provided by an attorney through this service) is accurate, complete, or up-to-date. While we intend to make every attempt to keep the information on this site current, the owners of and contributors to this site make no claims, promises or guarantees about the accuracy, completeness or adequacy of the information contained in or linked to from this site.
