Inglewood, CA asked in Employment Law for California

Q: Is it true if a company take the paycheck protection program loan n under the Cares act and keep the same workforce ?

Is it true if a company take the paycheck protection program loan under the Cares act and keep the same workforce or salary levels the company qualify for loan forgiveness? So this means my job can't fire me or they will have to pay the loan back

Related Topics:
1 Lawyer Answer
Neil Pedersen
Neil Pedersen
Answered
  • Westminster, CA
  • Licensed in California

A: An employer does not have to keep the same workforce it had before it gets a PPP loan. If it fails to maintain at least 75% of the number of employees employed in the pre-COVID workforce, it will have its forgiveness reduced, but the company is not disqualified altogether unless the number of employees falls far below the 75% number. Also, the SBA looks at number of employees not retention of employees. Therefore if the employer had 10 employees before qualifying for the PPP and 10 completely different employees thereafter, the company still qualifies for forgiveness.

Finally, there is nothing in applying for the PPP loan that would prevent an employer from terminating any or all employees and you as an employer would have no standing to make an issue of it. It is all between the employer and the SBA.

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.