Smithtown, NY asked in Business Law, Contracts and Employment Law for New York

Q: My company paid me advances using PPP money and now are clawing it back. is this legal?

I work in solar sales, paid commission. Normally I get 25% when job is started and 75% of my pay when it is installed (typically 2-3 months later but covid made that 4-6 months). My company took the PPP money and paid all the salespeople on all their jobs the full amount with those funds. However, now many of the jobs are cancelling (more then normal bc of lost of income etc). My company is taking the money they paid us for those jobs back. We never asked to be paid out in full they just did it. Now the company is getting money from us that was given to them to pay us. It doesnt seem right and Im curious if this is legal.

1 Lawyer Answer

A: Not only is it "right" and "legal" it is required by the CARES Act that your employer used to get the PPP money in the first place.

Without spending forever educating you on the CARES Act and explaining how the Payroll Protection Program works all I will tell you is this:

(1) You have NO legal right to keep ANY money given to you for work you never did; duh.

(2) Your (great) employer did a wonderful thing when they BORROWED the PPP funds from the federal government and then GAVE most of it to you and the other employees--up front; I am sure you did not object, right?

(3) Unfortunately, the CARES Act and the PPP did not do everything that the Congress had hoped it would;

(4) Consequently, in order to stay on the legitimate side of the street, your employer MUST adjust its books to be

sure the PPP money given to you and the others was actually used to pay you and others the correct amounts based on the actual WORK you and the others did.

(5) In order to stay out of big legal trouble, your (great) employer is now having to do the correct legal thing by "clawing back" the money that you and others received up-front-for NO work.

(6) In short, there is nothing you can do--except quit--and then try to hide from the federal government.

(7) The only other alternative is to refuse to follow the laws that your employer is following; and get fired for doing so.

Your choice.

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