JGS Insurance

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1. What happens if an employee retires during the covered period, does if affect FTE reduction?

   May 21, 2020 5:04 pm Comments Off on What happens if an employee retires during the covered period, does if affect FTE reduction?

   No, that is voluntary separation.  “FTE Reduction Exceptions: Indicate the FTE of (1) any positions for which the Borrower made a good-faith, written offer to rehire an employee during the Covered Period or the Alternative Payroll Covered Period which was rejected by the employee; and (2) any employees who during the Covered Period or the Alternative Payroll Covered Period (a) were fired for cause, (b) voluntarily resigned, or (c) voluntarily requested and received a reduction of their hours. In all of these cases, include these FTEs on this line only if the position was not filled by a new employee. Any FTE reductions in these cases do not reduce the Borrower’s loan forgiveness.”

2. Is hero pay (additional pay) be included as payroll cost?

   5:03 pm Comments Off on Is hero pay (additional pay) be included as payroll cost?

   Yes, subject to a max of $15,385 during the covered period (8 week period).

3. PPP is still 1% money?

   5:03 pm Comments Off on PPP is still 1% money?

   Yes.

4. Can you pay someone for 40 hours even if there is not 40 hours of work? And these people would count towards FTE total?

   5:03 pm Comments Off on Can you pay someone for 40 hours even if there is not 40 hours of work? And these people would count towards FTE total?

   Yes, keep in mind that from a government perspective the goal is to keep employees on payroll regardless of whether there is work available to them or not.

5. Is it correct that PPP could NOT be used to pay for anyone taking leave under FFCRA or the Emergency Sick Leave Act. Can it in fact be used for one of these purposes as long as a tax credit is not claimed as well? If so, could you please provide that regulation or guidance.

   5:03 pm Comments Off on Is it correct that PPP could NOT be used to pay for anyone taking leave under FFCRA or the Emergency Sick Leave Act. Can it in fact be used for one of these purposes as long as a tax credit is not claimed as well? If so, could you please provide that regulation or guidance.

   It has to be claimed as a credit under FFCRA and not included as a PPP Loan forgivable expense.

6. Is payroll processing cost allowed as part of the payroll cost?

   5:02 pm Comments Off on Is payroll processing cost allowed as part of the payroll cost?

   No, it does not fall under the non-payroll costs under SBA rules.

7. What happens if you do not use all the funds and fall under 75 % can you give back funds to the bank?

   5:02 pm Comments Off on What happens if you do not use all the funds and fall under 75 % can you give back funds to the bank?

   Yes.

8. Does the PPP Loan Forgiveness FTE Reduction Safe Harbor law/regulation FTE employee level include both full-time and part-time employees?

   5:02 pm Comments Off on Does the PPP Loan Forgiveness FTE Reduction Safe Harbor law/regulation FTE employee level include both full-time and part-time employees?

   Yes.

9. If my payroll is more than the 75% and I don’t use the entire 25% will it be forgiven as long as it doesn’t go over 100%?

   5:01 pm Comments Off on If my payroll is more than the 75% and I don’t use the entire 25% will it be forgiven as long as it doesn’t go over 100%?

   Yes. For example, you received a $100,000 loan, used $80,000 for payroll (more than 75% of the loan) and $25,000 for rent.  Total spent was $105,000 of which $5,000 is out of your pocket and not the loan. In this situation you should receive forgiveness for the entire $100,000.

10. Do we have to show that we spent all the funds for the loan to be forgiven?

    5:01 pm Comments Off on Do we have to show that we spent all the funds for the loan to be forgiven?

    No, you have to prove what you spent to obtain forgiveness, but not all of the loan will need to be spent to obtain forgiveness.

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