PPP loan forgiveness available if employee refuses to come back - Spidell

PPP loan forgiveness available if employee refuses to come back

The Treasury Department has announced that PPP loan forgiveness will not be reduced for laid-off employee(s) who refuse to come back to work. This is great news for employers, as we’ve heard many stories of employees refusing to come back to work because they are making more money on unemployment than they were while working.

In a frequently asked question posted on its website, the Treasury Department has stated that employers will not have to include these employees in their salary/hour loan forgiveness reduction calculation. Generally, an employer must reduce the amount of their expenses eligible for loan forgiveness to account for reduced hours or salaries paid to their employees.

To qualify for this relief, the employer must have made a good faith, written offer of rehire, and the employee’s rejection of that offer must be documented by the employer. Employees and employers should also be aware that employees who reject offers of re-employment may forfeit their eligibility for continued unemployment compensation.

FAQ #40 is available at:


Sign up for Spidell’s Post-Tax Season Update and Review webinar and learn about new planning opportunities resulting from the Families First Act, the CARES Act, the SECURE Act, and more. Click here to see available dates and register today!