Columbia attorney offers Paycheck Protection Program guidance.

Following the swirl of new Paycheck Protection Program stipulations released by the Small Business Administration and U.S. Treasury two weeks ago, Burr Forman McNair partner George Morrison reiterates businesses can finance employee bonuses with the funding as long as they leave a paper trail.

"I think a lot of us were a little nervous about paying bonuses because it might be counter-intuitive to say 'I need this money and I'm going to go pay bonuses with it,' " Morrison, based in the law firm's Columbia office, said. "Hopefully, it means something more than it says when they say that bonuses are forgivable costs. Hopefully, what they also really mean, at least implicitly, is that they are not going to take the payment bonuses too heavily into account when evaluating whether a borrower truly needed a PPP loan."

A week after the SBA released its PPP Forgiveness Application (.pdf) on May 15, the U.S. Treasury and SBA clarified that employee bonuses and hazard pay was forgivable, funding could be used to pay furloughed employees and any PPP loan could be audited by the SBA, according to a recent Fisher Phillips release.

With these clarifications, employers can use the funding to pay for projects completed before the covered period so long as they are paid during the covered period, according to the release. Similarly, non-payroll costs from before the coverage period can be paid with PPP so long as these costs were incurred during that period.

"Borrowers have eight weeks to spend their money and have it be forgiven, and this gives them, dependent on their circumstances, two different eight-week periods to choose from, calculating their payroll costs," Morrison said.

Also, as some employers grapple with bringing their employees back to the workplace because of COVID-19 concerns and high unemployment benefits, the recorded headcount will not be docked due to employees who were fired, requested shortened hours or resigned, according to the release. Still, employees who turned down an offered position must be reported to the South Carolina unemployment office within 30 days to avoid PPP penalty.

"The sort of paramount piece of advice we're giving everybody is to keep all of your books and...

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT