U.S. House Passes Bill Aimed at Relaxing PPP Requirements

Late last week, the U.S. House of Representatives passed H.R. 7010, also known as the Paycheck Protection Program Flexibility Act, by an overwhelming 417-1 vote. The bill, which the U.S. Senate is expected to consider this week, would make major changes to the Paycheck Protection Program (“PPP”), including:

• Extending the “covered period” for PPP loan forgiveness from eight (8) weeks to twenty-four (24) weeks;

• Reducing the percentage of PPP loan proceeds that must be used toward qualifying “payroll costs” from 75% to 60%;

• Permitting PPP loan recipients who receive loan forgiveness to defer payroll tax payments for the remainder of 2020;

• Delaying the deadline for rectifying reductions in employee headcount and/or pay from June 30, 2020 to December 31, 2020; and

• Lengthening the maturity term of new PPP loans to 5 years.

If enacted in its current form, the bill would greatly benefit PPP loan recipients. We will continue to update employers on the progress of he Paycheck Protection Program Flexibility Act and other critical developments in this rapidly-changing area of the law. For questions about this or any other labor and employment topic, please do not hesitate to contact the attorneys at Hoffman & Hlavac.  To stay updated on the key labor and employment law developments that affect your workplace, subscribe to our blog and follow us on social media.