U.S. Senate Passes Paycheck Protection Program Flexibility Act

Earlier this week, we wrote about the Paycheck Protection Program Flexibility Act, a bill that would make several significant employer-friendly changes to the Paycheck Protection Program (“PPP”) created by the CARES Act in March. These changes include, but are not limited to:

  • 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.

As we indicated, the bill passed the U.S. House of Representatives by an overwhelming margin late last week. Last night, the U.S. Senate also passed the bill. The president is expected to sign the bill into law in the coming days.

For questions about PPP loans 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.

George Hlavac