PPP Loan Forgiveness Reminder: Notify Unemployment Insurance Office of Rejected Offers to Hire or Rehire | Fox Rothschild LLP


Employers requesting a Paycheck Protection Program (PPP) loan forgiveness should notify their state’s Unemployment Insurance office if they have offered to hire or rehire an employee who subsequently rejected the offer. . The Small Business Administration (SBA) has set up a provisional final rule effective May 28, 2020 which provides safe haven to employers who have made good faith attempts to hire employees, but job offers have been rejected, provided that the employer notifies the UI office of its State within 30 days of rejection of the job offer or re-employment.

In general, a reduction in the number of full-time equivalent employees during the period covered by the P3 loan reduces the loan forgiveness amount by the same percentage as the reduction percentage of full-time employees. However, due to the enhancements to unemployment insurance benefits provided by the government, many employers have complained that their job (or re-employment) offers have been rejected because individuals can earn more while unemployed than working. This interim final rule is designed to protect these employers in such situations.

The interim final rule contemplates a scenario in which the employer is unable to hire or rehire a sufficient number of employees during the period covered. Under this new interim rule, when calculating whether a portion of an employer’s PPP loan will be canceled, the SBA will not include a person who rejects a job offer in the calculation of the number of employees not. rehired. In short, failure to hire or rehire someone who rejects an offer will not affect the cancellation of the loan, if the employer takes the following steps:

1) make a good faith written offer to rehire such employee (or, if applicable, reinstate such employee’s reduced hours) during the Covered Period or the Covered Alternative Pay Period;

2) Offers a job for the same salary or wages and the same number of hours as that earned by that employee during the last pay period before the termination of employment or reduction of hours, which is rejected;

3) Maintains records documenting the offer and its rejection; and

4) Notify the State Unemployment Insurance Office concerned of the employee’s rejected re-employment offer within 30 days of the employee’s rejection of the offer.

Some states have created (or already had) a mechanism to report an employee’s rejection of a rehire offer, but New York does not have a formal mechanism to notify the state of such rejection. employment within 30 days.

Therefore, if a New York employer wishes to maximize the amount of the PPP loan cancellation, the employer must ensure that their job (or re-employment) offer is in writing. If the offer is rejected, the employer must work with a lawyer to prepare a letter to the New York Department of Labor’s Unemployment Insurance office to identify people who have rejected written offers of employment (or re-employment). ) and include copies of the written correspondence they sent offering these individual jobs.

Here are two examples of letters:

[ADDRESS FOR LOCAL OFFICE OF STATE UNEMPLOYMENT INSURANCE OFFICE]

Dear:

Please accept this as notice that [INSERT FULL LEGAL NAME OF EMPLOYER] (Company) offered [NAME OF EMPLOYEE] use [or reemployment] in accordance with the terms of the attached letter of offer [or email] and on [DATE] [NAME OF EMPLOYEE] rejected the Company’s offer.

If you have any questions or concerns, please do not hesitate to contact me.

Sincerely yours,
[COMPANY REPRESENTATIVE]

-WHERE-

[ADDRESS FOR LOCAL OFFICE OF STATE UNEMPLOYMENT INSURANCE OFFICE]

Dear:

Please accept this as notice that [INSERT FULL LEGAL NAME OF EMPLOYER] (Company) offered to the following people:

[NAME OF EMPLOYEES] use [or reemployment] to [DATE] and they rejected the Company’s offer within the past 30 days. Enclosed are copies of the Company’s letters of offer and employee refusals of these job offers.

If you have any questions or concerns, please do not hesitate to contact me.

Sincerely yours,
[COMPANY REPRESENTATIVE]

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