Paycheck Protection Loans are Intended to Keep Employees on the Payroll: What Does that Mean?

Paycheck Protection Loans are Intended to Keep Employees on the Payroll: What Does that Mean?

Paycheck Protection Loans are Intended to Keep Employees on the Payroll: What Does that Mean?

On December 22, 2020 Congress passed the stimulus bill which provides for new for Paycheck Protection Program loans and other small business relief. Read more about that legislation and apply for a PPP loan here.

The Paycheck Protection Program (PPP) is designed first, to keep your employees employed as well as help your business remain viable, but what does that mean? As you consider that the Paycheck Protection loans are intended to keep employees on the payroll it might make it easier to see how it impacts:

  • The application process and appropriate loan amounts
  • What the funds can be used for
  • How that will impact any future forgiveness

Applying for PPP Loans

The first requirement to apply for a PPP loan is that your business must have been in operation on February 15, 2020 and had employees for whom you paid salaries and payroll taxes. If you are self employed and don’t have any employees, you will also qualify to apply.

The next part of the application process deals with your payroll. Your potential loan amount is based on 2.5X your annual payroll up to a maximum of $10 million (whichever is less). An employee includes full-time and part-time employees.

Independent contractors have the ability to apply for a PPP loan on their own so they do not count for purposes of the PPP loan application.

What Can PPP Funds Be Used For?

As you would likely assume, because Paycheck Protection Loans are intended to keep employees on the payroll, most of the approved uses will be somehow related to payroll. The SBA says loan proceeds can be used for:

  • Payroll costs
  • Costs related to the continuation of group health care benefits during periods of paid sick, medical, or family leave, along with insurance premiums
  • Employee salaries, commissions, or similar compensations
  • Payments of interest on any mortgage obligation (but cannot be used to pay principal or prepay a mortgage)
  • Rent (including rent under a lease agreement)
  • Utilities
  • Interest on any other debt obligations that were incurred before the covered period
  • Refinancing an SBA Economic Injury Disaster Loan (EIDL) made between January 31, 2020 and April 3, 2020

This relief is intended to help your business cover these expenses for the next eight weeks. The Treasury and the SBA are already thinking about making additional capital available, but there are no details yet. And, the Congress is contemplating what next steps will be once the crisis is over and thinking about making capital available for stimulus. We’ll keep you updated as things change.

How Will This Impact My Business if I Seek Forgiveness?

You can request forgiveness for the principal portion of the PPP loan for the eight-week period after you get the loan. There are stipulations however. Forgiveness only applies to:

  • Payroll costs
  • Interest on a mortgage
  • Rent 
  • Utilities

You may also receive forgiveness for additional wages paid to tipped workers.

You should be aware that no more than 25% of the forgiven amount can be attributed to non-payroll costs.

In other words, your loan forgiveness will be reduced if you decrease your full-time employee headcount; and, it will be reduced if you decrease salaries and wages by more than 25% for any employees who made less than $100,000 in 2019. 

What if Use PPP Loan Funds for Something Else?

If you use PPP funds for unauthorized purposes, the SBA will direct you to repay those amounts. If you knowingly use the funds for unauthorized purposes, you will likely face fraud charges. If one of your shareholders, members, or partners uses PPP funds for unauthorized purposes, the SBA will have recourse against the shareholder, member, or partner for the unauthorized use. In other words, there are consequences for using these funds for other than the approved uses.

Make sure you’re bookkeeping is up to date and keep good records. Your bookkeeper just became your best friend. Sloppy bookkeeping could prove to be very costly right now.

Keeping Employees on the Payroll: What Should I Do Now?

Avoid the temptation to use these funds for other than payroll purposes. I’ve seen many businesses already committed to keep employees on the payroll by having them crosstrain to tackle other business needs or even continue to pay them to simply be available. Many of the businesses I know don’t have the resources to do that, but they do realize how valuable they will be when things return to normal. The PPP loans will help literally millions of small businesses keep those valuable assets as they navigate the coming weeks.

If you’ve already had to lay off employees, you have until June 30, 2020 to restore employment and salary levels for any changes made between February 15, 2020 and April 26, 2020.

Please keep in mind this information is changing rapidly and is based on our current understanding of the programs. It can and likely will change. Although we will be monitoring and updating this as new information becomes available, please do not rely solely on this for your financial decisions. We encourage you to consult with your lawyers, CPAs and Financial Advisors. To review your real-time funding options with one of Nav’s lending experts, please contact us.

This article was originally written on April 3, 2020 and updated on January 11, 2021.

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ABOUT AUTHOR

Ty Kiisel

Ty Kiisel is a Main Street business advocate, author, and marketing veteran with over 30 years in the trenches writing about small business and small business financing. His mission at Nav is to make the maze of small business financing accessible by weaving personal experiences and other relevant anecdotes into a regular discussion of one of the biggest challenges facing small business owners today.

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221 responses to “Paycheck Protection Loans are Intended to Keep Employees on the Payroll: What Does that Mean?

  1. What if a owner of a company received the ppp loans and sent us home to work from home but full time. No money lost for the owner, company was still running as usual. Commissions were still coming in and being posted to the bank account. Business running as usual just from home. Employees work 8 hour days. Was this legal?

    1. Roxana – I am not sure I understand your question but generally PPP does not require employers to maintain specific pay or hours for employees. However, employers who do reduce headcount or wages may not get the PPP loan fully forgiven. What you are describing sounds like it may be more of a labor law issue. I’d encourage you to talk to your state Department of Labor or the US Department of Labor, or an employment attorney, if you believe you haven’t been paid properly for hours worked.

      1. Thank you for your reply. What i am asking is if an employer sent everyone to work from home and business as usual. Is he eligible for the ppp loan?

        1. Yes, Roxana, if I understand the idea of PPP is to keep workers on payroll even if they aren’t able to come into work. Some employers paid employees who were unable to work at all because their jobs did not allow for remote work.

  2. My husband and I have 4 businesses.. one we own together. The other 3 I work at and only in his name with a LLC Name. I worked at all before Covid and after. He got $50,000 in ppp loans and only paid himself and listed one employee himself.. I had no access to any of the loan. Is that legal? All were forgiven. One of the businesses has 3 employees.

  3. I have an employee who insists that I have to pay her for personal time she is taking off. The time off is personal and Non Covid related. She is an hourly employee. We do not have paid personal time off in our policy, however she says because we received a PPP loan we need to pay her personal time off.

    1. That’s not a requirement of PPP. However, I am not an attorney and cannot offer legal advice. I’d suggest you contact your advisors or state department of labor for clarification.

  4. If employer received PPP in 2020 were they allowed to keep employees working and make them take their PTO time in order to get paid. The company is under 50 employees in NJ.

  5. A not for profit Arts Organization(Symphony Orchestra) applied for and received PPP money to give their employees some payment as they have been unable to work at all during the pandemic. Said not for profit then used “withholding payments to said employees” during a contract negotiation to force them to accept a contract. Is this legal?

    1. Unfortunately I have no idea. That sounds like a labor law issue and I’d recommend you either contact your state department of labor, the US Department of Labor or an employment attorney.

  6. I work on commission, if there is no work I don’t get paid. My weekly pay went down about 300 to 400 dollars, and I know my employer got the loan approved, but I have not gotten any money to make up for what my pay suffered. Am I getting scammed? And how am I supposed to get paid?

    1. Rob, Unfortunately there is no requirement that employers who get PPP maintain specific hours or wages. But if they do not, they may not get full forgiveness of their loan. Have you looked into pandemic unemployment?

  7. If the company I work for was given this loan, and I was being sent home early and not getting my 40 hours? Should they have made sure I was getting 40 hours since I am a full time employee?

  8. My former employer used Covid 19 to terminate me. Out of 70-75 employees on payroll, I was the only one terminated. I worked for that company for over 3 years. No One was laid-off
    Where can I complain?

    1. Your best bet is to talk with an employment attorney who can help you understand if you have a case. If not, you can complaint to your state Department of Labor or the federal Department of Labor.

  9. My husband had to leave his job after a month of not getting a paycheck. His boss was waiting for the PPP loan check to come in. Eventually my husband had to look for another job but still had t received anything g from his former employer. This has gone on since January and we are now in May! Is there anything we can do. My husband stayed with his employer in good faith. We are talking about almost $5000!!!

    1. Sandra – If your husband was not paid for work he did then he can either file a complaint with the Department of Labor and your state employment agency, or hire an employment attorney. So sorry to hear he’s been through this.

  10. A portion of some employee salaries are paid by a private grant. Can we claim that amount under the PPP loan forgiveness?

  11. My employer received 8 million in PPP & gave us an extra $100 in 1 paycheck.. We received nothing else. No bonus, no increase in hours, no medical, no insurance, no anything. How is it possible a business received that much money yet didn’t give employees anything but $100 each while we worked during the entire pandemic as it’s a security organization. Is this legal?

    1. Employers are not required to pay employees extra due to PPP. If he paid your normal pay then it may be eligible for forgiveness. However, if you suspect PPP fraud you may reach out to an attorney or report it to the SBA.

  12. My employer has received the 2nd PPP loan but she still send us home if we are slow. Can she cut down our hours if we are slow? If I have the vaccine reaction and not work for 2 days due to the reaction does she pay us for the 2 days missed from the PPP or can she deny the pay? Thank you

    1. My employer was given money through a PPP loan. Furloughed a couple of people and have the majority working from home remotely, and some just laid off for incompetence. Now in june-july they paid us in advance money that would have been used for our PTO that was attained that year. Afterwards whatever PTO was accrued we weren’t paid for. I’m just wondering if a employee can apply for the PPP; 1. For having to endure traveling to work with the potential risk of lost hours due to Transportation being slowed/ delayed, and 2. The rising bills and less money received from ex.1 during the months up until now?

      1. A W-2 employee cannot apply for PPP. However, what you are describing may be a potential labor contract issue. (I’m not saying it is but raising the possibility.) You may want to consult an employment attorney.

  13. My employer has been approved for the ppp loan program but my hours haven’t increased. Why is this?

  14. My employer has received the PPP Loan, this will be the second time. Payroll was today , pay period was 104 hours but I only worked 75 hours due to being sent home early almost every day. And she only added 10 hours stating she is trying to spread out the loan! Is this right?

    1. Jessica – The PPP doesn’t dictate how your employer pays you. Employers may not get the loan fully forgiven depending on how much they reduce headcount or wages though. I don’t quite understand your scenario but if you are not being paid for hours you worked then that’s an issue you can contact your state Department of Labor about.

  15. My boss gave me 5000. Dollars from ppp and said put this aside as a pre-payment for a work project you will do in a year from now. Is that what the government intended ?

  16. ? My husband was supposed to get a percentage of Ppp Covid pay loan by his job he had to quit to do his self employment and customers who were already lined up…he was 9 days short of this pay,but the employer kept moving the timeline like dangling a carrot in front of a bunny,it was supposed to be given in May for working through the pandemic his last day was June 10th 2020 was this PPP loan or even legal?

  17. No one should rely on this Government funded option ,we fell for the come ons with Unemployment they have many laws , where we knew we qualified,well after changing all their wording and programs now we owe 28,000 in overpayment! Don’t believe them!!

  18. I work commission pay in auto repair. My boss received his second round of ppp. End of feb 2021. Last year my average pay I was receiving 53.4 hours of pay through the ppp loan. It was all used in the 8 weeks. He would pay me 53.4 hours weekly. By working on repairing cars if I turned 44 hours commissions he would keep all that pay for himself and used the ppp loan to pay me my weekly average. Should he have only use the ppp loan to make me whole? If I turned 44 hrs and then only use another 9.4 hrs from the ppp loan? That way he could be able to use in up between the 8 – 24 weeks what would care my weekly average longer? Otherwise he pockets 100% every penny collected from customers or insurance company’s and only used the ppp loan to pay us.

    1. I’m sorry I don’t understand your scenario. Keep in mind PPP does not require employers to pay employees a specific amount or to keep them employed at a certain number of hours. But if they reduce wages or headcount that may reduce the amount forgiven.

  19. My boss received 2 loans as employees we have worked through the pandemic with no extra pay even gone weeks without pay. Boss has bought 2 pickups quads some guns a new grill and a 7000 diagnostic computer I’m tired of him complaining how broke he is but tripping over packing boxes in the shop and at his house.. in the mean time I’m losing my home from low wages

    1. John – if you have not been paid for hours you worked that could be wage theft and it certainly could be illegal. I suggest you contact an employment attorney and/or your state labor department or the federal Department of Labor.

  20. My employer decreased my salary by 1/3 for approximately 4 to 6months. Should he have to pay me the difference if he received loans based upon my normal salary? I do make more than 100,000. He had us sign a paper agreeing or other wise he said he would lay us off.

  21. What if your employer lied an said he had 6 employees, but there was only 3. He lied to me and said he wasnt getting a loan because he didnt need it. He also lied about loosing business. Its a convenience store/gas station and we were essential and i stayed on to keep a roof over my head and we were busier than we ever were the 5 years i was there. On his loan app he stated it was %100 going to payroll. He turned in at the 8 week mark that %100 went to payroll. There was 3 of us, me, my boss Jasvir and his “brother in law”. 25,000 ÷3 ÷8weeks. Wouldnt i and shouldnt i have received more money on my check each week, or was he intitled to split the money amongst himself and his brother in law. He got the loan on april 30th, and his wife got a brand new BMW SUV FOR MOTHERS DAY. DOESNT HE OWE ME SOME MONEY AND SHOULD FACE FRAUD CHARGES?

  22. My job paid us 8 weeks with a ppp , but out of the 20-25 employees they asked several of us to work for it and the other employee did not have to work for it. they where giving me a check of 47 hours for 8 weeks but I had to work 35-40 for it. could they do that to us

    1. Norma I am not sure I understand your question. But the general answer is that yes, employers were allowed to pay employees even if they did not come into work. Did you get paid for all of the hours you worked? If not that would be an issue to raise with an employment attorney or the Department of Labor.

  23. I just discovered my boss got $25000 ppp loan on April 30th of 2020. He kept telling me he wasnt getting one. At this time it was just me, the owner and thd brother in law. 3 employees quit and he fired a lady because he said she was $50 short in lotto. She asked if she could see the paperwork. She found his mistake. He told her she could never see the paperwork again, then fired her. Ive asked for my check stubs for months now, he wont give them to me. So, 25000, 75% of that had to go to payroll if he wanted the loan forgiven in 8 weeks, im sure he did. 18750÷8 weeks =2353.75÷3 employees=781 per week. I made the same amount all year. 308. Thats almost 500 dollars i did not get every payday. Ge did buy his wife a brand new BMW SUV FOR MOTHERS DAY! WHO DO I REPORT HIM TO. THE UNEMPLOYMENT OFFICE? IRS.?

  24. Our employer told us is now required to pay back his PPP Loan and he’s saying that we each have to pay back what he paid us from this loan , is that allowed ? I stayed with him and returned after we opened back up but 2 employees are not. I can see if maybe them 2 have to pay him back but I don’t see why I would have to. Please help, thank you !

  25. Hello, I work for a small company that cleans multiple commercial areas. My job specifically is at a school cleaning with a group of 4 other people. We were told we would have 3 months off paid so we wouldn’t be laid off to get unemployment. After coming back to work months later we were informed that due to the company using PPP we lost our Paid Time Off without being paid out for what time we had ( people with a year or more under their belt are given 40 hours pto). After asking about us being paid back for the pto loss or getting vacation time later in the year we were told “sorry its gonna seem unfair but you’ve all got to wait” Is the loss of PTO without being paid out laid out somewhere in the PPP that I have just overlooked??

    1. PPP itself doesn’t specifically address employee concerns like yours unfortunately. It sounds like in your case you’ll need to reach out to your state department of labor, the US Department of Labor or an employment attorney.

  26. So, I work at a shop and recently had two coworkers come down with COVID. Upon a deep cleaning and negative tests for other employees, employees have the option to come back to work next day or stay home. I’m opting to stay home because I thought it was due diligence and safety protocol to quarantine.

    As far as I know, my boss has PPP. Is she required to pay me for my time off and self-quarantine?

  27. I want to find out if my employer was wrong for not bringing me back from furlough. I was furloughed end of March of 2020. I applied for unemployment in April after employer made me use my vacation time first, then went to apply for unemployment. Should I been paid back my vacation money they made me use if they got the PPP loan? Should I have been brought back to regular pay after being an 11 year employee? How can I report abuse of the Loan if so?

  28. Hi, my employer closed the door because of COVID-19 from 3/27-5/29/29. I could not collect unemployment benefits for that period. Is my employer required to compensate me from the PPP funds he received? If not, why?

    1. There’s no requirement in the CARES Act that he keep you on payroll though failing to do so may reduce forgiveness. But it sounds like you may have been able to collect unemployment. Have you appealed?

  29. My supervisor made me go take the covid 19 test because I had shortness of breath. In the meantime I was told to self quarantine and coul not stay in the apartment rented for employees whose hometown is 60 radius miles from the project. So I took the test and came back negative. Anyway everyone who is sent to go get tested is receiving a 40 hours paycheck while they get their results. I was told that I was not going to receive no pay for that week. Im just stunned. I paid hotel to self quarantine and expected that check. Is that legal. The company IS receiving PPP.

  30. I know of a business that got they PPLoan but didn’t use it for his employees, he kept the money for himself and when employees went back to work they worked for 2 weeks WITHOUT pay..hummm doesn’t seem right to me. What can this employee do about this. Any help would be greatly appreciated. Thank you

  31. My father just told me that his employer (a small business) did receive money for this loan but he (as the sole employee) has not received a paycheck for this. The business had to close back in March and just re-opened this month. Is there something we can do to rectify this? Can we report them? The employer will not give a reason to my father as to why he wasn’t paid for those months. My father could not apply for unemployment because he was working a part time job and that continued during the shutdown.

    1. Mark – I am sorry to hear that. The purpose of PPP is to keep workers on payroll. Still, PPP doesn’t require employers to pay all employees but failing to do so may affect how much of the loan is forgiven. Suspected SBA loan fraud may be reported to the OIG’s Hotline at 800-767-0385.

  32. My employer is a small business. I took leave of approximately 4 weeks in total, to care for my children while their school was closed. Today I noticed a credit inquiry on my Experian account that was titled Us Sm Bus Admin Oda. I did not apply for any covid relief, and I am certainly not a small business. Is it normal for those who used FFCRA at their small business employer to have a credit inquiry pulled?

  33. My pay was reduced initially for 8 weeks but then the extension was filled. Isn’t my company supposed to take my pay back to normal when they apply for their loan to be forgiven?

  34. My employer a construction comp. received ppp. I myself and my coworkers were never laid off and are still working. My understanding we are entitled to $200. Tax free per week on top of our regular pay until the end of July. We haven’t received anything but our regular pay. Please explain, Thank you.

  35. Good gay: my employer furloughed all but 2 employees, replaced all of us with new employees. They took me off the schedule completely and mailed me a furlough letter two weeks later. Now my furlough letter date expired Tuesday with no word, should I call them for an update letter or request a layoff. If i become played off can i turn them in to the labor board or EEOC?

  36. I also work in a restaurant that received the SBA loan which included the PPP. I had been receiving state unemployment benefits. My manager advised me he would be paying me 284.00 a week and to make state unemployment aware each week which I did. Long story short I was called back to work on 6/2/2020 and turned in my resignation due to family. I take care of my 92 year old mother. My manager is now holding my last check.

  37. My employer is charging us back at the end of the month for all ppp money we received throughout the month. Is this allowed?

  38. So my company received a loan but during they told us we had to work every other day and use our vacation time for the days we missed. Should they of been able to do that? And is there any way to bring it up and recover some of our vacation time?

  39. How !ong was employees supposed to get paid on this my boss only paid us for 4 weeks he said that is all that he got for us and was it supposed to be taxed

  40. My employer received the PPP and instructed all staff
    to stop filing for unemployment benefits. They promised to pay us our average earnings (based on Jan-March pay) for the next 8 weeks. I have continued to work part time, with the expectation to receive the PPP pay regardless of hours worked.
    I received the first 4 weeks with no issue at the end of May, but didn’t receive any for June. Aside from my very part time hours worked. They are now saying they do not have to pay the second round of funds and there is no money left. Is this ethical?

  41. My employer got the PPP loan a few weeks ago. I’ve received three checks. The first two were an average of what I normally made in the last few months. But my last check was less than $20. This is nothing close to what I was making before. When I confronted him about it, He said they changed the rules and that he was just spreading the money out more. I couldn’t live off a paycheck like that. So I had to put in my two weeks. Is this legal? It seems like he’s just trying to keep as much money as possible, and not take care of his employees.

    1. Deni – There is no obligation for employers who get PPP to pay employees a certain amount. They may face reduced forgiveness for reduced hours and/or wages. Did you consider filing for unemployment instead of quitting?

    2. My employer received a PPP loan. I work on commission in a small salon of 3 stylists. We went back to work when our state reopened. That took me off of unemployment right away. My boss told me we are getting paid from the PPP loan even though my checks are based on a 55% commission from my weekly service earnings. Does that mean my boss is keeping 100% of my earnings while she pays us from a loan that doesn’t need to be payed back? I made more on unemployment with the additional 600 weekly so going back to work cost me money. This isn’t settling well with me. Am I wrong to feel that way?

  42. The company I work for received their PPP loan and used it properly. We never had lay-offs and worked the best to our ability to keep up and running. For us employees that did receive the PPP loan in our salary and the 8 week period is over so we have to May that amount back to our employer?

      1. Hi Gerri,

        My boss owns multiple businesses. I started in March 2020 he paid me 1099, from his company called Simplicity. When he received the PPP he moved me to another company and paid me through that company stating i started april 20, 2020. This continued until PPP funds were used and I was put back on the books at Simplicity, with a term date for other company of 6/14/20. In fact, they added four employees, 3 plus me, hired on same day, termed on the same day. There was a clerical error, and my boss said he paid me too much and has started to deduct it from my pay. in fact, he takes half of my weekly pay because i owe him. HELP

        1. I wish I could help but this is really a labor law issue. (It’s not something specifically covered in the CARES Act.) You’ll need to talk with your state Department of Labor, the US DOL or an employment attorney.

    1. I worked for a company that forced me to become a subcontractor or find a new job and I became a subcontractor and then was asked to come back on payroll so they could get ppp money and paid us for the 8 weeks for a total amount of 10,000 dollars per subcontractor then turned around and made us pay it back with our funds made by being subcontractors so the money that I got though the program of ppp was paid back in full to employer. Is this right? How did this help me. I think the company has taken the money from the government paid us then said. Pay us back in full

  43. Hello I have a question the company my husband works. They were told they couldn’t use vacation pay for 80 days. Is that due to the loan they receive and they were told they are supposed to work a 40 hour week but 2 times this pay week they were sent home early so now he is a day short in pay that messes with our bills. But are they still supposed to get paid a 40 hour week. See 2 weeks ago he was short like$5 in his pay because they were told to clock out.

    1. Elizabeth – This sounds like a labor/wage issue. You’ll need to contact your state Department of Labor for assistance. I’m sorry we can’t be of more help.

  44. I have been told that I will no longer receive a PPP check for the period I was laid off. I applied for unemployment right after my job closed down. I was told I qualified. However, I never received a penny, when others I worked with did get unemployment money! When we opened back up, I received a check (PPP check) and a letter stating I would get a check for 8 weeks, which coincidently we were closed that long! I got 4 PPP checks but have been told that since I am now working, I will not get another; however there is a small amount extra added in to my check from the PPP program. I used most of the little savings I had when this started just to keep my head above water paying monthly rent, car payments, and eating! I tried to help by talking to credit card companies and getting my payments stopped until this was over but was then hit with a monthly payment at least double what it was before corona started! And my credit limit was lowered on one card! I had used it to pay for food since I was getting no other money! I seem to have been royally screwed in this whole plandemic scam! So I guess my employer gets to keep the PPP loan money to pay his expenses during those 3 months but again I get to scramble around and try to catch up on mine! Doesn’t seem quite right – does it? Once again the government sticks it to individuals. Oh, and the $1200 stimulus check couldn’t even touch my monthly rent for one month!

  45. So pandemic began in March.. my employer laid us off for 1 week and brought us back only to work 15 hours a week. So we applied for unemployment, we were approved. My employer just received a PPP loan which is great BUT we are still at 15 hours a week and doesn’t want us filing for unemployment… Can our employer do that?

    1. If you are not receiving your normal wages, check with your state unemployment office to find out whether you can apply/quality for unemployment. If you have questions you can also contact your state Department of Labor.

    2. Ok I went on vacation in March 7th for 2 weeks when I got back ready to go to work The pandemic began a week after my boss told me not to go back because didn’t know what was going to happen , a few days later I got a text message with a notice of termination ,
      Which I found very unprofessional after over 25 years of working there, I texted my boss right away because I couldn’t believe it, she said she was doing this so that we can apply for unemployment, (which I did) and promising that she will call us back after everything goes back to normal . Then I found out two months that she started to call people back , I was very surprised that she wasn’t calling me being the G. Manager , then I thought the store is probably slow not much businesses so maybe she wants to save some money with my salary, time passed by and never called. I reached out to her because I wanted an explanation of what was going on she then texted me back saying that she was under the impression that I didn’t want to go back. ‍♀️ Th point is that I got unemployment But I would have love to go back to my job instead . My question is even I get unemployment wasn’t i supposed to get money from the money that she got from the government to pay the employees? Was that legal ? Advise me please thank you.

      1. PPP doesn’t require the employer to keep specific employees on payroll. If the employer does lay off employees or reduce wages that may mean they can’t get the entire loan forgiven, though.

  46. I work in a small office..no more than 11 employees. As an employee I was under the impression that when my boss received the PPP loan, we would be paid our average hours for the next 8 weeks. We are currently back at work, but not working a full 8 hour day. Our schedule has been reduced to a 6-7 hours per day. When our first check on the PPP loan came out, we were all paid our average. Second check, was missing 14 hours of pay. Third check, I was told I am only getting paid for the hours I worked. Again, I’m a full time employee whose office is not open a full day because my county is still in the Yellow phase. So my paycheck once again is short 14 hours. Can you please provide any insight? Am I wrong for thinking I was entitled to my average number of hours worked?

    1. The PPP doesn’t require employers to pay employees their normal pay. Employers may receive a reduction in forgiveness if they reduce hours and/or wages however. You may want to check with your state Department of Labor and/or unemployment agency to see if you may qualify for partial unemployment.

  47. Is there a public listing of companies that took the payroll protection loan from the federal government?

  48. If I work full time hours 40 a week does the pay check protection plan guarantee me my full 40 hours a week even though they are only making us work 30 hours?
    Why isn’t there any clarity for the employee when it comes to this plan? A lot of the employees were denied unemployment because EDD considers 30-32 hours full time
    Which means employees are losing 10 hours a week from their paychecks because the employer is only paying them 30 hours a week. I would really appreciate a reply.

  49. My boss got a ppp loan and now that she has the money we were under the impression we would be paid our average Salary. We are commissioned hair stylists and now we only get paid when we work and our commission. She’s not paying us from the ppp. We are doing clients and my employer keeps half of the money paid for service and we get the other half. Seeing business is slow going due to the pandemic we were told when we came back to work we would get our average since they used that averGe to get the ppp loan. We are only getting the money we actually worked for !! No ppp money. She said she needs it to pay for other stuff and can’t just pay us. I told her I know the law and she cannot decrease our salary more than 25% and I want my money. She said she’s not going to pay us the ppp money because she needs it. I notice a lot of new stuff and improvements in the salon happening now that she got all that money! This is illegal and I need to know how to report it and get my salary.

    1. Are you a W-2 employee or 1099 contractor? If you are a contractor then the employer is not supposed to count your pay for purposes of their PPP loan. If you are W-2 employee, then they aren’t required to pay you a certain amount but if your employer reduces wages or headcount that reduces how much they can have forgiven. If you suspect PPP loan fraud you may report it to an employment law attorney call the OIG’s Hotline at 800-767-0385.

  50. i work as a auto tech get paid commission all weeks are different some weeks make more than ppp pays does it carry over to next pay day when i dont exceed the weekly ppp payment

  51. My employer revived the loan but nobody was ever laid off. She received the loan in April but didn’t pay us till May . On the last 3 checvls first one she paid 40% of on my commission not my hr. I’m pId 8.00 a hr and my Commission is done separate she writes out the commission and pays us different on that but added the she puts a stimulus bonus into the check. Is this correct ?? I have full time other job working for Major League Baseball she dose t want me
    Filing unemployment we’re sending in my paystub’s

  52. I am being reassigned within the company to a new location doing the same job but at
    A lower wage. The company received a substantial amount Of money through the PPP act and guarantees my job through September. Is the company required to use the loan to cover the difference in pay until the end of September?

  53. How many businesses are taking this loan and working staff 40 hours a week simply to have payroll paid for thus keeping 100% profit from jobs performed ?

  54. My employer received the PPP loan and I am being paid my average wages from last year. I am a tipped employee and have returned back to work. I asked my manager how tips would be handled with the loan and he told me that tips would be divided between the front of house and the back of the house. However upon further inspection on my paycheck they are subtracting my tips from my average wage that they are paying me from the loan. Essentially I am earning the exact same amount of money per week regardless of how many days I work and by extension how many tips o receive from customers. My employer is keeping more of the PPP loan by not having to pay me a fraction of my wages that they are replacing with the customers tips. Is this legal? Is it legal for them to create a tip pool composed of employees that don’t normally receive tips? I asked how tips would be handled and they neglected to inform me correctly? Are they in the wrong?

  55. My employer told me they don’t have to pay is the ppp money and I am a fourty hour a week employee and haven’t received more than 24 hours on my paycheck and have worked those hours as well. I feel like I’m working for free and he is reaping all the money. Something isn’t right looking for guidance.

  56. Hello,
    What if we do not hire all of the employees back but ALL of the 60% for payroll gets used amongst some of the employees? Will that still be forgiven?

  57. My employer is using the PPP to pay employees but also cutting labor costs by sending employess home this seems to counter what the PPP was intended for?

  58. How can I find out who got the loan. I believe my daughter’s employer took the loan only paid a few employees. She was called back to work 10 weeks later and he gave her a small check for no stated reason. He has also made some costly updates and repairs.

  59. What if your business received pop but is still making employee’s working full time doing their regular work and only paying then the minimum amount required by ppp guidelines.

  60. My employees are getting the payroll protection however one employee keeps missing work for various reasons, do I still have to pay her the full amount of weekly pay?

  61. We have been trying to survive without the Paycheck Protection Program as we would really rather be completely independent & stay profitably busy. We have always been extremely conservative & done without, to keep things rolling. We have definitely taken a hit though & are now really starting to feel it three months into this thing, with no sign of the recovery we were hoping for. Can we apply for the PPP & use the funds to pay our own expected income & also the income of a contract employee (1099) that we try to keep busy, without penalty & having to repay? This is extremely important as we try to re-consider our decision to not accept any funds. We are a very small business that provides an excellent & needed service.

  62. Is your employee that received a SBA loan supposed to pay you for you normal hours worked? They have cut our hours and we are not getting paid for our hours they we normally work.

  63. I work for an educational non profit company. Our business has stopped since the shut down of all schools. My employer received a PPP loan and has paid me for hours even though I have been unable to work. I just received notification that any future payments for hours worked will be debited form the funds I was paid from the PPP loan. It seesm that they are using the PPP funds as a “draw” for future payments. I this in compliance with the PPP guidelines?

  64. Very unclear how this works. We need to clock in and out. Some days we lose hours due to people afraid coming back to the dental office during covid19. This past week I only worked 24 hours. Thats 13 hours I’m missing. Do I get paid through the ppp Loan as my usual pay for 8 weeks? I normally receive 36 hours.

  65. I have been going to the office and also working from home same as the other employees in my company. I was told because that feel I have not put in as much as the other employees they took 2 weeks of my PTO, that i accrued before the closure. Is this legal to take time already accrued before the closure?

  66. My company got the PPP loan. They brought all of us back and we are getting paid our average weekly pay from last year. We are on commission. However, most of us would be making more than what we are getting from the PPP because we are so busy and selling more. Does my employer have to pay me the difference?

  67. The owners of the place i work. Made us pay for our insurance from the money they paid us out of their ppp loan. So really we didn’t receive any help. Had to give money back to them to pay for our insurance. When is bs, it says in this article that the ppp money was for payroll and benefits. So whats our owners doing with that money.

  68. As an independent contractor, if you get a PPP loan but you end up still working or getting paid (delayed invoice payments versus loss of freelance job), do you risk not having the loan forgiven? My employer tossed myself and three other longtime employees (12-25 years) off payroll about a year ago (crippled by poor management decisions and debt) and offered to keep three of us on as 1099 independent contractors, no benefits. When billings fell at the start of the COVID-19 shutdowns, the employer immediately cried poor and applied for and was denied a PPP loan, not at all surprising because he had no salaried employees and no payroll— he himself hadn’t even drawn a salary for years, instead paying himself back a personal loan he made to keep the company afloat previously. He then said he’d be unable to pay us “for a long long time” unless each of us to applied for PPP loans individually (he insisted they were simple “grants”), received the “grants,” and give him the money “most” of which would go to pay us our “salaries.” And he wants us to continue to work for him so the company can survive! One employee is applying, the other three flat out refused, having both studied the details of the loans/forgiveness requirements and the absurdity of handing loaned money to a sinking ship. BUT—each is debating the consequences of applying for PPP loans ourselves, as it’s none of the company’s business and we are each on the verge of refusing to work until past invoices are paid; it could be over. But what if we get the loans and the company finds a way to pay us anyway and we keep working, one project at a time?

    1. Murdoch – please contact an employment attorney. The IRS does not look favorably on companies simply switching employees to 1099 contractors and may be violating some labor laws as well.

  69. My employer received a PPP loan and they have reduced our salary by 20% although I am still working the same amount of hours (if not more) remotely. Is this allowed with the PPP loan forgiveness?

  70. As a server, our primary pay is from tips. My understanding of the PPP loan is that my employer is taking my average hours/ average weekly pay (including tips) and paying us accordingly. Our restaurant opened May 1st with 25% capacity . My question is that with the loan, and them paying us our average of what we were making before… are we supposed to be receiving our tips from customers on top of the “average paycheck” or are we capped at that pay average? (Granted, the amount of customers isn’t much, but… it also makes a difference with putting us closer to what we normally would make)

  71. My employer received a PP Loan but we were just notified that we would have to reapply and interview in order to be rehired- even though we’ve already been back at work for a couple of weeks. No one received notification that we were terminated, we were all told we were being layed off and we all came in several hours a week to keep the office running. We are all confused. Is this one of the rules of the PP loan?

  72. My employer was approved for PPP however is only offering me to come back 30 hours a week instead of the 40 I had been working prior to being furloughed. Do I have any options here? If I decline the offer will I use Unemployment Benefits?

  73. My son is a college student and worked part time around his college schedule for a small business. His hours varied from week to week. He was not laid off but has not been working since the beginning of March due to COVID-19. He has still not been asked to return to work due to business is still slow and is enough for the full time employees to handle. His employer received PPP and has been depositing payroll in his account. He stated my son would have to work off the hours he is being paid now with no additional pay when he is asked to return to work. Is this legal? It will take him months to work the hours for free and keep him from being able to find paid work at another job due to his college schedule. Your help is appreciated. Thank you.

    1. DJ – that is absolutely NOT my understanding of how this is supposed to work. Employers can pay employees even if they aren’t coming back to work and I do not believe they can require employees to work those hours at a later time. I am not an attorney though. I’d encourage your son to talk with an employment attorney.

  74. I am self employed and received PPP fund. My question is how do I proof that I pay myself? Do I write a check to myself? I am very confused. Please help

  75. Hello, I work for a GM dealership and ever since the covid-19 pandemic I have been affected with no work. I inspect vehicles that come off transports. No transports, no vehicles GM plants have been closed for over a month. I get paid salary pretty much get paid per vehicle. My question is do I need to be at work in order to get a ppp check? Keep in mind no vehicles are being shipped to dealerships for over a month and may take another month for vehicles to start coming in on transport. I been helping here and there at the job and worked one day out of the week and received a paycheck less that 20 dollars. Talked to HR and they told me that I needed to be here at work to receive a ppp check . Wondering if that was right.

  76. I just found out that the company I work has enrolled in the PPP but I was told the money is for them to pay us if we out quarantined, which we’re not, if we are sick because of the covid-19, which we’re not or if we have to take care of kids because of the covid-19, which is not the case for me. So does that mean I can’t get the money for the 8 weeks? I have family and friends who are working and get unemployment every week from the PPP

  77. My employer received the PPP loan and has me back from being furloughed. However they made a 10% reduction to my salary, are they allowed to do this?

  78. As an employee is my boss required to pay us the full 40 hrs per week or can he cut our hrs

  79. I was working part time at 2 different jobs, can I receive a PPP check from both of them? Thanks in advance.

  80. Good morning,
    I am wondering about employee rights and when they should receive their pay from ppp loans. My employer called me back to work this week and gave me 2 weeks ppp pay only. Shouldn’t they pay me in full for the weeks missed since now I’ll be getting regular pay checks??? Please advise.
    Thank you,
    Helen Montesantos

  81. I work at a hair salon. If my employer received the PPP loan and intends to begin Using that for our pay before we can open, does that automatically affect our current unemployment pay + the $600 extra for Nj? How does that work? Because we’re not turning down any work bc no work is yet available but we can’t continue unemployment? If we have every intention on returning to work when it’s available but would rather stay on unemployment until then, is that possible?

  82. My employer received a PP Loan – however we were notified over the weekend that due to the lay off – we would have to reapply, interview, and audition in order to be rehired. Considering we have to reapply, interview and audition to be rehired that sounds like a termination not a lay off. No one received notification that we were terminated, and the company is back dating the termination. Is there anything as employees we can do, since the PP loan was obviously not to retain the employees?

  83. I am a bartender at my restaurant. Should I be receiving pay even though we are not open or do we have to be working? I’m not eligible for unemployment.

  84. The Co. I work for received PPP loan….I will be asked to work other than my assigned job….I’m a finisher in a printing co. he want me to do outdoor maintenance…must I agree to this ?

  85. The restaurant I work at was furloughed and just received the ppp. They said they would pay my my average paycheck but not to clock in. They only asked a few people to come in while others get to stay home and still get paid. Is it ok for me not to clock in?

    1. Amanda – if your employer states you don’t have to clock in then it makes sense to follow their guidance. Keep in mind that PPP can help employers pay workers even if they aren’t coming into their workplace.

      1. I was in the same situation. We were closed 100% and have been now for 5 months. We were offers jobs and signed if we accepted or denied. There were no details on the terms on paper. They wanted us to come in and clean “get paid to do nothing” according to boss. We cleaned and did a few projects for 5 weeks back in May. We were paid double the hours we actually went in for. We stopped going in when nothing was left to do and when we went back on full time unemployment while we waited for them to decide to reopen. Now we are getting ready to reopen 3 months after we have been off payroll. They are having us come in to re-clean and set up things to prepare to open but we aren’t getting paid because they say we owe them for the hours they paid us for with the ppp back in May. Can they do this?

    2. As Covid hit NY my employer of five years sent me a letter notifying me that my position was eliminated and to apply for unemployment. I did so and now, two months later am possibly going to be offered a rehire. I know this from someone whose position was not terminated. My question is that if I am sent a rehire letter, dies it have to be for my same job, same salary and benefits? He paid 100 percent of our health insurance? I also know that there is. No work currently and he is closing the office and moving it to the shop so this is likely a temporary thing.

      1. That’s a labor law question and not related to PPP. You’ll need to ask an employment attorney familiar with your state’s labor laws or your state Department of Labor.

  86. My employees are all part time – and with the PUA and Unemployment, they are making double being on this assistance. I was just approved for PPP loan and no one wants to come back to work. What do I do? HELP!

    1. Traci – PPP is designed primarily to help keep employees on payroll. You’ll have to decide whether it’s the right fit for your business. The Department of Labor reminds unemployment claimants who have been placed on temporary layoff or furlough related to COVID-19 that they must return to work if called back by their employer. Refusal to return to work, when being offered the normal rate of pay and number of hours per week, may result in the termination of unemployment benefits and the need to repay certain benefits.

      1. What if you are an employee… with an owner who has ppp… and is only giving 20 hours a week… can I still apply for lost wages.. from UI ?

  87. I averaged 28.5 hours per week in 2019, however although my job is non essential as an esthetician, my employer has required me to work 40 hours per week just sitting in the office finding busy work in order to collect my average pay from 2019 when I worked only 28.5 hours per week. Is this legal?

  88. My employer is paying out our wages as an upfront payment for the next 8 weeks, but is going to reduce our commissions after the forgiveness to reclaim the payroll money to pay other bills. Is this allowed after the forgiveness?

      1. My employer got the PPP loan. Most of us are tipped employees. They only chose a select few to bring back day one after they got the PPP loan. I was brought back week 3. In addition, they are telling us that the funds end the day we open, so on May 26 we will start being paid 2.50/ hour plus tips (@ 50% occupancy). The employees feel that we should all get paid for the entire 8 weeks, or at least the time that we were asked to come back until the end of the 8 weeks. We don’t understand why we are being told that it “ends” when we open.

    1. I’ve worked for a resteraunt for 17 yrs as part time. I was laid off for 7 weeks and asked to return. I did return to less quantity in customers so my boss limited the amount of servers when we returned because we didnt have the normal amount of customers coming to dine in. In the second week after I returned the corporation received a loan and to have loan forgiveness they need to use 75% of that loan in eight weeks time twards payroll. For a server this means that if you dont make minimum wage then the resteraunt makes that up to you on your weekly check/pay. Servers usually serve because we make more then minimum wage. Since my resteraunt received this loan, they are over staffing in ratio of how many tables are available as well as how many customers we have dining in….all so the resteraunt/corporation , can pay servers the make up to reach minimum wage. They have said that we all must work 30 hours a week so that means 5 servers on 1 shift and we are lucky to see 5 tables per shift. How does the resteraunt come out in the good???? Well when you have too many servers and not enough customers, servers are getting 1 or 2 tables per shift now ( servers are used to making very well, well over minimum wage). The corporation is only worried about using that loan for payroll so they can get loan forgiveness as long as they use 75% of that loan twards payroll. They dont care that the servers used to make 12-15 dollars an hour! They now want to put as many servers on the floor as possible because resteraunts have to make up minimum wage at least when servers cant claim minimum wage.

      So we are expected to return to work for much less then we used to make at the same job so the corporation that took the loan can get loan forgiveness and then keep 25 % of that loan.

      Is this really legal??? Where I work they demand that we return at 30 hours a week, while they are over staffing so they can pay out that loan. There are workers there that have been there for yrs and were always part time due to another job. Now they are telling those workers they dont need them if they cant work 30 hours a week and that they will except thier resignation!?!? They never quit or resigned! Is that legal for a resteraunt to get rid of employees that cant work 30 hours when before they never did?

      I just dont see how it’s fair or legal for any resteraunt to demand too many servers on a shift just because they know that’s the only way the business will be able to use up the loan money for payroll because they have to make sure that servers that dont make minimum wage gets at least minimum wage, hence, they use that loan money to make it up to servers. I’ve gone from making about 14 an hour to making minimum wage!!!!!!!!!!!! Is there any laws that protects me if I quit due to the decrease in my wages?

  89. I have a question I know that my employer got the PPP loan. And he is not using it to pay payroll. He’s keeping it. He doesn’t care if he hast to pay it back with interest but he is not paying any of his employees. Also all of the employees got denied unemployment insurance benefits. So I think that this was a bad idea because the people that really need the money are NOT getting it. I feel like my boss is doing really shady stuff, in order to keep the money and not do what he supposed to do with it. I know that this is correct because I am the person who does the payroll. I have not been paid since mid March. What happens if that is correct

  90. Everyone’s answering question for employers but what about employees who are just being left in the dark to know if they are being given all information correctly or mite have any questions …

  91. Im a Dental Assistant and our Office has been shut down except for emergencies. My employer is approved for a PPP loan. This means all of the employees will go off unemployment and she will pay us. Can the Dentist make us work in the office if is is non-essesial? Doing menial jobs?

  92. I am A PT employee if there is no work for me am I still included for the PPP loan of my employer? If the employer can find something for me to do are they required to bring me back to work? Thank you.

  93. Is an employer allowed to “bank” hours that you don’t work and have you pay them back later if they pay you your full 40 hr weekly amount but you do not end up working all those hours in a week due to the fact that your business is either not busy enough or that you can’t say keep proposer social distancing with your co-workers?

    1. I work in the restaurant business and my boss had us come in to clean and repaint all week and said we had to do this in order to get our payroll protection check

  94. So I am an employee working for a company that has been approved and accepted the ppp loan. I used to work 50-55 hours a week and now am reduced to no more than 40. Does my employer acceptance of this loan make it so they now have to pay me that difference. What about the people at my company that also have hours reduced. Would they have to pay them in full??

  95. if my employees are straight commission and I pay them 75% with payroll protection. Do I have to pay them commissions?

  96. I like Jill am a restaurant worker with a low hourly wage, I depend solely on tips. The restaurant closed in March and now my employer has contacted me to come back to work in order to clean and do online training. (Not exactly what I was hired for)The rate is more than min wage but a lot less than I typically would make including my tips. If I’m collecting unemployment am I required to return to work and forfeit that?
    Thanks in advance!

    1. I also want an answer to this question!! I’m in the same situation although PPP has not been approved for my employer yet. I’m waiting in fear for the day they make some similar offer to us because I don’t want to lose my UI benefits. I believe in most states if your wages are significantly reduced that is considered a valid reason to refuse the offer, but you should check your state’s dept of labor FAQs. How this applies to the pandemic and PPP is what I want to know. Please help us figure this out!

    2. I’m wondering the same thing. I work in a restaurant, pay is mainly coming from tips, but now my employer says we are not allowed to keep our credit card tips. None of the employees know where the tips go. I made almost $400 in credit card tips yesterday and didn’t keep anything. My paychecks do not change, so I don’t see how the tips are being added to my check. I was told by a coworker that they are keeping our tips to pay towards the loan. Is this legal???? Please help.

  97. I work in accounts payable. The last 3 weeks my hours have started to dwindle. I am now only working 3 days a week. I have been using my personal/vacation time to compensate the loss. My employer received the ppp. Do I keep using my personal time to cover lost hours? Or does the ppp cover that? I only have 4 days left to use.

  98. What are the steps to prove I used the money for what it was attended for. Besides keeping receipts. Do I send copies somewhere?

  99. I am a restaurant worker who makes a low hourly rate plus tips. My company is going to do the PPP loan. How will i be paid for my rate plus tips? What does my weekly paycheck look like for those 8 weeks as a server?

  100. I have applied for the loan my business has almost no people coming in the door. I’m a small vet clinic that only does vaccines and spay/neuter No emergency medicine whatsoever for pets. I also am in a state where stay at home order is in place . Can i keep my staff home and just pay them using the loan or do they have to be sitting at work to be able to get the funds ? I can have them clean more but they have already been doing that. I just want to keep them safe and at home but be able to pay them until we come off the stay at home order . Please help

    1. Cardroom employee for 9yrs unemployment benefits received from March 15 till may18th employer received ppp loan back on payroll for 8 weeks only not able to open till Sept will be back on furlough on June 29th only got paid so employer can get forgiveness employer have us a choice either receive 3 checks or sign a voluntary denial of work which would disqualify me from receiving uneployment benefits can I still receive benifits after im furloughed again because we wont reopen til sept. Employer said loan on cover 8 weeks of payroll . in only doing this because my employer said to .

  101. We have employees that are unresponsive to requests for what kinds of tasks they are able to do and if they are available. Are we required to pay them anyway, even though we have other employees willing to continue to work?

      1. Ok, ok. So what you have said in all these answers is an employer can get a ppp loan that he is supposed to use to pay his employee, but if he doesnt care about loan forgiveness, he does not have to give employee a dime of it???