Further Guidance on the Paycheck Protection Program Flexibility Act

Dude Working on a Computer From Home

Please visit our COVID-19 resources page with more information for business owners and employees.

Updates from the U.S. Department of Treasury and SBA.

On June 10, 2020, the U.S. Department of Treasury and Small Business Administration (SBA) released additional guidance to provide clarity on the recently passed Paycheck Protection Program Flexibility Act (PPPFA). Here are a few highlights:

Loan Forgiveness

The new guidance clarifies PPP loan forgiveness requirements. With the passage of the PPPFA, businesses now only have to use 60% of the loan on payroll costs instead of the originally stated 75%. In the original text, it appeared that if businesses didn’t use a full 60% of the loan of payroll, none of the loan would be forgiven. However, new guidance clarifies that even if you don’t spend 60% or more on payroll costs, you are still eligible for partial loan forgiveness.

As of June 5, 2020, the new loan forgiveness period is 24 weeks instead of eight weeks. If your loan was made before then, you have the option to elect an eight-week or 24-week forgiveness period.

Maturity Date

Under the PPPFA, loan repayment periods have been extended to five years for loans made after June 5, 2020. If you received a PPP loan before that date, your repayment period is still two years, but lenders have the option to extend those to five years.

Loan Interest

If the borrower submits the loan forgiveness application within 10 months of the end of the forgiveness period, they won’t have to make any principal or interest payments until the SBA pays the lender the loan forgiveness amount. If the forgiveness application is not submitted within 10 months of the forgiveness period, the borrower will begin paying principal and interest at the end of that 10 months.

Read the release from the SBA for more info about these updates.

There are still PPP funds available! PPP loans can be approved through June 30, 2020, or until funds run out, whichever comes first. As of June 11, 2020, there’s about $130 billion still available for PPP loans. Visit our blog to learn more about the PPP loans and what they can be used for. Reach out to your lender for more info about the program.

Also on Nextep

Be Aware of These Red Flags For Incorrect Employee Retention Credit (ERC) Claims The IRS is urging businesses that claimed the ERC pandemic-era credit to review their eligibility as a key deadline approaches.  Here are 7 ERC red flags to watch out for that could delay your claim: Claiming for too many quarters: Qualifying for […]
Read more
Remember that new independent contractor rule coming soon? It’s the one that makes it harder for businesses to call a worker a “contractor.” As a reminder, that big change kicks in March 11, 2024. Why should you care? More workers might become employees. This means benefits like minimum wage, health insurance eligibility, paid time off, […]
Read more
Big Change for Gig Work and More The Department of Labor (DOL) has revised its rules for classifying workers as independent contractors, making it more difficult for businesses to do so.  Effective March 11, 2024, this change impacts workers across the US and could have significant implications for businesses of all sizes. New rules make […]
Read more
At least 22 states and nearly 40 local jurisdictions will increase their minimum wage rates on January 1, 2024. Below is a summary of these changes and guidelines to help you comply with your minimum wage requirements. As a reminder, in cases where federal, state, or local regulations differ, the employer must use the law […]
Read more
Get ready to chart your company’s financial course for 2024! To assist in gearing up your company’s budget, here’s a breakdown of some key upcoming financial changes. 2024 Tax, FSA, and Retirement Updates   2024 2023 TAXES Social Security Wage Base $167,700 $160,200 FICA – Social Security (OASDI) 6.2%, up to wage base 6.2%, up […]
Read more
Confused by the ever-changing SUTA (State Unemployment Tax Act) landscape? We’ve compiled a comprehensive list of 2024 SUTA wage bases for each state, making it easier for you to stay compliant and manage your payroll taxes effectively. Simply find your state in the table below and discover the applicable wage base for the upcoming year! […]
Read more
Ah, the holiday season—a time for joy, festivities, and the age-old puzzle of compensating your employees. Let’s demystify the rules of holiday pay for both our hourly (nonexempt) and salaried (exempt) workers. For the Hourly Heroes Picture your business decked out in holiday cheer, but your nonexempt employees are sipping cocoa at home. Under the […]
Read more
Time to mark your calendars! Here are key bank and Nextep holiday closure dates for 2024.  If Nextep is closed on a day that banks are usually open, such as the day after Thanksgiving, no need to stress! If banks are open, we can still process your payroll for that day. However, if banks are […]
Read more
Spoiler Alert: Yes We frequently see a question posed to HR pros: “Do I have to pay my employee if…?” We’ll go ahead and give you a major hint at the outset. In many of the scenarios we see, the answer is yes, you do have to pay your employee. Here are a few scenarios. […]
Read more
What to do as a boss in the age of pay transparency Navigating pay transparency in the workplace can be a delicate balancing act for bosses.  On the one hand, it’s important to be open and honest about compensation, but on the other hand, there may be concerns about privacy and sensitive information. First, a […]
Read more
Shining a Light on Compensation: The Bold Move Toward Pay Transparency Let’s talk about the rise of pay transparency in the United States. It’s a hot topic but also relevant as more companies (and employees!) are demystifying employee pay. Pay transparency is the practice of openly and honestly sharing information about salaries, bonuses, and other […]
Read more
Are You Paying Your High-Earning Employees Correctly? In a recent case, the Supreme Court issued an opinion clarifying the overtime-exempt status requirements under the Fair Labor Standards Act (FLSA).  The ruling emphasizes the importance of the salary-basis requirement for high-earning employees to be overtime-exempt under the FLSA. Here’s what you need to know: Under the […]
Read more

Download Our App


Download the Nextep Mobile App in Apple iOS or Google Play