Federal Paycheck Protection Program is Back

The Small Business Administration (SBA) has announced that with the passing of the new stimulus package by Congress, the Paycheck Protection Program (PPP) will re-open starting Monday, January 11 for First Draw PPP loans and Wednesday, January 13 for Second Draw PPP Loans. The original PPP closed at the end of August 8, 2020.

Congress authorized $284 billion toward job retention and certain other expenses through March 31, 2021 to provide continued assistance to individuals and businesses that have been financially impacted by the ongoing coronavirus pandemic. Second Draw PPP loans generally are guaranteed by SMA under the same terms, conditions, and processes as First Draw PPP loans. 


Key PPP updates include:

  • PPP borrowers can set their PPP loan’s covered period to be any length between 8 and 24 weeks to best meet their business needs;
  • PPP loans will cover additional expenses, including operations expenditures, property damage costs, supplier costs, and worker protection expenditures;
  • The Program’s eligibility is expanded to include 501(c)(6)s, housing cooperatives, direct marketing organizations, among other types of organizations;
  • The PPP provides greater flexibility for seasonal employees;
  • Certain existing PPP borrowers can request to modify their First Draw PPP Loan amount; and
  • Certain existing PPP borrowers are now eligible to apply for a Second Draw PPP Loan. 


A borrower is generally eligible for a Second Draw PPP Loan if the borrower:

  • Previously received a First Draw PPP Loan and will or has used the full amount only for authorized uses;
  • Has no more than 300 employees; and
  • Can demonstrate at least a 25% reduction in gross receipts between comparable quarters in 2019 and 2020.


The new guidance documents released include:


PPP guidance on accessing capital for minority, underserved, veteran and women-owned business concerns 


Interim Final Rule on PPP as Amended by Economic Aid Act


Interim Final Rule on Second Draw PPP Loans


Paid Leave –  Continuation of Tax Credits


Mandatory paid leave provisions of the Families First Coronavirus Response Act (“FFCRA”) ended on December 31, 2020.  With the expiration of the federal paid leaves, employers are not legally required to provide any of the FFCRA paid leaves after December 31.  Employers, of course, may still provide paid leave on a voluntary basis and in a publication issued at the end of the year, the Department of Labor stated that employers could receive tax credits for paid leave voluntarily paid to employees until March 31, 2021.  It is important to note though that employers should contact their tax professional for detailed advice. 


Mandatory Vaccinations for Employees


Subject to a few exceptions, such as religious purposes or disability, employers have the right to mandate that employees receive the Covid-19 vaccine as a condition of employment or continued employment at the worksite. The EEOC released guidance that a vaccine provided by a third-party for the employer is not a ‘medical examination’ under the Americans with Disabilities Act (“ADA”).  This position generally gives employers the right to require a vaccination as a condition of employment or as a condition of returning to employment. If an employer does mandate the vaccine, it must be prepared to address employees that are unable to receive the vaccine due to a disability or a sincerely held religious belief.   In those cases, the employer must show that a direct threat exists that an unvaccinated individual will expose others to the virus at the worksite. If a direct threat exists then the employer must see if a reasonable accommodation (ex. remote work) exists. 


If you have any questions, please feel free to contact Mike Nystrom, Executive Vice President, at mikenystrom@thinkmita.org or Lance Binoniemi, Vice President of Government Affairs, at lancebinoniemi@thinkmita.org. They both can be reached at 517-347-8336.