Hi Jeanne, So, quick answer, if someone doesn’t want to come to work, that doesn’t impact your FTE reduction adjustment. The quote below comes from the 3508 loan application forgiveness application and I boldfaced the relevant parts…

FTE Reduction Exceptions: Indicate the FTE of (1) any positions for which the Borrower made a good-faith, written offer to rehire an individual who was an employee on February 15, 2020 and the Borrower was unable to hire similarly qualified employees for unfilled positions on or before December 31, 2020; (2) any positions for which the Borrower made a good-faith, written offer to restore any reduction in hours, at the same salary or wages, during the Covered Period or the Alternative Covered Period and the employee rejected the offer, and (3) any employees who during the Covered Period or the Alternative Payroll Covered Period (a) were
fired for cause, (b) voluntarily resigned, or (c) voluntarily requested and received a reduction of their hours. In all of these cases, include these FTEs on this line only if the position was not filled by a new employee. Any FTE reductions in these cases do not reduce the Borrower’s loan forgiveness.

I always do a bad job guessing at what Congress might do… but given the burden to banks and borrowers related to the accounting and the substantiation, I would not be surprised if there’s some small threshold. $150K seems high to me. If someone got this much free money, seems like they should prove to taxpayers they “did it right”… and that they should have ability. But what about borrowers who got $10K, $20K or $50K? Yikes. Good point, Jack. Thanks for posting.

Agree. So in addition to just having SO much cost that even a percentage of the eligible amount adds up to enough, other ways to wiggle out of the FTE and salary cut reduction adjustments exist. Good point. Thank you.

I saw the same thing. Most likely it will pass and that will eliminate the concern for about 70% of the loans.

_____ The Borrower was unable to operate between February 15, 2020, and the end of the Covered Period at the same level of business activity as before February 15, 2020 due to compliance with requirements established or guidance issued between March 1, 2020 and December 31, 2020, by the Secretary of Health and Human Services, the Director of the Centers for Disease Control and Prevention, or the Occupational Safety and Health Administration, related to the maintenance of standards of sanitation, social distancing, or any other work or customer safety requirement related to COVID-19.