Can I furlough, fire, or cut time, for employees while waiting for my PPP Loan to come through?
Yes. In June of 2020 you have to have as many employees as you did in June of 2019, to get full forgiveness. However, that only applies to having that many employees in June of 2020. If you are not able to sustain that number of employees now there are things you can do until June 2020, to reduce your workforce without penalty.
First, if an employee is furloughed, they can apply for unemployment which is supposed to be increased by $600.00 dollars per-week and will be provided as long as Florida figures out the new regulations that came out this weekend.
Second, you can reduce employee hours, provided they are not dictated by a contract. Even with a significant reduction in their number of hours and pay, employees can apply to unemployment to make up some of the difference. The State of Florida is putting into place this program as quickly as it can. The claim by the employee would be for underemployment.
Third, you can fire employees, however, you need to hire as many employees as you had in June 2019, by June 2020, to get the PPP loan money forgiven.
Fourth, you can force an employee to use paid time off, unless their contract dictates otherwise or they have asked for leave under the FMLA, E-FMLA or the EPSLA.
Basically, as an employer, your goal is to make it through this pandemic, and if you have to do temporary cuts, you may, as long as they only last through May.
Written by: Joshua H. Sheskin Esq.
Joshua H. Sheskin's practice focuses on employment and ADA litigation, with an emphasis on representing and defending local businesses, along with assisting them in preventing future potential lawsuits. A South Florida native, Mr. Sheskin attended the University of Miami for his Masters’ Degree, and the University of Miami School of Law, where he received his law degree with honors.