PPP Loan Forgiveness — Make Sure You Meet the Staffing Requirements

Henning Schwinum
3 min readJun 9, 2020


Photo by Anne Gosewehr

“You said you’d do it tomorrow,
But tomorrow was yesterday,
You need to step out,
Act now.”

from Act Now by David Hawkins

I think most small business owners will agree: the best part of the Paycheck Protection Program (PPP) is that 100% of the loan can be forgiven — if certain criteria are met. One of those sets of rules is around staffing requirements. After all, the program is meant to keep people employed.

The rules around staffing and forgiveness for the PPP continue to change, so the latest as of today based on an article published by Bench is:

You must maintain the number of employees on your payroll.

Here is the calculation you can use to determine if you have met this requirement: First, determine the average number of full-time equivalent employees you had for:

· The 8-week period following your initial loan disbursement, (A)

· February 15, 2019 to June 30, 2019, (B1)

· and January 1, 2020 to February 29, 2020. (B2)

Take A and divide that by B1. Do the same with B2. Take the largest number you obtain. If you’re a seasonal employer, you must divide by B1.

· If you get a number equal to or larger than 1, you successfully maintained your headcount and meet this requirement.

· If you get a number smaller than 1, you did not maintain your headcount, and your forgivable expenses will be reduced proportionately.


Employees who were employed as of February 15, 2020 and were laid off or put on furlough may not wish to be rehired onto the payroll. If the employee rejects your re-employment offer, you may be allowed to exclude this employee when calculating forgiveness. If any of these conditions apply to an employee, you can also qualify for an exemption:

· They were fired for cause

· They voluntarily resigned

· They voluntarily requested and received a reduction of their hours

You may also be required to demonstrate you were unable to hire similarly qualified employees for unfilled positions, or document that due to safety requirements, you were unable to return to normal operating levels.


You can rehire any staff that were laid off or put on furlough and reinstate any pay that was decreased by more than 25% to meet the requirements for forgiveness. You have until June 30th to do so. If your eight-week forgiveness period ends before June 30, you can still use the grace period if you reinstate headcount and/or pay. Just be sure to apply for forgiveness after June 30.


Do I have to rehire the same employees? Or can I keep my headcount the same, but with different people? From the guidance released so far, it appears you don’t have to rehire the same employees. The SBA’s forgiveness application does not make a distinction between new and existing employees.

If you are rehiring someone that worked for you before you are in a good position to meet the deadline of June 30. But what if you need or want to hire a new employee? Is there enough time to identify and properly vet? Especially for management positions, executive recruiting has often proven to be a 4–8-month process.

The alternative is to work with a partner that has a roster of vetted executives available for immediate hire.


PPP Loan Forgiveness: The Complete Guide

Originally published at https://www.vendux.org on June 9, 2020.



Henning Schwinum

Chief Evangelist for Interim & Fractional Sales Leadership