SBA / Treasury FAQ – 36. To determine borrower eligibility under the 500-employee or other applicable threshold established by the CARES Act, must a borrower count all employees or only full-time equivalent employees?

Compliance > CARES Act
Q:  To determine borrower eligibility under the 500-employee or other applicable threshold established by the CARES Act, must a borrower count all employees or only full-time equivalent employees?
 
 
A:   For purposes of loan eligibility, the CARES Act defines the term employee to include “individuals employed on a full-time, part-time, or other basis.” A borrower must therefore calculate the total number of employees, including part-time employees, when determining their employee headcount for purposes of the eligibility threshold. For example, if a borrower has 200 full-time employees and 50 part-time employees each working 10 hours per week, the borrower has a total of 250 employees.
 
By contrast, for purposes of loan forgiveness, the CARES Act uses the standard of “full-time equivalent employees” to determine the extent to which the loan forgiveness amount will be reduced in the event of workforce reductions.13
 
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Footnote:
 
13 Question 36 published April 26, 2020
 
 
This Q&A was based on information contained from the Treasury Department’s April 2020 issuance “Paycheck Protection Program Loans, Frequently Asked Questions,” which has been updated from time to time.  This CARES Act / SBA / PPP related issuance may be found here:  https://home.treasury.gov/system/files/136/Paycheck-Protection-Program-Frequently-Asked-Questions.pdf
 

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