One of the questions many franchisees have about the Paycheck Protection Program is whether the forgiveness amount will be reduced if you offer to rehire an employee that you laid off, but the employee declines the offer?
The answer is “no, you will not be penalized.”
The SBA and Treasury intend to issue an interim final rule excluding laid-off employees whom the borrower offered to rehire (for the same salary/wages and same number of hours) from the CARES Act’s loan forgiveness reduction calculation.
Please note that the interim final rule will specify that to qualify for this exception you must have made a good faith, written offer of rehire, and the employee’s rejection of that offer must be documented. In addition, employees who reject offers of re-employment may forfeit eligibility for continued unemployment compensation.