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New Payroll Protection Program flexibility approved

New Payroll Protection Program flexibility approved

June 4, 2020

The Payroll Protection Program (PPP) for employers has been given a boost with enhanced PPP forgiveness. And just in time. Last night the Senate unanimously passed the PPP Flexibility Act that was passed last week by the House. It is expected to be quickly signed into law by President Trump. Some of the general highlights include:

  • The non-forgivable balance of loans will amortize over five years instead of 2 years.
  • The period for allowable forgivable expenses expands to 24 weeks instead of 8 weeks. Borrowers can still choose to use the 8 weeks.
  • The safe harbor for restoring full time employee (FTE) headcount is now 12/31/2020.
  • The threshold for covered payroll expenses is 60%, instead of 40%.

As a positive note, for businesses that have been badly hit by COVID-19, this legislation will give them more of a chance to live to fight another day. And for those businesses who are down a bit, stable or growing and received a PPP, this new extension should give an extra windfall to grow and expand.

Now, before getting too excited, there are two things to keep in mind.

  1. As in all legislation, the devil is in the details, and the details are currently not precisely defined. The law is one thing, the guidance and interpretations of that law are another.  Expect the bureaucrats at both the Treasury Departments and Small Business Administration (SBA) to be spending many late nights, over the next few weeks, trying to explain all of the detailed nuance of all the quasi-English language contained in the new law.
  2. We are also anticipating more legislation coming, so the cycle of flexibility and understanding may start all over again.


As an employer, it is important that you have the resources to navigate this unprecedented time during this crisis. Being able to interpret how to work through the complexity of what is the Payroll Protection Program will ensure your ability to keep your employees paychecks coming, reinforcing your employees’ decision and confidence that made you their employer of choice, while ultimately contributing to continued business growth and success. We are constantly working to keep you updated on these programs and others both now and in the future. Find out more about our expert perspective by starting a conversation here now.