Alaska Delegation Welcomes CARES Act Seasonal-Worker Rule Fix
U.S. Senators Lisa Murkowski and Dan Sullivan, and Congressman Don Young (all R-Alaska) today welcomed a rule change released by the Treasury Department that enables seasonal businesses, to choose a different 12-week expense period when applying for a Paycheck Protection Program (PPP) loan, a period that more accurately reflects their operating payroll. The Alaska Congressional Delegation has pressed the Trump administration for weeks, including in multiple conversations with President Trump and Treasury Secretary Mnuchin, to issue guidance that better accommodates seasonal employers devastated by the coronavirus pandemic.
“In Alaska, the summer tourism season doesn’t get going until late-Spring, and many seasonal businesses have few, if any, employees during the covered period to base payroll on for a PPP loan,” said the Alaska Congressional Delegation. “These great local businesses, already hit with extreme disruptions to travel and tourism this year, were functionally shut out of the Paycheck Protection Program, even though they had employees that they were responsible for paying in May, as well as rent and utility payments due. We were not going to allow this vital sector of Alaska’s economy to slip through the cracks. We thank President Trump and Secretary Mnuchin for working with us to implement this commonsense fix that offers the flexibility seasonal employers need to fairly calculate their expenses, keep their businesses afloat, and their employees on the payroll.”
BACKGROUND:
The PPP, a temporary program operated by the Small Business Administration and established by the Coronavirus Aid, Relief, and Economic Security (CARES) Act, offers small businesses, struggling from the economic down-turn, low-interest loans to cover payroll and certain other expenses over an eight-week period. Under the statute, a business’s loan amount is calculated based on a twelve-week period beginning on February 15 or March 1, 2019. As a result, many businesses with little or no operations or expenses during that time of year found themselves eligible for only minimal PPP loan relief.
Under Treasury’s interim final rule, seasonal employers can choose any consecutive 12-week base payroll period between May 1 and September 15, 2019 to determine their PPP loan amount.
Due to the urgency of the challenges facing many seasonal employers, the Treasury Department has made the interim final rule effective immediately. The rule authorizes all lenders to use the alternate criterion when originating loans for seasonal employers.
The final day to apply for and receive a PPP loan remains June 30, 2020.
