Financial Advisory Blog

Armanino’s Financial Advisory blog is your source for thought leadership around cloud ERP and accounting solutions and integrations. Supported by the Cloud Accounting Institute and numerous experts in cloud, finance, reporting, integration, compliance, and technology, Armanino’s Financial Advisory blog features must-read content on what’s happening in the finance industry, case studies, white papers, and much more.

July 23, 2020

I only have two employees who would be under the $100,000 cap for any pay period. Each of these employees only missed a few hours total during the entire eight-week loan period and therefore did not have their pay or hours reduced by more than 25%. Are we okay to use the EZ Application?

Posted by Armanino Financial Advisory Team

This is a good question for which we await additional guidance from the SBA. First, let’s be clear that qualifying to use the EZ Form is not based solely on employees making under $100,000. That rule applies only to whether there was any Salary Reduction Factor — the first part of both the second and third criteria. From the facts presented, it would appear there is no risk of triggering the Salary Reduction Factor as it is unlikely that their pay would have been reduced by over 25% by missing a few hours. However, the FTE Reduction Factor, which is the second part of the second criterion, has no “grace amount” — any reduction at all will trigger that reduction factor. A literal reading of the second qualification criterion would suggest that any unpaid time off — no matter how little the amount — would count as a reduction in the average paid hours of employees.

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