A question regarding losing forgiveness if wages are not maintained as explained below. Someone give me some clarity on this scenario: Employee A averages 10 hours of OT a week Jan - March. During the forgiveness period his hours are reduced to 32 hours. Does the 25% wage reduction threshold consider the OT or not?
Salary/Hourly Wage Reduction. The CARES Act reduces a borrower’s loan forgiveness amount where the employer reduces certain employee salary and wages. Under this rule, the actual amount of loan forgiveness may be reduced if the salary or hourly wages of certain employees were less during the Covered Period or the Alternative Payroll Covered Period compared to the period from January 1, 2020 to March 31, 2020. This reduction applies only for employees whose salaries or hourly wages were reduced by more than 25% during the Covered Period or the Alternative Payroll Covered Period as compared to the period of January 1, 2020 through March 31, 2020. While not referenced in the new guidance, this reduction generally does not apply to employees with compensation in excess of $100,000.
Salary/Hourly Wage Reduction. The CARES Act reduces a borrower’s loan forgiveness amount where the employer reduces certain employee salary and wages. Under this rule, the actual amount of loan forgiveness may be reduced if the salary or hourly wages of certain employees were less during the Covered Period or the Alternative Payroll Covered Period compared to the period from January 1, 2020 to March 31, 2020. This reduction applies only for employees whose salaries or hourly wages were reduced by more than 25% during the Covered Period or the Alternative Payroll Covered Period as compared to the period of January 1, 2020 through March 31, 2020. While not referenced in the new guidance, this reduction generally does not apply to employees with compensation in excess of $100,000.
