The amount of your loan forgiveness will be lowered proportionally if you reduce your full-time equivalents (FTEs). We are awaiting guidance from the SBA defining FTEs and how to count them. In general, FTEs include Full Time and Part Time Employees. Employees are generally counted as one FTE if they work hours established as the standard workweek, while employees who work less than the standard hours are listed as a partial FTE. For example, if the guidance establishes the standard work week as 40 or more hours, then any employee who works, on average, 40 or more hours per week, will count as one FTE, while those working less would count as a partial FTE. Further, while the CARES Act provides employers an exemption for re-hires, the SBA has not yet provided guidance on how the exemption will apply. Thus, if an employee worked 30 hours on average during a standard work week established as 40 hours, the employee will count as .75 FTE. Our Loan Forgiveness Estimator can calculate how any decrease in FTEs during the covered period will affect the eligible forgiveness amount. Formula. Reductions Based on Reductions in # of FTEs:
Divide the average number of FTEs employed per month* during the covered period by either:
Option 1. Average number of FTEs/month employed by the borrower from February 15, 2019 to June 30, 2019 OR
Option 2. Average number of FTEs/month employed by the borrower from January 1, 2020 to February 29, 2020. You cannot use Option 2 if a seasonal employer.
*For example, if your FTEs during the covered period are 6 and your FTEs during the most favorable lookback period is 10 than your loan forgiveness amount will be reduced by 40%.