04-18-2020, 10:45 AM
Last week I told a story of a law firm that was intending to get PPP money for all employees and also get it for partners. Somebody asked whether they made more than the $100,000 maximum. The answer was yes, they do, but they figured out a way to get it.
Last Monday the firm apparently filed for both the employees as well as the partners in separate filings. The IRS on Tuesday provided guidance that made the partners ineligible and so the partner applications were withdrawn. Good. But, they did receive the PPP money for employees.
This is a firm that has not and apparently will not lay off anybody. Their work continues unabated. The PPP money will simply replace salaries for staff and associates and the saved money will ultimately go into the pockets of the partners. They did buy laptops for staff who didn't own adequate personal computers and are apparently providing some sort of fast-enough internet access to those who don't have it at home, so they have had some COVID-19 related expenses. But, not lost employees.
I've not seen the PPP application, but if it is not explicit for laid-off workers, or at least having applicants certify a percentage of lost work (e.g. "our business is 30% in decline compared to April, 2019") and providing that percentage in benefits, then we're dramatically misusing these funds, in my opinion.
But, dramatically misusing taxpayer funds wouldn't surprise me in the least.
Last Monday the firm apparently filed for both the employees as well as the partners in separate filings. The IRS on Tuesday provided guidance that made the partners ineligible and so the partner applications were withdrawn. Good. But, they did receive the PPP money for employees.
This is a firm that has not and apparently will not lay off anybody. Their work continues unabated. The PPP money will simply replace salaries for staff and associates and the saved money will ultimately go into the pockets of the partners. They did buy laptops for staff who didn't own adequate personal computers and are apparently providing some sort of fast-enough internet access to those who don't have it at home, so they have had some COVID-19 related expenses. But, not lost employees.
I've not seen the PPP application, but if it is not explicit for laid-off workers, or at least having applicants certify a percentage of lost work (e.g. "our business is 30% in decline compared to April, 2019") and providing that percentage in benefits, then we're dramatically misusing these funds, in my opinion.
But, dramatically misusing taxpayer funds wouldn't surprise me in the least.