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  1. #1
    Join Date
    May 2020
    Posts
    1

    Default Ppp Loan and No Backpay

    My question involves labor and employment law for the state of: Illinois
    I work for a small business and since the type of business is considered inessential I have been home since March 2020. My co workers and I were encouraged by our employer to not file for unemployment because they were applying for the PPP loan offered by the government. 9 weeks later they managed to get approved but this was after the government changed the rules and now none of us will get any back pay. If I file for unemployment now to try and recoup very much needed lost wages do my bosses have any right to retaliate?

  2. #2
    Join Date
    Nov 2013
    Posts
    6,804

    Default Re: Ppp Loan and No Backpay

    You are entitled to back pay to the day the business closed if your employer received a PPP loan. 75% of the loan is to pay non-layoff workers and 25% of the loan is to pay business overhead. So if your employer isn't paying your wages as a non-layoff worker he is going to have to pay back the loan. That is his problem not yours.

    Ask your employer if he is going to pay your wages and if not, tell him you are going to apply for UI benefits if you are an employee or apply for PUA under the CARES Act if you are an IC, self-employed, or a gig worker.

    If your boss doesn't pay your wages he took the PPP loan on fraudulent grounds. The government didn't change the rules on the CARES Act. The loan (75%) goes to pay his workers from the day they closed retroactive to April 4th.

    The Paycheck Protection Program is a loan designed to provide a direct incentive for small businesses to keep their workers on the payroll. SBA will forgive loans if all employees are kept on the payroll for eight weeks and the money is used for payroll, rent, mortgage interest, or utilities.
    After 8 weeks you would file for UI benefits if you are not back to work. If he doesn't pay you, file now for UI.

  3. #3
    Join Date
    Oct 2016
    Posts
    3,805

    Default Re: Ppp Loan and No Backpay

    If the employers don't use the PPP loans to pay workers during the covered period they will have to repay the loan.

    Also, there is no automatic data exchange between the state UI agency and the SBA process. I have no idea why they would tell you to not apply and since they are clueless about that there is no telling how they might react if you do file for UI.

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