Senate Passes Paycheck Protection Flexibility Legislation, Goes to President for Signature

Advocacy News
June 4, 2020
By Mark Valentini, Director of Legislative Affairs

On Wednesday afternoon, June 3, 2020, the U.S. Senate passed legislation loosening restrictions for borrowers under the Paycheck Protection Program. H.R.7010 is headed to the White House as of press time where the President is expected to sign the bill into law.

The Paycheck Protection Program was established under the CARES Act, which passed at the end of March when it was anticipated that the COVID pandemic would have subsided. The economy is not expected to fully recover as states slowly begin to reopen in phases. The Paycheck Protection Program Flexibility Act addresses this reality by:

  • Extending the covered period from 8 weeks to 24 weeks, giving small businesses more time to use their PPP loan. Borrowers who received their loan prior to enactment can elect to stay on an 8-week course if they so choose.
  • Loosening the requirement that at least 75% of the loan be used to maintain payroll by reducing it to 60%, with the remaining 40% used for qualified expenses such as lease payments or mortgage interest, and utilities. However, if a borrower does not meet that 60% threshold for payroll the entire loan will need to be repaid.
  • Extending the maturity of the loan to five years, with payments deferred up to 10 months for unforgiven portions.
  • Allowing borrowers to defer payroll taxes for up to two years. Under the CARES Act, a business could either take a PPP loan or defer payroll taxes, but not both.
  • Extending the June 30 deadline to rehire employees, to December 31.

Furthermore, if a borrower is able to document:

  • An inability rehire employees who were on payroll as of Feb. 15 and an inability to hire similarly qualified employees for unfilled positions by December 31, OR
  • An inability to return to the same level of business as of February 15, 2020 or earlier, due to having to comply with government requirements related to COVID-19, THEN
  • The reduction in payroll will not be held against the borrower when determining the amount of loan forgiveness.

Senator Ron Johnson (R-WI) objected to a unanimous consent motion to pass the bill earlier in the day over concerns the 60/40 rule was still too restrictive. With Congress expected to debate another comprehensive COVID relief bill, it is possible those concerns will be addressed at that time. The PHCC Legislative Affairs team is closely tracking these developments and will keep our members posted. Please contact Mark Valentini, PHCC Director of Legislative Affairs at if you have any questions or concerns.

Director of Legislative Affairs
, PHCC-National Association
Mark Valentini is the Director of Legislative Affairs for PHCC—National Association. A seasoned professional with more than 20 years of experience on Capitol Hill and with several national trade associations, Valentini applies his expertise in public policy, workforce and training, and insurance and tax matters to advocate on behalf of all PHCC members.

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