Forgivable Pandemic Loans Don’t Cover Independent Contractor Pay

A small business recipient of a Paycheck Protection Program loan can’t have its funds paid to independent contractors forgiven as “payroll costs” under the Coronavirus Aid, Relief, and Economic Security Act, the Fifth Circuit ruled.

“A careful, commonsense reading of the CARES Act shows that Congress’s design for the PPP was clear: ‘Payroll costs’ do not include payments that small businesses made to independent contractors,” Judge Andrew S. Oldham said Tuesday for the US Court of Appeals for the Fifth Circuit. “The statute made low-interest loans available during the pandemic for small businesses to maintain their payrolls and for independent ...