Wife’s Employer Has received Paycheck Protection Loan and is paying her based on the lowest commisions she earned.
Hi Terry,
My wife is a commission only sales person for an small cheese distributor. They sell Farmstead and Artisan Cheese to the Hotel and Restaurant industry in the Chicago land area. When the lock-down occurred in mid March her income had a reduction of about 80%. As you can imagine this created a hardship for our family. It took a number of week for her to file for unemployment. The employer was reluctant to sign off on it. When they finally did sign off on it she was able to receive 1 unemployment check that was based on the very small amount of commission she had received for that period. Her employer has recently received the Paycheck Protection Loan and has stated that they will pay her. However she will not be eligible for the unemployment befits because they are going to pay her just enough so that she is above the thresh hold. They are taking a weighted average of her commissions from January 1st to February 15th. This six week period is historically the slowest time of the year for her sales. Are they applying this loan benefit correctly? According to SBA.GOV on the Paycheck Protection Loan it states, “Forgiveness is based on the employer maintaining or quickly rehiring employees and maintaining salary levels. Forgiveness will be reduced if full-time headcount declines, or if salaries and wages decrease.” Do you know how this would normally be applied? We are concerned that they are taking the lowest number to calculate her payment and then keeping the rest. The other non commission employees would be getting there full pay. That is not right is it?
Thanks,
Terry Says
I’m posting this question because you’re not alone. The Treasury Secretary has said that all loans OVER $2 million will be audited to make sure they money did go appropriately to payrolls, as required by the program. BUT any employee who suspects that the recipient of a PPP grant/loan is not treating employees fairly — either in the amount they are paid relative to compensation, or in context of other employees who have similar job responsibilities, is subject to Federal prosecution, in addition to a requirement to pay back the loan.
You might want to post a link to this post and send it to your employer. Perhaps they might want to recalculate their payouts to sustain payroll — or else save some of the money for a long fight with the SBA and IRS!
