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New PPP Guidance Clarifies Affiliation Rules If a Business Sponsors an ESOP

The Paycheck Protection Program and Health Care Enhancement Act (the “PPP/HCE Act”), signed into law on April 24, 2020, clarified how the affiliation rules apply to businesses that sponsor employee stock ownership plans (“ESOPs”). According to the PPP/HCE Act, for purposes of the Paycheck Protection Program, a business’s participation in an ESOP will not result in an affiliation between the business and the ESOP (or with the participants in the ESOP).

A copy of the PPE/HCE Act can be found here.

The lawyers of our Employee Benefits and Executive Compensation Practice Group are readily able to assist companies on a nationwide basis with implementing sophisticated benefit plans and providing answers to their most challenging compensation issues. Additionally, our lawyers are well aware of the daily employee benefits challenges facing companies of all sizes and are capable of helping in-house lawyers and human resources personnel with the day-to-day advice and guidance necessary to properly administer employee benefits plans.

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