What are “Full Time Equivalents” (or “FTE”) under the CARES Act, as they relate to PPP loan forgiveness? We did some digging and found several helpful links. First, is the healthcare.gov website that has an FTE calculator. According to healthcare.gov, “full time” is an average of at least 30 hours a week for more than 120 days/year. The calculator on the above link also has a “Learn how FTEs are calculated” link that gives a basic description. We played with the numbers. Say an employer had 10 full time employees and 158 hours of part time work, the calculator converted the part time work into 5 more full time employees. The basic calculation is: full time employees (those working 30 plus hours per week), plus the number you get when you divide total part time hours per week by 30. Here is an article from AccountingTools.com that further explains the calculation. Additionally, Section 16 of this CLA article describes how FTEs may be calculated under the PPP.
Regardless of which method you may prefer above, we caution you that until SBA issues regulations under the CARES Act, any such calculation is merely an “educated guess.” Please see and review your information with both your attorneys and your accountants as you prepare your case for forgiveness to be presented to your banker. This can be a real challenge for those whose 8 week period for determining PPP fund use has already begun!
If you need help, don’t hesitate contacting our business attorneys at Schober Schober & Mitchell, S.C. at (262)785-1820.