New Treasury Department Rule Further Strengthens Religious Liberty Protections for PPP Loan Borrowers

Also Exempts Work Study Students from Employee Counts

May 6, 2020

Mike Batts, CPA


A new Interim Final Rule issued yesterday by the Treasury Department further strengthens religious liberty protections for Paycheck Protection Program (PPP) loan borrowers.  Among its provisions, the rule addresses sex-specific school admissions practices and emergency shelter admissions practices.  The rule also includes the following statement:

In addition, for purposes of the PPP, SBA regulations do not bar a religious nonprofit entity from making decisions with respect to the membership or the employment of individuals of a particular religion to perform work connected with the carrying on by such nonprofit of its activities.

On an unrelated topic, the new rule addresses the treatment of student workers in colleges and universities – noting that students participating in federal, state, or local government work-study programs should not be counted in employee headcounts by colleges and universities in determining their eligibility for PPP loans.  The rule notes that payroll costs for work-study student workers excluded from the headcount should not be included in determining the PPP loan amount.

The full text of the new rule is available here.