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The Paycheck Protection Program and Religious Freedom Protections [Update]

04.03.2020 Written by: Henningson & Snoxell, Ltd.

Update to this post. Visit our COVID-19 resources page for more information.

Last night the SBA released its Interim Rule regarding the Paycheck Protection Program (PPP) that provided further guidance on religious freedom protections for religious corporations and the like.

According to Section 5 of the Interim Rule, “All loans guaranteed by the SBA pursuant to the CARES Act will be made consistent with constitutional, statutory, and regulatory protections for religious liberty, including the First Amendment to the Constitution, the Religious Freedom Restoration Act, 42 U.S.C. 2000bb-1 and bb-3, and SBA regulation at 13 C.F.R. 113.3-1h, which provides: ‘Nothing in [SBA nondiscrimination regulations] shall apply to a religious corporation, association, educational institution or society with respect to the membership or the employment of individuals of a particular religion to perform work connected with the carrying on by such corporation, association, educational institution or society of its religious activities.’ SBA intends to promptly issue additional guidance with regard to religious liberty protections under this program.”

Although the SBA hasn’t issued its additional guidelines yet, it is highly likely they will be in alignment with the religious freedom protections afforded to churches and religious organizations under the First Amendment of the U.S. Constitution and the Religious Freedom Restoration Act.

Link to rule here.

For more information about these updated guidelines from the Department of Labor, or for guidance for your business, nonprofit or religious organization in light of these guidelines, please contact our Business and Nonprofit Organizations Team.

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