Treasury Payroll Support Program Agreement

The Treasury Payroll Support Program Agreement: What You Need to Know

In response to the economic impact of the COVID-19 pandemic, the United States government initiated a program called the Payroll Support Program (PSP) to provide financial assistance to airlines. The Treasury Department manages this program and has recently released information regarding the PSP Agreement that airlines must enter into to receive funds.

Here’s a breakdown of what you need to know about the Treasury Payroll Support Program Agreement.

What is the Payroll Support Program?

The PSP is a program that provides financial assistance to airlines in exchange for certain commitments, including maintaining a certain level of employment and not furloughing workers through September 30, 2020.

The initial round of PSP funding was included in the CARES Act, which was passed in March 2020. An additional round of funding was authorized under the Consolidated Appropriations Act, 2021, which was signed into law in December 2020.

What is the Treasury Payroll Support Program Agreement?

The PSP Agreement is a contract that airlines must enter into with the Treasury Department in order to receive PSP funding. The agreement outlines the terms and conditions of the financial assistance, including the amount of funding the airline will receive and the requirements the airline must meet in order to be eligible for the funding.

Some of the requirements outlined in the agreement include:

– Maintaining a certain level of employment through September 30, 2020

– Providing certain financial information to the Treasury Department

– Abiding by certain restrictions on executive compensation and stock buybacks

– Agreeing to certain limitations on dividends and share repurchases

What are the consequences of not meeting the requirements?

If an airline fails to comply with the requirements outlined in the PSP Agreement, they may be required to pay back some or all of the funding that they received. Additionally, the Treasury Department may impose other penalties or sanctions.

It’s important to note that the PSP Agreement is a legally binding contract and should be taken seriously by airlines.

What else do airlines need to know about the PSP?

In addition to the PSP Agreement, airlines must also comply with other requirements in order to receive PSP funding. These include:

– Providing regular updates on their financial condition to the Treasury Department

– Maintaining certain air service levels

– Abiding by certain restrictions on the use of funds

Airlines should consult with legal and financial experts to ensure that they fully understand the requirements of the PSP and the PSP Agreement.

In conclusion, the Treasury Payroll Support Program Agreement is a critical component of the PSP that airlines must comply with in order to receive funding. Airlines should carefully review the agreement and ensure that they fully understand the requirements before signing. As with any government program, noncompliance can result in serious consequences, so it’s important to take the PSP and the PSP Agreement seriously.