From SBA’s FAQ on HUBZone ‘legacy employees’...

      In its “FAQ” Document online, SBA provided several clarifications to its legacy employee provision. This is only a partial list of the clarifications:

• “This provision only applies to employees who resided in a Qualified Census Tract (QCT), Qualified Non-Metropolitan County (QNMC), Indian Reservation, Qualified Base Closure Area (QBCA), or Governor-Designated Covered Area (GDCA) during the relevant time periods (i.e., 180 days before and 180 days after the firm’s certification or certification anniversary date, whichever is applicable).
• This provision does not apply to employees who resided in a Redesignated Area (RA) or Qualified Disaster Area (QDA) during the relevant time periods. However, if an employee resided in a location that was designated as both a qualifying area (e.g., a QCT) and a non- qualifying area (e.g., RA), this provision would apply. (Note: SBA will grandfather in firms that recertified between Dec. 26, 2019 and June 30, 2021, and claimed legacy employees who resided in RAs or QDAs during the 180 days before or 180 days after the firm’s certification/recertification. In addition, firms will be allowed a grace period through Dec. 31, 2021, allowing them to recertify and count a legacy employee who lived in a RA or QDA during any of the relevant 360-day period. However, starting Jan. 1, 2022, recertifying firms will not be allowed to count an employee as a legacy employee if the employee resided in a RA or QDA during any of the relevant 360-day period.)
• A firm is only eligible for this provision if it has a principal office in a QCT, QNMC, QBCA, Indian Reservation, or GDCA.
• A firm is not eligible for this provision if its principal office is located in a RA or a QDA. However, if a firm’s principal office is in a location that is designated as both a qualifying area (e.g., QCT) and a non-qualifying area (e.g., RA), this provision would apply. SBA will grandfather in firms that certified between Dec. 26, 2019 and June 30, 2021, and had principal offices in RAs or QDAs and applied the legacy provision in order to recertify. In addition, firms with principal offices in RAs or QDAs will be allowed a grace period through Dec. 31, 2021, allowing them to count legacy employees at the time they recertify. However, firms recertifying after Dec. 31, 2021 will not be allowed to count an employee as a legacy employee if the firm’s principal office is located in a QDA or RA.”

More Information:
Read the SBA FAQ: https://bit.ly/3gPsrP6

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