: PPP loan for business owner who "converted" 1099 contractors to w-2 employees starting from 2020? Due to AB-5 bill passage many small business owners in California reclassified Independent workers (1099) as Employees (w-2)

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PPP loan for business owner who "converted" 1099 contractors to w-2 employees starting from 2020?
Due to AB-5 bill passage many small business owners in California reclassified Independent workers (1099) as Employees (w-2) starting from January 1st 2020.

Now when filing the PPP loan application via chase.com I see following language:

If you do not have employees:

Step 1: Find your 2019 IRS Form 1040 Schedule C line 31 net profit
amount (if you have not yet filed a 2019 return, fill it out and
compute the value). If this amount is over 0,000, reduce it to
0,000. If this amount is zero or less, you are not eligible for a
PPP loan.

Step 2: Calculate the average monthly net profit amount (divide the
amount from Step 1 by 12).

Step 3: Multiply the average monthly net profit amount from Step 2 by
2.5. [This calculation will be performed automatically below after entering your average monthly payroll amount]

Step 4: Add the outstanding amount of any Economic Injury Disaster
Loan (EIDL) made between January 31, 2020 and April 3, 2020 that you
seek to refinance, less the amount of any advance under an EIDL
COVID-19 loan (because it does not have to be repaid). [You will need
to enter this amount below, if applicable. This amount will be
automatically added to your Loan Amount.]

If you have employees:

Step 1: Compute 2019 payroll by adding the following: Your 2019 Form
1040 Schedule C line 31 net profit amount (if you have not yet filed a
2019 return, fill it out and compute the value), up to 0,000
annualized, if this amount is over 0,000, reduce it to 0,000, if
this amount is less than zero, set this amount at zero;

2019 gross wages and tips paid to your employees whose principal place
of residence is in the United States computed using 2019 IRS Form 941
Taxable Medicare wages & tips (line 5c- column 1) from each quarter
plus any pre-tax employee contributions for health insurance or other
fringe benefits excluded from Taxable Medicare wages & tips; subtract
any amounts paid to any individual employee in excess of 0,000
annualized and any amounts paid to any employee whose principal place
of residence is outside the United States; and

2019 employer health insurance contributions (health insurance
component of Form 1040 Schedule C line 14), retirement contributions
(Form 1040 Schedule C line 19), and state and local taxes assessed on
employee compensation (primarily under state laws commonly referred to
as the State Unemployment Tax Act or SUTA from state quarterly wage
reporting forms). Step 2: Calculate the average monthly amount (divide
the amount from Step 1 by 12).

Step 3: Multiply the average monthly amount from Step 2 by 2.5. [This
calculation will be performed automatically below after entering your
average monthly payroll amount]

Step 4: Add the outstanding amount of any EIDL made between January
31, 2020 and April 3, 2020 that you seek to refinance, less the amount
of any advance under an EIDL COVID-19 loan (because it does not have
to be repaid). [You will need to enter this amount below, if
applicable. This amount will be automatically added to your Loan
Amount.]

My question is - Are the workers who got reclassified from 1099 to W-2 starting from 2020 left without anything under PPP program, because:

As per this website they were not in operation as self employed on February 15, 2020. So they can't apply for PPP loan themselves because their self employment business ceased to exist on December 31st 2019?
However, their employer can't include them under his PPP application either, because SBA wants you to use 2019 and not 2020 941 forms to calculate average monthly payroll.

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