Part 5: HUBZone Certification-Specific Documents

Owned by Autumn Kyles
Last updated: Oct 18, 2024
8 min read

 

The HUBZone program requires businesses to have their principal office and 35 percent of their employees operating in a HUBZone. There are many nuanced definitions and requirements regarding the principal office and employees, so please review the information below closely prior to submitting an application for HUBZone certification.

HUBZone Eligibility Calculator

During the application process, applicants will utilize the HUBZone Eligibility Calculator to submit information about each employee listed on the business’s payroll during the most recently completed pay periods that account for the four-week period immediately prior to the application date and will indicate the office to which the employee reports at least 51 percent of their time AND whether the employee is a HUBZone resident. The tool will automatically calculate which office is considered the principal office (and whether it is located in a HUBZone) and whether the business meets the 35 percent HUBZone residency requirement based on the information provided by the applicant.

The business will then upload supporting information as indicated in the sections that follow. For the HUBZone program:

  • An “office” is a location owned or leased by the business where employees work.

  • A “telework site” is a location where one or more employees regularly telework.

  • A “jobsite” is a location where employees work to fulfill specific contract obligations (applicable onlyif the business’s primary industry is service or construction).

The HUBZone Eligibility Calculator will prompt you to provide the following information for each employee listed on the payroll for the required periods immediately preceding your business’s application submission date:

  1. Name of each employee.

  2. Complete address for the location where the employee worked.

  3. Description of location (i.e., office, telework site, or jobsite).

  4. Number of hours worked per week at each location.

  5. Indication of whether any of the following circumstances apply to the employee:

    1. Obtained from a temporary employee agency, leasing concern1, through a union agreement, or pursuant to a professional employer organization agreement. If applicable, you must submit a copy of the agreement and proof of payment for billed invoices covering the most recently completed four-week period prior to the application date.

    2. An owner or officer not included on payroll.

The HUBZone Eligibility Calculator will automatically check the HUBZone map to determine whether the address provided for the principal office and each HUBZone resident employee is in a HUBZone.

NOTE:

  • You can check the HUBZone status of any address using the HUBZone map.

  • You may access and save the calculator tool prior to the application process to determine your eligibility.

 

Principal Office Requirements

Your business’s principal office is the location where the greatest number of employees at any one location perform their work. If an employee works at multiple locations, then the employee will be deemed to work at the location where the employee spends more than 50 percent of his or her time. If an employee does not spend more than 50 percent of his or her time at any one location (and at least one of those locations is a non-HUBZone location), then the employee will be deemed to work at a non-HUBZone location. Additionally, in order for a location to be considered the principal office, the concern must conduct business at this location.

For those concerns whose primary industry is services or construction, the determination of principal office excludes those employees who perform more than 50 percent of their work at jobsites. If all of a concern’s employees perform more than 50 percent of their work at jobsites, the concern does not comply with the principal office requirement.

See 13 CFR 126.103 for the HUBZone definitions of “Principal Office” and “Employee.”

The following documents are required to determine and/or demonstrate proof that the business’s principal office is fully operational and located in a HUBZone.

Lease/Rental Agreement OR Deed/Mortgage Statement

  • Provide a copy of a fully executed lease (or rental agreement) or deed (or mortgage statement) for the business’s principal office.

    • The lease/deed must be valid and in effect at the time of the business’s application date. This means it must have a beginning date prior to the application date and end date more than 60 days following the application date.

    • The business’s full legal name or the owner’s full legal name must be identified as being the lessee, renter, owner, or mortgagee of the property identified in the lease/deed.

    • If the deed only includes a parcel description, you must include a property tax bill and/or insurance policy showing the physical address of the principal office location. (Note that the property tax bill and/or insurance policy is for verification of the physical address only—submission of this document in lieu of the required lease or deed is not evidence that the business meets this regulatory requirement.)

  • If the business has a month-to-month lease, the business must provide either of the following:

    • An addendum to the expired lease; or

    • If an addendum to the expired lease does not exist, proof of payment for three months leading up to the application date.

  • If the business is leasing space in a shared workspace facility, the business must provide the following:

    • A lease indicating that the business has dedicated office space that is not shared with other businesses, it is only accessible to the business, and has a lockable door;

    • The lease must indicate that the dedicated space contains sufficient work surface area and furniture and equipment (e.g., desks and chairs) to accommodate the number of employees claimed to work from this location;

    • Proof of rental payment in the form of canceled checks (front and back), bank statements, and/or proof of credit card transactions covering the relevant time period;

    • Photos of the dedicated office space including photos of the full length of the door to the office including the suite number and work stations; and

    • The lease must be at least 30 days prior to the date of application submission, and the end date must be at least 60 days after the date of application submission.

  • If the monthly lease payment amount appears to be significantly below market value, you may be asked to provide additional information regarding the lease agreement.

See the FAQs at http://www.sba.gov/hubzone for additional information related to employees obtained from a leasing concern.
See the FAQs at http://www.sba.gov/hubzone for additional information related to shared working spaces.

Utility Bill

  • Provide a copy of the most recent utility bill for the business’s principal office that shows the period of usage and shows the service location. Examples include bills for electricity, gas, water, sewer, or landline telephone. Note that cellular phone and Voice over Internet Protocol (VoIP) bills are not acceptable.

  • If you cannot provide a utility bill because utilities are included under the terms of the lease, you must provide the following: a citation showing where the lease provides that utilities are included (e.g., “page 2, paragraph 3”) and proof of payment of rent for three months immediately prior to the application date in the form of canceled checks (including front and back and showing endorsement by the bank), cashier’s checks, bank statements, credit card statements, and money orders. We do not accept paid invoices or cash receipts as proof of rental payment.

 

HUBZone Employee Requirements

At least 35 percent of all of the business’s employees must live in a HUBZone, regardless of where they work. (See 13 CFR 126.200(d), see also definition of “Employee” at 13 CFR 126.103.).

 

Payroll Records

The SBA will review a concern’s payroll records for the most recently completed pay periods that account for the four-week period immediately prior to the application date to determine which individuals meet the definition of the term “employee” for HUBZone purposes. For the purposes of the HUBZone program, “employee” means all individuals employed on a full-time, part-time, or other basis, so long as that individual works a minimum of 40 hours during the four-week period immediately prior to the application date. Only individuals who meet the HUBZone definition of “employee” are counted when calculating whether a business meets the 35 percent HUBZone residency and principal office requirements.

The SBA will only accept official payroll records and payroll reports that show, at a minimum: the company’s name; the names of the individuals who performed work during the pay period; the number of hours worked by each employee during the pay period; the wages earned by each individual during the pay period; the taxes deducted from each individual’s wages during the pay period; and the pay period’s beginning and end dates.

Examples of payroll records for the most recently completed payroll periods that account for the four-week period immediately prior to the application date include:

  • A business is on a monthly payroll system, where payroll is processed every calendar month. The business submits its application on July 6. The business must submit payroll records for the payroll period from June 1 to June 30.

  • A business is on a biweekly payroll system, where payroll is processed every 14 days. The business submits its application on July 6. The business’s most recently completed payroll period prior to July 6 ended June 30. The business must submit payroll records for the payroll periods from June 3 to June 16 and June 17 to June 30.

  • A business is on a weekly payroll system, where payroll is processed every 7 days. The business submits its application on July 6. The business’s most recently completed payroll period prior to July 6 ended June 30. The business must submit payroll records for the payroll periods from June 3 to June 9; June 10 to June 1; June 17 to June 2; and June 24 to June 30.

 

Proof of HUBZone Residency

Provide copies of driver’s licenses or government-issued identification cards showing the home address of each HUBZone resident employee. These documents must be unexpired and issued at least 180 days before the application date. You may also provide a copy of the prior, expired document if the current one was not issued at least 180 days before the application date.

Note for residents of Guam: Ensure that any certificates of residency from the mayor of the municipality include a residency start date.

Note: If the document expires prior to the issuance of the SBA’s written decision to certify the business or deny certification, the SBA will request evidence verifying that the employee continues to reside at this address.

If the employee does not have a current driver’s license or government-issued identification card (or if the address listed on such document does not reflect the employee’s current address, or is a P.O. Box), you must provide:

  • Current lease agreement;

  • Deed or mortgage statement. One of the mortgage statements must cover the application date and the other must cover the date 180 days prior to the application date; or

  • Two utility bills for electricity, gas, cable, internet, or landline phone. Cell phone and VoIP bills will not be accepted. One of the bills must cover the application date and the other must cover the date 180 days prior to the application date.

 

Job Descriptions and Proof of Work

If any HUBZone employee worked a total of 40 or more but less than 120 hours during the four-week payroll period, provide a copy of their job description. Job descriptions will need to address, at a minimum: the job title, the individual’s duties and responsibilities, the expected work product, and the general job schedule. The SBA will interpret the failure to submit a job description as an indication that the employee is not performing legitimate work for the business and the individual will not be considered an employee for HUBZone program purposes.

If three or more HUBZone employees share the same part-time job description submitted, analysts reviewing applications will require proof that each part-time individual is performing the work outlined in their job description. Required documentation for each individual includes the following:

  • Evidence of regular communication with the individual’s supervisor (such as email exchanges, progress reports, meeting notes, etc.) during the relevant payroll periods. Provide at least two email exchanges that are not from the same week.

  • Evidence of work product produced during the time of review during the relevant payroll periods.

Additional evidence may include, but is not limited to, the following:

  • Detailed timesheets for the relevant payroll periods

  • Evidence of employee attendance at meetings or training events during the relevant payroll periods

  • Resume

See the FAQs at http://www.sba.gov/hubzone for additional information related to the job description requirement.

 

Effective October 2024