COVID-19 FAQ

Other than the point that all actions must be made inside the law and without discrimination, there is no real answer to this question.  Each employer must look at their business, decide what they want to do or can do for their employee and then make an individual decision that works for them.  Here are a few options to consider with some pros and cons.

 Close the office completely and lay off all hourly employees.

PROS

• Maximum and immediate reduction in employee expenses which is likely the or one of the largest practice expenses
• If done before April 1, 2020, reduces or likely eliminates all obligations from State or Federal paid time off laws (see our post “Emergency Legislation HR 6021”)

CONS

• Creates largest burden for employee
• Doesn’t feel good
• Lay off is a termination of employment. It will still be your choice if you wish to simply reinstate employees or go through standard re-hire process once you start back toward full operations.
• You still have to pay your salaried employees

Close the office and furlough all hourly employees

PROS

• Maximum and immediate reduction in employee expenses which is likely the or one of the largest practice expenses

CONS

• If they are still technically employees this may not reduce or eliminate obligations from State or Federal paid time off laws
• Creates largest burden for employee
• Doesn’t feel good
• Although there is no legal delineation of “furlough”, most consider this denotes a temporary situation more like a leave of absence but not receiving pay at this time, typically for economic reasons. The choice to reinstate or re-hire will still be the employers.
• You still have to pay your salaried employees

Try to maintain some pay to employees until you can build back to full operations

 PROS

• Feels good
• Provides some economic benefit to employees during the crisis
• There are likely ways to achieve your goal without maintaining full employee status – reduced hours, maintaining a skeleton staff, etc. You can also consider providing them a large bonus in conjunction with a lay off or furlough.

CONS

• Largest economic burden on the employer
• If they remained employed on April 1st and are entitled to all applicable benefits under HR6021
• There is no magic or predictable time frame when this may resolve. It is likely NOT two weeks which has become an arbitrary standard for how long employers are trying to keep paying employees. Consider what your next step will be at the end of whatever continuation period you decide.

In the final analysis each business owner has to make a hard decision that is a balance that spreads the hurt out in a manner they can live with.

See the prior question on layoff vs furlough.  In some cases, furlough is recognized in the manner most look at it – the individual is still your employee just not receiving pay at this time.  Health care insurance and retirement plans may not agree. In many cases, whether you call it laid off or furloughed, your action will trigger a COBRA event.   You should check with your individual policies to see if your actions are allowed.  

No.  Benefits under HR 6021 cannot be substituted by existing paid time off.  Again, this would only be for action taken after April 1st.  Prior to that time, and pending what your employee policies state, you have every right to ask them to use or allow them to use accrued paid time off during a mandated closure or reduction in hours.  You can likely even deviate from your employee policies given the crisis nature of this event but deviations must be uniformly applied to ALL employees – no potential discrimination.

You can but we consider this a very bad idea unless the employee is exempt.  If you have laid off the employee, you can contract with them for part-time work at a negotiated rate for work at home – make this a short formal signed agreement that spells out the terms of what they are expected to do, how their time will be recorded and how you will pay them.  In most cases this would be an ill-advised action but we are in different times.

 See previous answer. You still should have a short agreement with them clearly stating the terms of the arrangement. You also have to avoid discrimination issues e.g. allowing some to work and not others. Make sure that what you are allowing them to do is a specific function for which they are uniquely competent and not something anyone in the office can do. Also consider looking into any shared work options under your state’s unemployment system.

They can. They are directed to report any wages earned while they are collecting unemployment and it is likely that those amounts may be deducted from their unemployment benefits.

An employee working full time somewhere else should not be included in the PPP loan 

In most states, the amount an individual can receive for unemployment has a cap.  High wage earners are typically not provided anywhere close to their usual wages under the unemployment system.

Retention of unemployment benefits requires that the individual be ready and willing to work if work is available.  If you notify them they have a job waiting and they refuse to come back to work, their benefits will be terminated. 

Closing a business due to economic impact is not a “qualifying event” under HR6021 and therefore does not apply. Any qualifying event that were to occur from April 1 to the time you close would apply. 

The FMLA extension benefits afforded in the Families First Coronavirus protection act still contain the rule that the employee must have been on the job thirty (30) days prior to claiming benefits under FMLA (including the extension).  Technically the employee would have to return to work for thirty days before accessing the FFCRA benefit.  The benefits under unemployment would normally require the same but the CARES act makes clear most all restrictions for unemployment access should be viewed with leniency.  The employee is likely eligible when she returns to work in this scenario but the bottom line is you will need to check with TWC for the best answer.

The FMLA extension benefits afforded in the Families First Coronavirus protection act still contain the rule that the employee must have been on the job thirty (30) days prior to claiming benefits under FMLA (including the extension). Technically the employee would have to return to work for thirty days before accessing the FFCRA benefit. The benefits under unemployment would normally require the same but the CARES act makes clear most all restrictions for unemployment access should be viewed with leniency. The employee is likely eligible when she returns to work in this scenario but the bottom line is you will need to check with TWC for the best answer.