Given the turbulent and uncertain circumstances surrounding the impacts of the coronavirus and stay-at-home orders, many companies are making hard decisions about laying off their employees. Here are a few thoughts to consider.
"Furlough" vs. "Layoff": Furlough is usually temporary while a layoff may be temporary or permanent. There is usually no legal commitment to rehire an employee unless required by a collective bargaining agreement or employment contract or possibly if you fall under the WARN Act. It is important not to create a promise or a legal obligation to rehire and explicitly state that nothing affects their rights under employment at will.
Hiring back employees who are furloughed: Re-complete new hire paperwork such as I-9's and W-4's and, if possible, reinstate all seniority benefits (leave, pay grade, etc.) to pre-furloughed levels upon rehire. If allowed by your carriers, waive new hire eligibility requirements for benefits such as health care and 401k participation. If possible, letting your employees know this prior to the layoff will provide some reassurance to them during this difficult time.
Unemployment is changing: The federal government has relaxed many unemployment requirements allowing the states to do the same. Several states have waived the 7-day waiting period and the looking-for-work requirement for most positions. While you cannot guarantee an employee will receive unemployment, you can assure them that you will not dispute their appeal if they are denied and need to file one.
Final Pay: Follow your state laws regarding timing of paying employee wages for hours worked. Some states require same day payout while others allow you to wait until the next regular payday. Notify employees when they can expect this pay.
Benefits: If an employee has health insurance coverage, let them know their options under COBRA and if you are choosing to pay some portion of their COBRA premium and/or what their obligation under COBRA will be. In addition, you may want to let them know if your state is re-opening its ACA marketplace health insurance pools.
Paid Time Off: Some states require employers to pay out available PTO upon separation. If your employee's state does not, then you can require them to use PTO, pay it out, or allow them to save it for later in the year. You should follow your established policy but can make a one-time exception. Please note the Families First Coronavirus Response Act does not allow employers to require employees to use other PTO in certain situations.
Please reach out to Affinity HR Group If we can assist with any specific situation you may have.
