COVID-19 has changed the way a lot of businesses are operating. If you are facing the unfortunate reality of laying off staff due to the pandemic, you are not alone and the CARES Act offers relief.
Organizations that pay directly into the unemployment compensation system should not see an increase in their unemployment comp tax rate if their employees start to receive benefits.
For self-funded organizations, the CARES Act allows organizations to pay back just 50% on the claims where employees are receiving compensation due to the pandemic. Unfortunately, there is not a lot of guidance on how costs will be recouped by providers so check with your legal team and be aware of any future changes.
There is also assistance for providers who don't need to fully lay-off staff, but rather reduce their hours. The good news - employees with reduced hours are likely eligible for unemployment compensation as these benefits are not all or nothing. Under the CARES Act, employees should even be eligible for the additional $600 a week. Again, tax rates shouldn’t increase if employees were partially laid-off due to the pandemic.
Of course, not all instances of unemployment come from a reduction in staff. With schools and daycare's closed, employees who are the sole caretaker of children could be eligible for unemployment compensation if they're having trouble finding adequate supervision.
The CARES Act also covers employees with underlying health conditions such as COPD or asthma that would put them at higher risk if infected. For employees who are otherwise healthy but refusing to work, keep the communication open about the steps your organization has taken to keep them safe. If they seek unemployment benefits, let your local office know and ask for advisement. This will go into that employee's record and be left to the unemployment office to determine whether they are eligible.
Finally, with unemployment compensation, there is a general rule of thumb regarding PTO (Personal Time Off). The law in Pennsylvania says that an employee SHOULD use all PTO before applying for benefits, though it does not say they MUST. If an employee is using PTO, they should still apply for unemployment benefits right away. The system is way over capacity and applications are taking a while to process.
Remember, each state is different. Make sure to speak with your legal counsel to get the right advice for your organization.
Stay safe and healthy.
A list of state unemployment websites can be found here.
This blog is meant for informational purposes and is not intended to convey legal advice.