COVID-19 What Every Small Employer Should Know
March 21, 2020
Dr. Michael Burcham
Full document: COVID-19 What Every Small Employer Should Know
Q: There is a lot of information about businesses under 500 employees, but I'd like to keep this conversation to those with businesses under 50 employees. While I know you are not an attorney and are speaking on how your understanding the Families First Act that just passed, can you break it down for what businesses with under 50 full-time employees need to know?
• The language in the Families First Coronavirus Relief Act refers to “Employers with 500 or fewer employees” but the FMLA regulations referenced indicate “More than 50” employees. So there is some confusion.
• The legislation stipulates that the Department of Labor (DOL) can exempt businesses with fewer than 50 employees from providing workers with paid emergency leave “when the imposition of such requirements would jeopardize the viability of the business.”
• The DOL is expected to comment more on that this coming week.
Q: How will health insurance work for businesses who need to let go of employees but want to help out?
• An employee who is furloughed (not terminated) should be eligible to retain their health insurance through their employer.
• Generally speaking if on furlough, they are not working (for a week or longer), the employee should be able to collect unemployment.
• Double check the benefit plan, the PEO or speak with your benefit broker regarding how they treat furlough to ensure benefits are available.
• Laws vary state by state, there is not a centralized resource for this information, so consult your own benefit plan and/or legal counsel.
• When does a furlough become a layoff? While there’s no hard and fast rule on when a furlough becomes a layoff, if it’s going to last longer than 2-3 weeks that’s really a layoff. Temporary Layoff is one that lasts under 6 months. Employer may start as furlough and after 2-3 weeks put out notice: “we’ve had you on furlough, we have to convert to layoff, which we anticipate is temporary, and we will address when crisis passes.”
Q: How much does unemployment payout? The question being, is it better for your employee to be let go and get unemployment or to have a 25-30% pay cut and then possibly be let go later? What's in the best interest of the employee?
• Unemployment typically pays 60% of wages - but each state has a minimum payment and a maximum payment.
• Every state has its own unemployment program run in conjunction with the federal government. The rules for calculating unemployment benefits and the requirements for claiming benefits will vary depending on the laws of the state you live in.
• Each state has a minimum payment and a maximum payment. For example, in Tennessee, the minimum weekly amount of $30, and a maximum weekly amount of $275.
Q: What are your thoughts on possible legislation going on this weekend and what, as small business owners, and employees of small businesses, that we need to be fighting for?
• SBA: Equal treatment under the SBA Economic Injury Disaster Loan Program.
• FFCRA: Ability to access the same support outlined in the Families First Coronavirus Relief Act (FFCRA) that is currently outlined for employers with more than 50 but less than 500 employees (DOL will comment this week).
• Access to all the support laid out in Division A of the Coronavirus Aid, Relief & Economic Security Act (in the senate now).