Layoff and Unemployment FAQ
In the midst of a crisis like COVID-19, everything is stressed in unprecedented ways, including the need to make decisive choices with regards to furloughing or laying off employees. We’re hearing many varied questions and have taken the time to compile and answer those questions.
Here is our top questions that have come up during this COVID-19 crisis related to layoffs, furloughs and unemployment insurance:
Frequently Asked Questions
When it comes to laying off or working people part time, what should I do?
The decision will be based on what you expect your workload to be over the next 1-2 weeks, whether you’ve temporarily closed or been forced to close, and other factors based on your current situation. It may be that you use a combination of temporary layoffs, and reduced work hours to balance your team and workflow, this is acceptable.
If you are confident that you need to lay off employees for more than a few weeks with no hours expected, use the temporary lay off option.
If you expect them to work partial hours, even if only a few, use form DE 2063 as described below.
What do I tell my employees if I lay them off temporarily or reduce their work hours?
If you are reducing work hours or temporarily laying off employees, provide our form below (you can adjust as necessary) and tell them to immediately file for unemployment benefits. If you do use an employee for reduced work hours, you can provide them with a DE 2063, which certifies that they are working for you still and they will not need to look for work. It also lets the EDD know how much they earned so they can adjust their net unemployment benefit amount.
Can I lay off employees but still use them for partial hours?
Yes, employees should file for unemployment in the week their hours were reduced or their employment ended.
How can I handle a reduced hours work week so my employees can still get partial unemployment benefits?
Use form DE2063 each week employee’s are on a reduced hours schedule. This form should be completed by both the employer and employee, and mailed by the employee to the EDD.
Will my employee be required to look for work if their hours are reduced and they receive unemployment benefits?
No, not if you use form DE2063. This will let the EDD know that the employee is still working and not required to look for available work.
What sort of benefits will my employees receive if they are on reduced work hours?
Things are changing rapidly as far as the benefit maximum is concerned, but generally employees receive a percentage of their Weekly Benefit Amount that corresponds with their reduction percentage.
Example:
Weekly Benefit Amount: $ 450 (current max)
Normal Wages: $1000
Reduced Wages: $ 700 (30% reduction)
Partial benefit: $ 450 X 30% = $135
Total Pay $ 700 + $ 135 = $ 835.
Again, this is preliminary as everything is changing as far as the maximum benefit.
Do I need to continue health benefits if my employees are laid off?
In the case of a temporary layoff, you can keep your employees on company benefits, and it is up toyou, or your plan documents as to whether or not you continue to cover the employer cost.
Is the EDD Work Sharing Program viable for the COVID-109 situation?
The EDD does provide for a planned reduction in hours using the Work Sharing program. This program requires that you apply and provide the EDD with a list of affected employees. There is a time lag to get setup in this program, so unless you have time before you begin reducing hours, you may want to use the simpler method as described in the Reduced work hours question.
What about the new Paid Sick Leave law, will I have to pay for sick time even if I can’t afford it?
HR 6201 will require that employers with less than 500 employees pay for up to 80 hours sick time and protect the employee’s position for a myriad of reasons for employees directly affected by the COVID-19, however there are exceptions to the job protection provision and you will receive a full tax credit for sick leave that is paid out. There are provisions for employers with less than 50 employees to file for exemption of the sick pay provision (Please refer to our fact sheet on HR 6201 Paid Sick Leave below), will jeopardize the viability of the business.
If I have laid my employees off temporarily, will I be required to pay sick leave if they get sick while being laid off?
No, employees that are completely laid off would not receive sick leave from you, their wages are already covered by unemployment.
If my employees are working reduced hours and they are affected by CODVID-19, will I be required to pay sick leave?
Yes, most likely, but the amount of sick time will be based on their current daily hours, or more accurately, an average of their hours over the last 30 days.
Please contact Infinium HR at info@infiniumhr.com if we can be of any assistance.