In our recent article about how to manage employee communication during COVID-19, we discussed the importance of continuing communication with employees who were let go or furloughed during these unprecedented times. Companies may be forced to make challenging decisions about their employees’ tenure at work. However, company leaders can still help out of work employees by working with them as they navigate the complexities of unemployment.
Our CEO, David Secunda, recently talked with Sarah Vonnahme (a principal consultant at Cura HR) to discuss how to best help your employees through this challenging time. If you are a fan of video, you can check out this conversation on our YouTube channel, or check out the video below. If you enjoy words, keep reading for a great overview of the conversation.
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Complexities Of Unemployment: Furlough Vs. Layoff
One of the first steps to understanding the complexities of unemployment during COVID-19 is understanding the difference between a furlough and a layoff.
According to SHRM, a furlough is a “mandatory temporary leave of absence from which the employee is expected to return to work or to be restored from a reduced work schedule.” On the other hand, a layoff is “generally considered a separation from employment due to a lack of work available.”
Depending on what your benefits program allows you to do, you might choose to word your employees’ unemployment in a specific way. You want to carefully consider what you call it because this might impact any employees you let go, what benefits they can claim, and how long they can claim them.
What Are Work Share Programs?
One option you might choose to consider is a work share program. A work share program allows employers to employ workers at a reduced time while unemployment insurance will cover the rest of the time the employee is not working. It is a great unemployment support program. Your employees can get the full amount they’d get as an employee, but you’d set up a plan with the Department Of Labor to help provide some of that income to your employees.
If your employees want to be eligible for a work share program, often they’ll need to have contributed to the unemployment insurance system in some way. If you can cover some of the hours that your employees work in a week, this is an excellent option for you to utilize your employees as much as possible.
Employee Retention Tax Credit
A new tax credit has surfaced for employers thanks to the CARES Act called an employee retention tax credit. This tax credit can be extremely beneficial for employers who are retaining their workforce despite everything happening around the world. It’s worth looking into if your company wants to continue employing your workers. There are a few stipulations around eligibility for the employee retention tax credit, but these tax credits can help your business tremendously during tax time.
For your information, if you receive assistance from the Payroll Protection Program, you cannot receive assistance from the Employee Retention Tax Credit.
Unemployment: Regular and Pandemic Coverage Details
Right now, there are a lot of changes happening to unemployment for your workers. For example, regular W2 employees have access to the typical unemployment insurance. Gig workers are also eligible for a new type of unemployment insurance called Pandemic Unemployment Assistance or PUA. Both employees and gig workers have access to the Federal Pandemic Unemployment Compensation program, which gives workers an extra $600 during the weeks they collect their unemployment payments.
What If My Employee Earned With A W2, But Also Participates In The Gig Economy?
Our expert, Sarah Vonnahme, suggests that you consider how much you’ve made with a W2 in the last 18 months. If you’ve made $2,500 or more as W2 income during that time, start with applying for regular unemployment, then filing Pandemic Unemployment Assistance or PUA once your regular unemployment insurance is exhausted. If you’ve made less than that, then you’ll want to apply directly to PUA.
Conclusion: Best Practices For Frictionless Unemployment
To wrap up, here are a few more best practices that will help navigate the complexities of unemployment. These will also help the filing process move along as quickly as possible.
- Due to the increased demand for unemployment, your state might have different rules for when people can submit their applications, so be mindful of that as you are applying.
- Make sure you are providing the most accurate information on your unemployment documents. If you don’t, you might have to talk with someone to resolve that information, which has been difficult for those wanting assistance.
- Opt-in to electronic communications. It makes everything easier when it comes to getting your benefits and communicating with the state you are filing from.
- Have all the forms, identification, and information you need with you when you apply to make the process as easy and painless as possible.
- Take advantage of any chat features available on the website. These new features may help you get your questions answered more effectively.