The impact of COVID-19 on businesses has varied from one company to the next. It could be as extreme as a complete shutdown of the company to a loss of production or lack of work. And, the loss of production/lack of work varies from one business to another. Regardless of the level of impact businesses are facing, employers have tough decisions to make that impact: (i) their employees and their families as well as (ii) their businesses. As an employer, what are your options? What do you need to consider? And, what should you be communicating to your employees?
Based upon governmental recommendations or other reasons related to COVID-19, businesses are being forced to shut down completely or partially or are experiencing a lack of work/loss of production. What are an employer’s options?
- Many employers already have implemented or are considering temporary layoffs. If an employer has not implemented or considered temporary layoffs, they will likely be considering them soon. These layoffs could be full or partial layoffs.
- While this isn’t common, some employers may be financially comfortable enough to provide their employees with a certain time period of paid leave due to COVID-19.
- Another option would be a combination of options 1 and 2 above, where an employer provides a certain amount of “separation pay” simultaneous to necessary layoffs. Such “separation pay” is dependent upon the employer’s ability. Like option 2 above, this option is not going to be as common as option 1.
For each employer, the option that works best will be specific to the employer, its’ business, and its’ particular situation. The option that works best for each employer and their employees will be dependent upon various factors, including: (i) the nature and size of the business (e.g. essential or non-essential); (ii) the business’ financial situation; (iii) the governmental recommendations and orders; (iv) the ability for employees to work at home; (v) the impact of COVID-19 on the employer’s business and its services/products; and (vi) other related factors.
What Do Employers Need to Consider?
Whatever situation your business is in at this time, the impact is undeniable. From a human resource and employment perspective, other important items that employers need to keep in mind:
- Like everyone, your employees are scared in this unprecedented and uncertain time. Any assurances that employers can provide to their employees, about their livelihood and the benefits that you provide them on a regular basis, will be helpful. For instance, if you are implementing layoffs, determine the effect on and your options regarding your employees’ health insurance and/or retirement benefits.
- Make sure you are communicating with them. If you are not able to meet with them safely in-person, communicate with them via other appropriate methods, e.g., teleconference, telephone, email, letter, etc. The method of communication will, of course, be dependent upon the information you want to communicate as well as the nature and size of the specific business.
- Be sure to provide your employees with the necessary information and resources. For instance, if you are implementing temporary layoffs, provide them with resources, e.g., phone number and on-line link(s) to file for unemployment compensation benefits. Depending upon the state in which you are located, there will be specific information on filing for unemployment compensation benefits. In Ohio, for example, the Ohio Department of Job and Families Services is asking employers to distribute to their employees a Mass Layoff Instruction Sheet, upon layoff due to COVID-19, to expedite the claims process.
- With layoffs, you will also want to determine how health insurance and similar plan benefits might be impacted. Provide employees with information on how their benefits might be impacted and how this will be handled.
- The following information should also be included in your communications with your employees:
- An appropriate explanation on your business’ situation and how it impacts them; and
- A time frame within which you will provide them with an update as to the status of the business’ situation, including the status of any temporary layoffs.
Other Governmental Action in Response to COVID-19
- Employers also need to understand what the new federal law, the Families First Coronavirus Response Act, means for them.
- In the Ohio Department of Health’s Stay at Home Order (effective March 23, 2020), there is a checklist for businesses/employers that includes actions for all businesses/employers to take. In addition to specific action items regarding: (i) hygiene, sanitizing, and cleaning and (ii) employees who are sick or have symptoms, this checklist also asks employers to take action on the following items:
- Allowing as many employees as possible to work from home; and
- Ensuring that sick leave policies are up-to-date, flexible, and non-punitive.
- Lastly, for those Ohio employers who have group health plan policies, they need to be aware of Bulletin 2020-03 (the “Bulletin”), issued by the Ohio Department of Insurance. The Bulletin was issued to provide some flexibility with health insurance coverage for Ohio employees.
Nardone HR & Management Consulting (“Nardone Consultants”) advises and represents employers in HR, management, and employment law matters. Nardone Consultants is continuing to monitor (and advise its clients accordingly) on COVID-19 and its’ impact on employers and their employees. For further information or advice on how to best handle your business’ situation, contact Nardone Consultants.
This article provides an overview of a specific developing situation. It is not intended to be, and should not be construed as, legal advice for any particular fact situation.
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