As states begin to ease stay-at-home orders, businesses that shut down to minimize the spread of COVID-19 are starting to reopen. But as some employers are finding out, not every employee is ready to get back to work.
Companies that took out loans under the Paycheck Protection Program (PPP) are worried that their staffs' reluctancy to return to work will put their PPP loans in jeopardy of having to be paid back. (Loans under the PPP are only forgivable if employers rehire the same number of full-time employees they used to calculate their PPP loan amount in the first place.)
At the same time, employees who are turning down call-backs from their employers are worried they will no longer be able to collect unemployment benefits, made significantly richer under the CARES Act coronavirus stimulus bill. The New York Times estimates workers in more than half of states are receiving more in unemployment benefits than they did from their normal salaries.
Recognizing this quandary for employers and employees, here's what the Small Business Administration (SBA) and the Department of Labor (DOL) are doing to address this.
NEW SBA GUIDANCE ON THE PAYCHECK PROTECTION PROGRAM (PPP)
Acknowledging that some employees may not wish to return to work, either because of coronavirus concerns or because they are collecting more while on unemployment, the SBA recently issued new guidance.
This guidance states that businesses will not face penalties so long as they "make a good faith" efforts to rehire employees. They must also explain to employees that they may lose their unemployment eligibility by not returning to work.
The SBA is also encouraging employers to carefully document any communication with employees, in case they refuse to return to work, the evidence of which will be needed when requesting PPP loan forgiveness.
The specific language is as follows; "To qualify for this exception, the borrower must have made a good faith, written offer of rehire, and the employee's rejection of that offer must be documented by the borrower. Employees and employers should be aware that employees who reject offers of reemployment may forfeit eligibility for continued unemployment compensation."
The Pandemic Unemployment Assistance (PUA) program, part of the CARES Act, dramatically expanded the scope of workers who can receive unemployment benefits, including people who are unable or unavailable to work because of certain health or economic consequences of the pandemic, even if their workplace is open.
Nevertheless, the PUA does not allow an employee to remain on unemployment simply because those benefits temporarily pay them more than what they'd earn after returning to work. And as the DOL additionally makes clear, a general fear of exposure to the virus also isn't enough for an employee to refuse employment or quit a job.
That said, some responsibilities fall to an employer before they can order employees back to work.
EMPLOYER RESPONSIBILITIES FOR REOPENING
As businesses reopen, employers must follow guidelines from the Centers for Disease Control and Prevention (CDC), which are intended to protect employees. Specifically, employers are responsible for providing; proper hand-washing stations, additional sanitation options such as hand-sanitizer, personal protective equipment (PPE) such as masks or gloves, and adherence to social distancing recommendations.
Certain states are also enforcing more rigorous standards, such as reducing workplace capacity or requiring temperature checks of employees. These measures will vary by industry and locality, so companies should check their state's DOL for more specifics.
Employers who follow federal, state, and local safety measures and call employees back to work will likely be recognized as providing "suitable work." Employees who refuse "suitable work" cannot qualify for any type of unemployment benefits.
Perhaps it's obvious, but employers must also follow existing Occupational Safety and Health Administration (OSHA) safety guidelines, which predate the pandemic. If companies fail to follow OSHA's existing guidelines, and that creates hazardous working conditions, workers may be able to quit with good cause. In doing so, they may be able to successfully claim unemployment benefits.
In showing good cause for quitting, workers will have to document specific reasons their workplace presents a hazardous environment and notify their employer of the need to eliminate the danger.
If an employer doesn't take action, workers may file a formal complaint with OSHA for investigation.
Change in Job Characteristics
Employees may also be able to qualify for unemployment if an employer drastically changes the way in which they conduct their jobs. This might include permanent changes to an assigned shift, or moving to a facility that would require a substantially longer commute.
It might even include a drastic cut in pay, though it's unclear whether tipped workers will be able to argue their pay has been cut if they continue to receive the same base pay, but earn far less in tips due to decreased business.
Small changes to an employee's job, like shifting work hours just a bit, or moving offices around, won't count toward unsuitable work conditions.
KEEP ABREAST OF CHANGES
The entire country is in uncharted territory. It's possible more guidance will roll out as more businesses reopen and more workers are called back. Employers therefore need to stay nimble and stay up-to-date on new guidelines and regulations.
For your convenience, we've assembled two comprehensive COVID-19 Download Resource Centers designed to help employers deal with this pandemic and the challenges facing all of us as we reopen for business.