These are most certainly very strange and difficult times. The novel coronavirus (COVID-19) has forced many businesses to make very tough decisions recently. Some have had to shutter their doors as the virus continues to spread across the State while others have had to consider staffing needs. Though New Yorkers are resilient, businesses cannot survive long without being operational. The thought of laying-off talented workers may be on employers’ minds right now, but it is certainly the last decision they want to make. The process of letting go and rehiring employees is an arduous task and can cost a business in lost time and extra dollars by having to hire and train new employees. However, there’s a solution many may not know about- New York State has a program that can help you keep your employees working.
The Solution: The New York State Shared Work Plan (hereinafter the “Plan”) was designed to help eligible employers manage their staffing when changes occur in business cycles or to account for seasonal adjustments. Rather than laying off talented workers, the Plan allows an employer to keep their trained employees by paying them for reduced hours rather than laying them off completely. Employees can then be eligible to receive partial benefits from Unemployment Insurance for the difference in pay.
Who’s Eligible? To qualify for the Plan, there are several requirements including that an employer’s business must have at least two full-time employees and must have made unemployment insurance contributions for four consecutive quarters. The Plan applies to employees who normally work no more than 40 hours per week. The reduced work hours and wages must be between 20% and 60% of the regular work hours and corresponding wages. The work for employees under the employer’s shared work plan is shared amongst the employees where each employee can participate in the program for up to 26 weeks. Further, the Plan must cover all employees in the affected area (i.e. the total workforce, a particular shift(s), or a work unit(s)) and their hours should all be reduced by the same percentage.
How to Apply: Applications for the shared work program can be completed online at the NYS Department of Labor website. It is a fairly straight-forward process, and if no additional information is required, the application can be reviewed and approved in a few days.
The shared work program can be a solution for those businesses in fear of closing their doors forever during these times of uncertainty. Choosing to lay off workers may create new unforeseen obstacles for employers such as a decline in productivity, a sporadic need for temporary workers, and/or a need for overtime. Overall, these actions can reduce morale within a business thereby reducing the productivity of a business. The New York State Shared Work Plan may be the silver lining many of us are so desperately in need of.
For more information and to see if this is an option for your organization/business, please visit the NYS Department of Labor’s website.
Left with No Choice: Unemployment
COVID-19 is making its mark on New York State, the United States, and the world. On March 7, 2020, Governor Cuomo declared a state of emergency and has issued several executive orders regarding “Continuing Temporary Suspension and Modification of Laws Relating to the Disaster Emergency.” The most recent order, No. 202.8, increased the work-from-home requirement to 100% of a non-essential business’s workforce. This order began March 22, 2020 and is set to expire on April 19, 2020 (though it is possible this can be extended given the number of COVID-19 cases). So, what does all this mean? To sum it up, unless you are considered an essential business and your employees are also considered essential, you should not be going to your place of employment. Not complying with this order can result in a $2,000 fine per violation ($5,000 for repeat offenders).
Although some businesses are able to function remotely, not all businesses have been so lucky which means some tough questions are coming into play. Do I have to close my doors permanently? Do I have to lay off some of my employees? If you have considered all options (see info above regarding New York State Shared Work Plan: A Strategy to Reduce Lay Offs) and you have come to the decision that layoffs are necessary, you now need to consider the way in which you go about layoffs.
First, make sure you are complying with your own internal employee handbook or employee contracts. Check to see if there is language about providing a severance package, or how unpaid paid-time-off (PTO), vacation, and/or sick time is to be paid out. The Employer must provide a Record of Employment Form to their employees, which gives instructions on how to file for unemployment, and must provide final pay requirements. Starting with the latest on the NY law effective April 2nd, New York law requires that, in the event of federal action on the coronavirus, employers must apply the plan most generous to employees. In most cases, NYS’s new emergency paid sick leave will be more generous for employees who are subject to quarantine or isolation or have a minor child quarantined (meaning that if this is the case, employers should provide benefits provided by that law).
Next, keep your employees informed; provide employees with resources and information regarding unemployment and how to apply for it. Let your employees know that the seven-day waiting period for applying for unemployment insurance benefits for those who are out of work due to COVID-19 was waived by the New York State Department of Labor. Lastly, stay informed. There is new information being put out each day that can be pertinent to the continuity of your operations.
Remember, times are tough all around, so how you lay off your employees is important. Since your employees are or were assets to your company, it is important that they feel treated that way even when times are tough. Consider the recent news about Dig Inn, the food chain that has been serving mostly millennial office workers in New York, Boston, and Philadelphia since 2011. Right as the business closures were occurring, Dig Inn laid off approximately 40% of their 100-person corporate workforce – initially via a text message and in this same week, Dig Inn donated 4,000 meals in the same week to food banks and homeless shelter. Although the company did follow-up with a phone call about 15 minutes after they sent the layoff text message and though they had good intentions with regards to donating food, the damage to their image was already done. Your employees are usually your biggest advocates and if not treated properly, they may not support your business which can be problematic in such a delicate economy especially with social media platforms being so prevalent. We all are hoping for this pandemic to wrap up as quickly as possible so that we can get back to some normalcy. But in the meantime, it is best to be fair so that when we come back, we come back stronger.
Shari Diamond, CIA