Reopening: The Impact of Rehiring on Unemployment Benefits

Resources
Written By Elizabeth D Tilton

This is an incredibly challenging time for both employees and employers as everyone navigates re-employment and rehiring, respectively. Below we share recommendations for both parties, including how to navigate unemployment insurance and Pandemic Unemployment Assistance, potential implications on Payroll Protection Program loans, and more.

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Overview ⟶

Recommendations for Employees ⟶

Recommendations for Employers ⟶

 
Article: Reopening: The Impact of Rehiring on Unemployment Benefits

Overview

 
 

In light of the current COVID-19 crisis, there are two forms of unemployment insurance, the first of which is the traditional unemployment insurance that existed prior to COVID-19, and the second of which is new under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act): Pandemic Unemployment Assistance (PUA), which qualifies individuals that otherwise would not qualify for traditional unemployment insurance.

 

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Key Resource For Employees
To understand your right as an employee while protecting your safety, this US Department of Labor FAQ answers questions about additional unemployment benefits offered under the CARES Act.

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Key Resource For Employers
To navigate common questions regarding the PPP and rehiring can be found in this list of PPP FAQs released by the Small Business Association (SBA) and the Department of the Treasury.

 

Recommendations for Employees

 
 

Pandemic Unemployment Assistance

Individuals should be aware that those who reject offers of re-employment may forfeit eligibility for continued  traditional unemployment compensation, but there are other options through the CARES Act and Pandemic Unemployment Assistance (PUA) [Source: Treasury.gov Question 40]. This US Department of Labor FAQ  answers questions about  unemployment benefits under the CARES Act,  and here is a list of resources by state.

Individuals should check to see if they are eligible for PUA through the CARES Act. PUA is for individuals who do not qualify for regular unemployment benefits (including self-employed workers, independent contractors and those with a limited work history) and cannot work because they:

  • Are diagnosed with COVID-19 or have COVID-19 symptoms and are seeking diagnosis

  • Have a member of their household who is diagnosed with COVID-19

  • Are providing care for a family or household member diagnosed with COVID-19

  • Are the primary caregiver for a child whose school or care facility closed due to COVID-19

  • Are unable to reach their place of employment due to an imposed quarantine, or because they were advised by medical provider to self-quarantine, due to COVID-19

  • Were scheduled to start new employment and cannot reach the workplace as a direct result of COVID-19

  • Became the major breadwinner because the head of household died from COVID-19

  • Quit their job as a direct result of COVID-19

  • Had their place of employment closed as a direct result of COVID-19

  • Meet any additional criteria specified by the U.S. Secretary of Labor [Source: JDSpura] 

The PUA program provides up to 39 weeks of benefits, which are available retroactively starting with weeks of unemployment beginning on or after January 27, 2020, and ending on or before December 31, 2020. The amount of benefits paid out will vary by state and are calculated based on the weekly benefit amounts (WBA) provided under a state’s unemployment insurance laws. Under the CARES Act, the WBA may be supplemented by the additional unemployment assistance provided under the Act.

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Additional Recommendations for Employees

  • Ask direct questions and be very clear in your conversations with employers so there are no surprises regarding unemployment claims. 

  • Note that states have different policies when it comes to who qualifies for continued unemployment benefits and it is worth researching what your state has determined. 

    • For example, the Texas Workforce Commission has released criteria that will extend unemployment benefits or partial unemployment benefits when individuals have a household member at high risk, a family member with COVID, a COVID diagnosis, they are quarantined due to exposure, or they do not have child care options available. 

 

Recommendations for Employers

 
 

Employees Who Decline to Return

For employer questions regarding unemployment insurance, the most important reference is this list of PPP FAQs released by the SBA and the Department of the Treasury. 

In conversations with employees, transparency is extremely critical, and having rehiring and unemployment conversations on the phone or a video call rather than a text or email is more sensitive to the needs of individuals during this crisis. Make sure to properly document all conversations regarding rehiring, recapping your conversation for reporting purposes. 

Empowered Hospitality makes the following recommendations regarding employees who decline to return:

  • While business needs ultimately drive our decision-making, offering clear and open communication to employees will help them make informed, long-term decisions.

  • Ask past employees to express their interest in returning to take stock of their sentiments, and obtain their response in writing.

  • When extending an offer, let employees know that declining now may prevent them from rejoining in the future, and expanded unemployment benefits currently end as of July 31st.

  • Inform the individual if you plan to deny their unemployment claim.

  • Keep in mind that some accommodations may be required if the individual is at heightened risk or under quarantine.  For certain employees, leave may be available under the FFCRA, NY Emergency Paid Sick Leave, or other similar or recent enactments.  

  • Consider whether the employee can perform some of all of their work remotely.

  • Offer to discuss the employee’s decision voice-to-voice. By humanizing the conversation, you may be able to work through fear, anger or other negative emotions in a way that is not possible over email or text.

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[Update] The PPPL Forgiveness & Additional Recommendations for Employers

Below are additional recommendations, including how this may affect PPP loan forgiveness:

  • Understand that policies for unemployment vary by state and are changing in response to reopening after COVID restrictions are lifted, so researching your state’s policy updates (if any) is necessary. 

  • To ensure PPP loan forgiveness, employers must properly document each employee’s refusal to return to work to qualify for the exemption. Specifically, employers must be able to provide proof of:

    • A good faith, written offer of rehire

    • The employee’s rejection of that offer

  • Employers with questions about how their return to work plans will impact their PPP loan forgiveness should reach out to legal counsel. 

To retain as much as talent as possible, it may be worth considering alternative options, for example, a workshare program that allows employers to maintain staff at a reduced schedule and/or wages and allows employees to claim partial unemployment.

Fox Rothschild and NYC Hospitality Alliance released a guide to provide restaurants with reopening tips for rehiring or recalling employees. Although it focuses on New York City, many items on this step-by-step, action-oriented list can help operators navigate rehiring across the US, regardless of location. Below are the first two pages of the four-page document. You can view the full PDF [Here].

 
 
 
 
 
 

Additional Sources

 
 
 
 

Disclaimer: The consolidated resources are here for your consideration. The information provided above is not legal advice. We recommend talking to your lawyer to ensure all state + federal compliance is maintained. If you do not have legal representation, we would be happy to connect you with legal counsel. We understand that circumstances are changing quickly and we are updating content as it is available.

 
Elizabeth D Tilton https://www.oystersunday.com/
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