State Provides Guidance to Employers Contemplating Layoffs
The Michigan Department of Labor and Economic Opportunity has offered guidance to Michigan employers on how to avoid potential layoffs related to COVID-19.
“We know that many families and businesses are and will experience economic pain as a result of the COVID-19 pandemic,” department Director Jeff Donofrio said in a new release. “Through Gov. (Gretchen) Whitmer’s executive action and existing state programs, there are resources for employers affected by COVID-19. We are also strongly urging job providers facing work shortages to place their employees on temporary leave as opposed to termination, so that they may remain eligible for potential federal assistance.”
Among the guidelines:
If employers are financially distressed but hope to continue operations by cutting back hours, they are encouraged to use the Unemployment Insurance Agency’s Work Share program. More information about the program can be found at michigan.gov/workshare.
Temporary Leave vs. Termination
Employers are strongly urged to place employees on temporary leave and advise workers that they expect to have work available within 120 days as opposed to termination.
Steps for employers placing employers on temporary unpaid leave:
· Do not terminate the employee – specify a temporary/indefinite leave with return to work expected that is within 120 days.
· Do not create a contractual obligation to bring the employee back to work – let the employee know that the situation is fluid and subject to change.
· Provide the employee with a formal unemployment compensation notice. Employers will need to provide their employer account number and federal identification number.
· Communicate to employees about their rights. Under Whitmer’s recent executive order, workers placed on leave; or who are unable to work because they are sick, quarantined or immunocompromised; or who have an unanticipated family care responsibility are eligible for unemployment insurance benefits.
Ensure employers are provided information on how to obtain unemployment insurance benefits. A fact sheet can be found here.
· Get each employee’s up-to-date contact information.
Let employees know if you will be putting updated information on the entity’s website or intranet, if applicable.
· Appoint a single, or limited number of individuals who will field questions, and communicate that information to employees.
· Keep a tally of all questions and answers, and periodically share with employees.
Elimination of Certain Unemployment Costs to Employers
Under the governor’s order, an employer or employing unit must not be charged for unemployment benefits if employees become unemployed because of an executive order requiring them to close or limit operations.
The Michigan Economic Development Corp.’s call center stands ready to support businesses looking for assistance through other available state programs. For more information, visit the MEDC’s website at michiganbusiness.org or call (888) 522-0103.
The Michigan Small Business Development Center can also provide resources for small businesses impacted by COVID-19. Visit its website at sbdcmichigan.org/small-business-covid19/ for additional information.
Whitmer is also seeking additional solutions for small businesses impacted by COVID-19. Earlier this month, Congress passed legislation that makes $1 billion available to the U.S. Small Business Administration to provide low-interest loans to small businesses, small agricultural cooperatives and nonprofits that have suffered substantial economic losses as a result of the COVID-19 pandemic.
Small businesses that could benefit from federal loans should start collecting the information needed to complete and submit an application.