Below is a summary of the webinar held Monday, March 16th to discuss planning for COVID-19 and some steps to plan for the required “Shelter in Place” order issued on that day, and the questions we answered from participants.
Shelter in Place Order
All Bay Area counties have ordered a shelter in place, directing everyone to stay inside their homes and away from others as much as possible until at least April 7th. Below are the orders for Alameda and San Francisco Counties, but this also covers Contra Costa, Santa Clara, San Mateo and Marin Counties.
Alameda County Order: http://www.acgov.org/documents/Final-Order-to-Shelter-In-Place.pdf
San Francisco County Order: https://www.sfdph.org/dph/alerts/files/HealthOrderC19-07-%20Shelter-in-Place.pdf
Per the orders, all employees from non-essential businesses should not report to work other than to maintain Minimum Basic Operation.
As you make decisions on next steps here are some options and some things to keep in mind:
Furlough is an unpaid leave of absence. This would allow your employees to maintain their benefits and have an expectation to return to work but would give the employees some security that you intend to bring them back on as soon as possible. And it also allows the employee to apply for unemployment insurance benefits.
The furlough could come as a total leave for the employee or it could be a reduction of days or hours. A furlough could also be a reduction in pay. For non-exempt (hourly) employees this could be announced and put into practice with short notice. However, be careful when applying this to exempt (salaried) employees.
Exempt (salaried) employees need to be paid by the week worked under FSLA. So even if they only work a portion of the week, the employee would need to be paid for the entire week.
For example: you put all employees on furlough effective Tuesday March 17th after they worked on Monday March 16th. Employee A is paid by the hour, and you would not be required to pay for any additional time for the rest of the week. Employee B is paid a salary, so you would need to pay Employee B for the remainder of the week, even if they did not work.
If you are reducing compensation as a form of furlough, you also need to be aware that an exempt (salaried) employee cannot be paid less than $950 per week (the equivalent to $50,000 per year or two times minimum wage). Be careful if you reduce the compensation for employees that you do not go below this threshold.
Unemployment Benefits while on Furlough. Employees’ whose hours, and therefore compensation, are reduced due to a furlough are eligible to apply for unemployment insurance (UI) benefits. Currently, California EDD is waiving the seven-day waiting period for UI applicants. All exempt (hourly) and non-exempt (salaried) employees who are effected by a furlough can apply for UI benefits. However, if an exempt (salaried) employee is receiving a reduced compensation, and is not completely off of work, the employee would be making more than the maximum benefit offered by the EDD for UI claims.
As previously stated the minimum amount you can pay an exempt employee on a reduced compensation is $950 per week, and the maximum benefit an employee can claim for UI benefits is $450, therefore the EDD may find the employee ineligible for benefits.
Health Benefits while on Furlough. In general, when an employee is not working at least 30 hours or more per week the employee would lose any health and welfare benefits offered by the company at the end of the month. During a furlough, if you are currently offering employees health and welfare benefits, you may choose to extend their benefits. In the current situation, we would recommend that you extend benefits until at least April 30th, with a review in April.
While an employee is on furlough, they may be unable to pay the employee contribution towards the benefits. It is up to the company to decide if you will bill the employee for these costs, have the employee pay the costs retroactively once they return to work, or waive the employee’s cost. This would be dependent on what the company is able to do. Whatever you decide should be outlined in the furlough letter, so the employee knows what to expect.
If you choose to or have put your employees on furlough, we have a letter that can be provided to the employee that explains what is happening. Feel free to reach out to us for a copy: email@example.com.
If you can, you may allow your employees to work remotely during this period of “Shelter in Place”. If you are able to do this, great! And here are some things to keep in mind:
Set Expectations. Put a policy in place to set expectations for working remotely. What hours are the employees expected to be working? What meetings or check-ins are required? What type of production is expected from the employee?
Even though the employee is remote, they need to understand you expect them to work and be productive. But you also need to be compassionate to what may be going on for the employee. With schools closed and everyone sequestered to their homes, your employees may need to manage distractions at home that they would not have needed to worry about at home. Work with your employees to set a schedule that works for everyone.
Free or Inexpensive Resources. There are a number of free or inexpensive resources available to employers to assist with remote work. Here are a few of our favorites:
Zoom– offers free online meetings for up to 30 minutes at a time. This is a great resource to check in with employees, share screens and share ideas.
TeamViewer – offers a free version to users to be able to log in to a computer from a remote location
1Password – is a great solution to share passwords or important information
Calendly – can be used to schedule meetings and see availability
For a full list of software that is good to use for remote work, check out this blog from Freedom-Makers Virtual Assistants: https://go.eoshr.com/FreedomMakers
If you need assistance drafting a remote work policy email us at firstname.lastname@example.org and we would be happy to help.
If an employee believes they may have been exposed to COVID-19, or needs to care for someone who may have been exposed, you will need to address this for both the employee effected and all other employees.
For the Employee Effected: The employee should know that they may be eligible for Disability Insurance or Paid Family Leave. Like Unemployment Insurance benefits, the waiting period has been eliminated at this time. Employees can visit https://www.edd.ca.gov/disability/ for more information.
For all other Employees: It is the employers responsibility to inform employees that they may have been exposed to the virus, and that they should take appropriate precautions. DO NOT RELEASE THE NAME OF THE PERSON WHO WAS EXPOSED as this would be a breach of confidentiality under HIPAA. All other employees only need to know that they were exposed.
If you need a sample notice to send to employees or assistance with communicating this to your employees, email us at email@example.com for sample language.
Stay Calm and Carry On
During this uncertain time, it is important to remain in communication with your staff to let them know of any updates or changes to schedules or employment status. This is a very stressful time for everyone, maintain compassion for your employees who are anxious about the effect this virus is having on so many aspects of our lives.
Questions & Answers
Below are some additional questions and answers we covered during the webinar:
Do employees pay income tax on unemployment? Yes, UI benefits are taxable income.
Does the Furlough letter have to go out right away? Or can it go out to employees as we start running low on work? Furlough letters can go out when you actually put someone on furlough, but all changes should receive communication on how you are addressing the “Shelter in Place” order.
Did you say that some employees ARE allowed to come to work if they are essential to OUR business? Or just if they are essential to society? Essential employees are defined in the order from each county. In general these are Healthcare, Grocery Stores, Media, Gas Stations, Banks, Hardware Stores, Mail, Restaurants (for take-out only), shipping, etc. But it also covers employees that need to report to work to ensure that other employees can work remotely.
So what if we just furlough a specific department, I’m assuming that is okay? Yes, it is okay to just furlough a specific department or shift, as long as you are not making a decision that could be considered discriminatory.
So can you furlough exempt employee (ie. no pay for next few weeks -after this week) or only option is reduce pay to $950/wk? You can furlough an exempt employee for full week periods.
If they use their vacation pay, can we alter their hourly rate (lower it?) Vacation must be paid at the current hourly rate of pay for the employee. However, you can choose to not allow employees to use vacation time during the furlough as the employee would be eligible for unemployment benefits.
What can I do if person working at home doesn’t perform? It is important to set expectations for remote work. Any worker who is not meeting expectations remotely, just as if they were working in the office, should be counseled and disciplinary action taken if appropriate.
What if an employee does not have the internet? We would recommend providing the employee with a hotspot from a company like Verizon or AT&T. The employee could also possibly use their phone as a hotspot.
For hourly employees, can we allow them to exhaust their sick & vacation time, and THEN put them on furlough after that? Even if different employees have different amounts of sick & vacation time? Yes, you can allow employees to exhaust sick and vacation time.
Before this came up, one of my employees asked me for hours reduction from 40/wk to 20 or 25/wk. If I grant her that now, will it be considered a “furlough” and she would request UI or how protect from that? If an employee has requested reduced hours and requests UI then that would be fraud and once EDD contacted the business they would find out.
Does our staff need to use their PTO or can they not use it and file an unemployment claim? You can choose to require or not require employees to use PTO. If they have and use PTO, the employee would need to wait before submitting a claim for UI benefits.
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