Many home service businesses are faced with less work for their employees and might be considering layoffs. If you’ve reached that point, here are some things to consider.
1. Most States Aren’t Requiring a Complete Layoff to Qualify for Unemployment Benefits
The U.S. Department of Labor has given states the opportunity to extend unemployment insurance benefits for individuals impacted by the epidemic.
Per this new mandate, an employee can receive benefits if:
An employer temporarily ceases operations during the outbreak
If an individual is quarantined through illness or risk of exposure
If an individual is taking care of a sick family member
It is up to the state on how they are responding to these new guidelines. However, we’re finding that most states are providing partial benefits to individuals whose work hours have been reduced due to COVID-19. The employee does not need to quit their job to receive benefits.
In addition, many states are also covering employees that have lost their full-time job and are replacing it with one or more part-time jobs, as well as individuals who were not full-time to begin with.
The best source of information is your state-sponsored employment website, which you can find through careeronestop.org.
As an employer, you can create an unemployment insurance claim on behalf of your employees which can speed up the approval process. In fact, certain states, such as Georgia, are requiring employers to file claims if they are reducing hours for their team.
2. Consider a Short-Term Temporary Layoff
A temporary layoff is the promise to rehire when the situation is over. If you’re forced to cut employees’ hours down to zero, this can be a good solution. It can give your employees’ ease-of-mind that they’ll have a job to return to.
Employers may also be able to file a temporary layoff claim with the state which can ease other requirements for employees to qualify for unemployment benefits.
3. Paid Sick Leave Offers New Tax Benefits
According to the US Department of Labor, unemployment benefits are only applicable if an individual is not receiving paid sick leave. However, per the new H.R. 6201: Families First Coronavirus Response Act which was signed into law on March 18th, employers can receive 100% of the wages back in tax credits.
The law mandates that businesses with under 500 employees must offer two weeks of paid sick leave; however, businesses with under 50 employees can file for an exemption if it would provide hardship for the business.
Per the law, employees would receive sick leave with full pay (capped at $511 per day) for up to 80 hours if they are unable to work due to medical quarantine.
If an employee is staying home to care for someone with COVID-19 or is unable to find childcare due to the outbreak, they would receive sick pay for up to two-thirds of their salary (capped at $200 per day).
Part-time employees can receive a portion of their paycheck based on their normal hours, as well.
4. Plan for the Future
As you’re considering your options, keep in mind the company you want to have when we get through this. Even if you need to reduce hours or lay someone off, keep in touch with them and provide updates about where your business is at.
Maintaining transparency throughout this time will help you rebuild once the crisis has passed.
Learn more about funding opportunities for businesses impacted by COVID-19.
Read about how other home service businesses are weathering through the crisis or altering their business due to essential service mandates.