March 26, 2020
By Anne E. Baggott
On March 24, 2020, the U.S. Senate passed a $2 trillion stimulus package in response to the widespread economic impacts from COVID-19. If passed by the House of Representatives, which is expected within days, employers facing difficult employment decisions may get help through an expansion of their state’s unemployment benefits.
Downturns in business and productivity due to stay-at-home, shelter-in-place and other social distancing measures have forced employers to consider ways to reduce payroll expenses. Some options include furloughs, pay reductions, reduced hours, and temporary or permanent layoffs. When employers make the difficult decision to furlough or lay off employees, and the employee qualifies for unemployment benefits, the federal stimulus package significantly helps those employees. Through December 31, 2020, employees will be eligible for the following expanded benefits:
- For each week the employee qualifies for unemployment, an additional $600 per week payment, for up to four months.
- Where a state has not waived a one-week waiting period, the package provides funding to the state to pay for the employee’s first week of unemployment benefits.
- After the employee’s regular unemployment benefit expires, an additional 13 weeks of unemployment benefits, if the unemployment continues due to a reason related to the novel coronavirus.
The stimulus package also significantly incentivizes employers to use their state’s Shared Work Programs under a short-time compensation agreement with the U.S. Department of Labor – instead of laying off employees. These programs allow qualified employees to receive unemployment benefits, if their hours are reduced between 20% and 40%, but they remain employed and eligible for all other benefits. (If the employee’s hours are reduced further, they could be eligible for standard unemployment benefits.) The reduced hours must apply to at least 10% of the employees in the affected unit who meet the monetary requirements for regular unemployment compensation. The stimulus package provides payments to the states for up to 100% of the benefits paid to employees under these Shared Work Programs. It also provides additional funding for states to create these short-time compensation agreements with DOL.
Kansas and Missouri both offer Shared Work Programs for employers. More information in Kansas is at https://www.dol.ks.gov/employers/shared-work-program. Missouri-based employers should go to https://labor.mo.gov/shared-work for more information.
Contact Anne E. Baggott at 816-714-3022 or abaggott@dysarttaylor.com for assistance with coronavirus-related employment issues.