“Why go back to work? I’m earning more on unemployment!”
We all adjusted our business models at warp speed when states implemented stay-at-home orders. As tens of millions of workers ended up on temporary furlough or permanent layoff, the United States government needed to respond to the immediate and dire economic impact. Surprisingly, Republicans and Democrats came together quickly to pass trillions of dollars in relief - something that would have seemed unfathomable just a few months ago.
The CARES Act passed in late March, but it took nearly a month for the provisions to take effect. Aside from the 2020 income tax credit advances sent to Americans in early April, the Pandemic Unemployment Assistance program has had the most direct impact on individuals. This program greatly expanded unemployment insurance (UI) eligibility and provides an extra $600 per week (known as PUC) to the maximum amount an individual is entitled to through their state’s U agency. This temporary benefit - available until July 31st - provides significant relief to those most in need.
As with any positive action, there are unintended consequences. The $600 PUC can more than double the maximum unemployment benefit in some states; in certain instances, a furloughed worker can find themselves earning MORE while receiving unemployment benefits than when he/she was working full-time hours. As they prepare to reopen into a world of uncertainty, many employers are asking themselves, “How do I get my people to come back to work?”
If you are facing this dilemma, don’t panic. There are several points to consider to ensure a win-win for both your business and your employees. It will take time for customers to return en masse until there is a comfort level with personal safety, so it is highly unlikely you will be in a position to bring back your employees to full-time schedules any time in the near future.
Many states provide work-share programs to encourage companies to retain as many employees as possible; in these instances, employees can still be eligible for the $600 PUC supplement in addition to their hours worked and some UI compensation.
Employers can consider implementing a “week-on/week-off” schedule. While working full-time hours one week, an employee would be eligible to collect full UI benefits, including the PUC supplement, for the second week.
It is important to note, if an employee refuses available work at a business that has been authorized to reopen, they can be considered in violation of the state's eligibility requirements to receive UI. While you do not want to take a punitive approach with your employees during a pandemic, you want to be sure your people are aware of all facts so they can make informed decisions.
The PUC supplement is only authorized through July 31st; it is short-term compensation. Employees will want to consider their personal ethics in making a decision to stay at home when there are hours available for them to work; there could be a negative impact on the perceptions of colleagues.
This issue is of particular concern to the food and beverage industry. Many restaurants have been adjusting their one-tap tipping options on the POS or online ordering systems up to a maximum of 25% or even 30%. As consumers know the hospitality industry is struggling, the "impulse buy" effect can kick in. What's an extra 5% on top of my bill for a gesture of thanks to the person taking care of me?
Regardless of concerns about the tension between staffing needs and unemployment benefits, the most important thing for any business owner/manager to do is communicate transparently with his/her people. The greater someone’s understanding of the business realities and the sense of shared sacrifice, the greater that person’s willingness to be a team player.
