This is an exceptionally difficult time for many local businesses and our clients. The rapidly changing landscape makes it difficult to plan precisely. This general guidance can be used as a framework for addressing several employment related questions as of March 25, 2020. We expect both the advice and situation to change so please check back for updates or contact one of our attorneys for more specific guidance.
On March 23, 2020, Governor Jay Inslee issued an order to “Shelter in Place”. Non-essential businesses should close. There are numerous businesses or groups within businesses that may be deemed essential and the larger list should be consulted. However, as part of our civic duty to try to “flatten the curve” we advise our clients to close all physical locations and offices where they are able. (UPDATE – See current guidance via Healthy Washington – Roadmap to Recovery) Working from home may be possible in many circumstances. However, with many families also caring for children who are out of school or daycare, expectations should be adjusted to account for this as well.
With the length of this current crisis uncertain most businesses have a very real concern about how to keep and pay for employees. The reality is that many businesses simply cannot pay employees for not working and most employees do not have enough personal time off to weather this crisis. What follows are several scenarios and options for businesses to consider.
Immediate Leave Options:
Prior to long term planning it is important for both employers and employees to be aware of immediately available benefits. Washington’s Employment Security Department has many helpful resources. https://www.esd.wa.gov/. This excellent chart provides a summary of various public and private options available. We recommend sharing it with employees (a copy is provided). After the immediate concerns addressed above long-term solutions to reduced work should also be considered.
Working From Home:
If employees can work from home productively at the same or similar level as they were able to in the physical office, great! Employers should look at ways of improving such productivity through better internet enabled tools, meetings, methods, etc. If employees are accessing confidential information remotely, employers should take steps to protect that information, and, if appropriate, when the crisis is over ensure such information is no longer accessible remotely.
Reduced Hours, “Shared Work”:
Many employers are likely encountering a slowdown in both the quantity of work and ability of their employees to devote a full day to such work. Rather than laying off employees either temporarily (see below), or permanently a short-term reduction in hours may have benefits. Specifically, Washington State has a “Shared Work” program. This program helps fill the gap of pay that an employee lost due to a reduction in hours. This program runs through Washington Employment Security Department similar to regular unemployment benefits. https://esd.wa.gov/SharedWork. There are several requirements to take advantage of the program, but a few important considerations are as follows:
- An employer must have at least two hourly paid employees on the program.
- The hours reduced can be as little as 10%, but not more than 50%.
- Regular benefits (health, vacation, sick leave, retirement etc.) that the employee was receiving must be maintained.
- This program can currently last for up to a year.
- There are general reporting requirements throughout, including reporting any changes in hours after the initial application.
We recommend that employers carefully articulate the criteria they use to determine who has hours reduced. Whether it is seniority, productivity, or other business needs, any plan should be done equitably and transparently. If you need assistance in making an initial application or have questions, please contact us and we can help.
Temporary Layoffs, Standby, or Furloughed Employees:
Washington also allows for a temporary layoff or furlough that is different than a traditional termination. Normally used for short downturns for a period of up to eight (8) weeks, now an employer can put an employee into “standby” for up to twelve (12) weeks due to COVID-19.The much discussed Federal Aid/Stimulus package is also expected to provide some benefits to furloughed workers, but details are emerging. Rather than a permanent separation from employment, putting an employee into standby status has the following differences and points to consider:
- Employee does not have to apply for other jobs during standby.
- Employee must accept being reactivated if able.
- Employee does not receive benefits (as they would if on Shared Work). I expect this provision to change through emergency orders or aid packages (Federal or State).
Again, we recommend employers carefully articulate the criteria they use to determine who is put onto standby. Whether it is seniority, productivity, or other business needs, any plan should be done equitably and transparently.
Unless it is certain that the termination is permanent the above methods are likely preferable. However, as this crisis extends it may become necessary to convert the employee who is in Shared Work, or on standby to fully separated. This would allow for a greater time period they may access public benefits.
How we can help?
Much of the
paperwork to activate the above programs are simple. However, this is a new
situation for all of us, and these programs may be new to many of us. We are
happy to help in any way we can, including discussing best practices in how to
handle the required temporary shutdown, conversion of employees to part time,
or how to furlough certain employees. Please contact your attorney at Reed
Longyear to request more information.