Employers: What Should You Do Right Now If You Can’t Pay Employees?
We’re likely in the beginning of an extended period where many businesses are either unoperational or running on a skeleton crew of staff. In a COVID-19 environment, there are special circumstances permitting employers and laid-off employees easier access to unemployment services.
If you had to furlough employees or you can’t pay them a regular salary, this is what you can do right now to expedite the unemployment process.
Why file for unemployment on behalf of your employees?
For one, it’s much quicker. When you get the unemployment process started, the employees’ claims are often reviewed faster. They get unemployment benefits sooner. For you, it’s a time-saver, too. Instead of reviewing employee claims individually, you will review a single spreadsheet with everyone’s names, and check a box if the information is accurate. Yes, you will need to input the data using the spreadsheet template above. But after that, the process is expedited, consolidated, and easier for everyone involved. Plus, it’s one way to maintain employee goodwill during an incredibly difficult time. It also decreases the opportunity for unemployment fraud.
What else should employers KNOW?
It is important to communicate to employees that you are filing a mass layoff claim so they don’t unknowingly duplicate efforts. Then, make sure they know that just because you’re getting the process started, they will still need to follow through to receive benefits. That means they will need to file weekly claims for every week they’re unemployed or underemployed.
The normal waiting period to receive unemployment benefits has been waived during the COVID-19 response. You can file the form as soon as you know the first date of unemployment – or employees can if they’re filing themselves. Also, the normal eligibility period of 16 weeks of unemployment has been extended to 26 weeks.
What else should employers DO?
Besides filing the mass layoffs for your employees, you’ll also need to notify the health insurance provider about the effective date of the layoffs, and when you expect to return to normal operations. Employees can only qualify for certain benefits if you temporarily suspend them first.
For the future…
In the future, employers that don’t already have a paperless, automatic payroll system in place should strongly consider implementing one as soon as possible. Paperless payroll allows employers to pay employees faster, easier, and without the added hassle of payroll tax compliance or the need to be physically on-site to process or distribute checks.
What we’ve seen in the past couple of weeks is that some employers, especially cash-heavy businesses, have been scrambling to pay employees at the beginning of a mandated shutdown. A paperless payroll system eliminates a lot of unnecessary stress.
We’re here for you
Unprecedented challenges facing small businesses, restaurants, retail, and hospitality operations right now. Adams Brown can help employers navigate uncertain and sometimes unpleasant responses to the public health crisis and help set up automated processes going forward. Contact us anytime for questions and guidance.