Difficult Business Decisions During Covid-19

Considering a Shutdown or a Reduction in Force (RIF)

Our friends at BBSI who provide excellent HR services and support for many small businesses across the country would like to get the word out about the impact Coronavirus (COVID-19) and what to do for small businesses.

Before A layoff

Economic Injury Disaster Loan Program. The Small Business Administration is working with state governors to provide low-interest disaster recovery loans to small businesses and nonprofits that have been severely impacted by COVID-19. These Economic Injury Disaster Loans offer up to $2 million in assistance for small business to help overcome the temporary loss of revenue they are experiencing. These loans may be used to pay fixed debts, payroll, accounts payable, and other bills that cannot be paid because of the disaster’s impact. The interest rate is 3.75% for small businesses without credit available elsewhere; businesses with credit available elsewhere are not eligible. Get the latest information by visiting the SBA’s Guidance for Business and Employers to Respond to Coronavirus, by contacting the SBA’s national disaster relief helpline by calling 1-800-659-2955 or emailing disastercustomerservice@sba.gov, or by contacting your local SBA office.

What is Job Sharing?

  • https://esd.wa.gov/SharedWork
  • Enables at least two employees share the same duties of a job in lieu of a lay off or job elimination
  • A program can last up to one (1) year
  • The employee is able to take advantage of unemployment benefits during the job share period
  • Employees do not need to look for other jobs during this time

What does business have to do?

Temporary Closure

  • When a business makes a business decision to close or reduce business hours for a temporary period of time, impacted employees may be eligible for unemployment.
  • Unemployment benefits may be eligible to employees if his or her regular works…
  • 40 hours and was reduced to 25 hours, and might be eligible for some benefits due to the loss of 15 hours
  • 40 hours and the employer has closed business for the next 14
  • days. The employee might be eligible for benefits for the full 40 hours/week
  • Employees can apply for unemployment via the ESD’s site:
  • https://esd.wa.gov/unemployment
  • If you need guidance in implementing a shutdown connect with BBSI.

Reductions in Force (RIF)

  • If you are continuing business but at a reduced capacity, you will have to apply a selection methodology that does not create additional complexities for the company (e.g., perceptions of targeting a protected class)
  • I recommend you review how you select each employee and it is based on performance or some sort of business case
    • Ex: A particular work group has been deemed non-essential and reduce the entire group
    • Ex: Some members within a group will need to be eliminated and selection was based on performance
  • If you are having difficulty of want to discuss further, please call BBSI.
  • Develop a plan to determine communication plan, dates, and others.
  • Severance and Separation Agreements (if applicable)
  • Unemployment benefits
  • Possible recall (if applicable)

 

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