MICHIGAN GUIDANCE TO EMPLOYERS CONTEMPLATING POTENTIAL LAYOFFS

The Michigan Department of Labor and Economic Opportunity (LEO) has provided guidance to Michigan  employers on how to avoid potential layoffs related to COVID-19. The State is strongly urging job providers facing work shortages to place their employees on temporary leave as opposed to  termination, so that they may remain eligible for potential federal assistance. Below are two tools the state has provided employers to aid in the difficult decisions needed to address workforce reductions.

Work Share

If employers are financially distressed but hope to continue operations by cutting back hours, they are encouraged to use the Unemployment Insurance Agency’s (UIA) Work Share Program that allows  employers to maintain employment levels and business operations during declines in regular business  activity rather than laying off workers. More information about the program can be found at www.michigan.gov/workshare.

Temporary Leave vs. Termination

Due to the uncertainty regarding potential congressional action regarding whether and how furloughed workers will be able to access federal paid sick, family and medical leave resources, employers are strongly urged to place employees on temporary leave and advise the worker that they expect to have work available within 120-days as opposed to termination. There is no additional cost to employers, employees remain eligible for UI benefits through the state, and employees may remain eligible for potential federal assistance.

Steps for employers placing employers on temporary unpaid leave:

• Do not terminate the employee– specify a temporary / indefinite leave with return to work expected that is within 120 days.
• Do not create a contractual obligation to bring the employee back to work – Let the employee know that the situation is fluid and subject to change.
• Provide the employee with a formal Unemployment Compensation Notice. Employers will need to provide their Employer Account Number and Federal Identification Number.
• Communicate to the employee about their rights. Under Governor Whitmer’s recent Executive Order, workers who are placed on leave, or who are unable to work because they are sick, quarantined, immunocompromised, or have an unanticipated family care responsibility, are eligible for unemployment insurance benefits.
• Ensure employees are provided information on how to obtain unemployment insurance benefits. A factsheet can be found here.
• Get each employee’s up-to-date contact information.
• Let employees know if you will be putting updated information on the entity’s website or intranet, if applicable.
• Appoint a single, or limited number of individuals who will field questions, and communicate that information to employees.Keep a tally of all questions and answers. Periodically share with employees.

The state is monitoring issues related to continued medical insurance coverage and will update accordingly.

Elimination of Certain Unemployment Costs to Employers

Under the governor’s order, an employer or employing unit must not be charged for unemployment benefits if their employees become unemployed because of an executive order requiring them to close or limit operations.