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.
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:
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.