2020 COVID-19 Virtual Learning Series Presented By: Thank You To Our Event Sponsor

2020 COVID-19 Virtual Learning Series Presented By:

          Thank You To Our Event Sponsor:

LAYOFFS AND
FURLOUGHS IN
 THE TIME OF
   COVID-19

© Copyright 2019, Vorys, Sater, Seymour and Pease LLP. All Rights Reserved.

What are we talking about …

• Cost-reduction strategies overview
• Layoffs versus furloughs
• Unemployment
• Best Practices

Cost-reduction strategies

Expense reduction

Voluntary time off

Pay / hours reduction

Layoff

Furlough

FAQ

If a "shelter-in-place," "safer-at-home," or similar
order causes temporary shutdown of business, must
an employer pay its employees?

What’s the diff: Furlough and Layoffs

Furlough – Short-term
reduction in hours/pay to
zero, but individual
remains “employed” with
benefits
Layoff – Termination of
employment and benefits

FAQ

Can employees volunteer for furloughs?

Legal Risks: Furloughs and Layoffs

               • Disparate impact
    Both       • Wrongful termination

               • FLSA concerns
 Furlough      • Unemployment issues

               • WARN / mini-WARN
  Layoff       • OWBPA

Federal Warn Act

                   https://www.gao.gov/new.items/d031003.pdf

FAQ

T.I.G.E.R.S. has hourly and salaried employees.
After the release of Tiger King, the zoo's revenue
sharply decreases and Doc Antle wants to furlough
some of the staff. Are there special considerations
for exempt vs non-exempt employees?

(Enhanced) Ohio Unemployment Comp.

 Eliminates one-week    Quarantine/isolation       COVID-19 layoff
    waiting period           benefits                 benefits

               Mutualized tax         EES still need to
                  burden             meet UC eligibility

FAQ

GW Zoo is experiencing a similar slowdown in
business and wants to avoid layoffs by reducing its
employees' salaries. Can it reduce its exempt
employees' salaries?

(Enhanced) Ohio Unemployment Comp

   Partial       •Less than half of their previous average weekly wage OR
                 •Less than the benefit cap, if half of their previous average
unemployment      weekly wage would exceed the benefits cap (the cap is
                  $480/week with no dependents, $582/week with 1-2
   and UC         dependents, or $647/week with 3 + dependents).

                 •Requires ODJFS approval (30 days) implementation and
 Shared Work      changes (10 days)

Ohio – permits   •10-50% reduction in affected unit (two or more employees)
                 •Prorated UC benefits otherwise not available

FAQ

GW Zoo conducts an hours reduction. Joe is an
hourly employee at GW Zoo. He regularly makes
$150/week. After the reduction, Joe’s pay is
$100/week. Is he eligible for unemployment in
Ohio?

CARES Act: Federal Unemployment Comp.

 New / expanded
                                          And
 unemployment
• Pandemic Unemployment       • Reimbursement for non-profits
  Compensation                • Shared work reimbursement for
• Pandemic Unemployment         participating states
  Assistance
• Pandemic Emergency
  Unemployment Compensation

Pros and Cons: Furloughs and Layoffs
•   Furloughs:
    ―   Pros: employee morale, short-term reduced compensation costs,
        limits rehiring needs
    ―   Cons: continued cost of benefits and employment expenses, loss of
        productivity
•   Layoffs:
    ―   Pros: significant cost reduction, potential for increased efficiency, keeps
        most experienced employees
    ―   Cons: potential notice costs, insecurity with retained employees

FAQ

Are furloughed or laid off employees entitled to paid
leave under the Families First Coronavirus
Response Act?

Best Practices

•   Prepare a selection criteria
•   Don’t forget about retaliation / discrimination
•   5 Cs of communication (communicate, communicate,
    communicate, and communicate and then communicate)
•   Look for policy or contract issues
•   Consider unemployment – will a furlough trigger
    unemployment, Shared Work Ohio?

Best Practices

•   Analyze WARN (six-month trigger)
•   Comply with the OWBPA (if you’re using severance
    agreements)
•   Consider recall procedures
•   Consider talent retention / public relations issues

COVID-19 Legal Developments / Updates
                          •   Vorys Coronavirus Task Force
                              vorys.com/coronavirus

                          •   Weekly, free webinars on the
                              business/legal implications of
                              the pandemic: Thursdays at
                              noon

                          •   Want email updates or have
                              additional questions?
                              Contact Chaz Billington at
                              cfbillington@vorys.com or
                              Akilah Craig at
                              afcraig@vorys.com

Remember, we are …

Not …

Contact Info

                        Chaz Billington
     @CFBHR
     https://www.linkedin.com/in/charlesbillington/
     cfbillington@vorys.com
                            Akilah Craig
     https://www.linkedin.com/in/akilah-craig-950a5721/

     afcraig@vorys.com