May 14, 2020

On May 9, 2020, the U.S. Department of Labor published a program letter which answered a series of questions raised by states regarding the Federal Pandemci Unemployment Compensation (FPUC) program. The FPUC program, authorized by Section 2104 of the CARES Act, provides an additional $600 weekly payment to certain eligible individuals who are receiving other qualifying benefits. The responses are split into three categories: Issuing Payments, Overpayments and Recovery, and Financial Information and Reporting. Some of the answers provided by DOL in UIPL No. 15-20 include: Question: Is the state required to make FPUC payments weekly? Answer: The state must make FPUC payments on the same schedule as the state’s regular UC payments. If the state pays regular UC on a bi-weekly basis, it can maintain that same schedule for FPUC. Question: Is an individual who is working part-time, or has gone back to work part ­time, and is collecting partial UC benefits for a week eligible for FPUC? Answer: Yes. An individual working part-time who otherwise meets state eligibility requirements for the underlying benefit is eligible to receive the FPUC payment. Question: Does the additional FPUC payment affect how much a person could earn while working par- time before a deduction is made from the weekly underlying benefit payment? Answer: No. All earnings are deducted from the underlying UC benefit payment. If an individual’s earnings reduce the week’s underlying benefit payment to zero, the individual would not be eligible for FPUC for that week. Question: Are FPUC benefits subject to federal income tax withholding? Answer: Yes. Both the underlying benefit payment and the FPUC benefit payment are subject to federal income tax withholding. Individuals may elect to have federal withholding deducted from their FPUC payments separately from the withholding for the underlying benefit payments. Question: May the state suspend benefit offsets to provide relief to unemployed individuals? Answer: No. The state may not suspend benefit offsets. The Middle Class Tax Relief and Job Creation Act of 2012 changed the benefit offset provision from “may” to “shall” under both Section 3304(a)(4)(0), FUTA, and Section 303(g)(1), SSA, so federal UI law requires states to offset benefits. Question: How should states handle prosecutions of FPUC fraud overpayments? Answer: Individuals who fraudulently obtain FPUC benefits are subject to prosecution under 18 U.S.C. § 1001, among other federal criminal statutes. States must pursue FPUC fraud cases in the same manner as all other federal UC fraud cases. For referrals of fraud cases to the U.S. Department of Labor’s Office of Inspector General (OIG), states should follow the guidance provided in UIPL No. 29-05. “With all 50 states and two territories already providing this important benefit to eligible claimants, we hope today’s guidance assists these states and territories in continuing to faithfully execute this program during this challenging time,” said Assistant Secretary for Employment and Training John P. Pallasch in a news release. “The U.S. Department of Labor will continue to stand behind states as they administer this and other vital CARES Act programs, and today’s guidance is yet another example of our ongoing  commitment.”

Conducting a layoff is never easy—and conducting a layoff virtually adds new challenges for employers. While difficult for both the employer and employees effected, employers can improve this process by utilizing best practices. Effective remote layoffs can ease this difficult time for laid-off employees, while avoiding risk for the employer. What Are Layoffs?Layoffs are mass firings of employees, sparked by a need to cut expenses to save an organization in crisis—not typically due to employee performance. However, layoffs are permanent. Unlike furloughed employees, laid-off employees no longer have access to their employee benefits. However, they are typically entitled to unemployment assistance. Expansion of Remote Work—and Remote LayoffsA survey conducted by the Society of Human Resource Management and Oxford Economics found that 64% of HR professionals report having salaried professionals who are working remotely. Though remote work had been growing prior to the coronavirus disease (COVID-19) pandemic, more employees are working remotely than ever before.This same survey found that 32% of employers are planning on reducing their headcounts—through actions such as layoffs. Given current economic conditions, cost-saving measures such as layoffs are a reality for many employers. Unfortunately, in-person layoffs aren’t always feasible, and employers should prepare accordingly. Conducting a Remote LayoffWhen creating a process for remote layoffs, employers can consider including the following practices: • Set up a meeting—Ensure varying time zones are accounted for, as participants may be joining from various locations.• Include HR, and the employee’s manager—Including both HR and the employee’s manager can eliminate the need for multiple conversations.• Use video platforms if possible—Though the layoff won’t take place in person, using a video platform can allow for a face-to-face conversation. If video is not an option, consider a phone conference rather than an email.• Be detailed—Include critical information such as the termination date, and benefits and compensation information.• Create expectations—Be transparent about next steps for the affected employee—including the return of company-owned critical assets.• Prepare to answer questions—Support the laid-off employee by being prepared to answer clarifying questions that he or she may have. Prepare for Follow-up StepsWhen conducting layoffs—there are necessary steps to be completed. To ensure that loose ends are tied up, employers may consider the following: • Proactively involving IT—Before conducting remote layoffs, communicate with IT about removing the laid-off employee’s access to internal networks. As you won’t be able to collect equipment immediately, it will be necessary to conduct IT tasks remotely. Let IT know of any required actions in advance to ensure that tasks can be completed in a timely manner while avoiding missteps. • Creating specific follow-up actions—There may be follow-up actions that need to take place—don’t hesitate. Follow-up actions may need to be completed not only by the employer but by the employee being laid-off. Employers will want to plan for follow-up actions, including:o Mailing or shipping necessary materialso Providing necessary resources Employers should also ensure to provide the laid-off employee with guidance and resources to complete any required tasks. These may include: o Returning any proprietary documents or informationo Requiring signatures—completed via next-day delivery, or electronically Effective Remote LayoffsLaying off employees can be a necessary reality for many employers. More work functions, including the process of laying off an employee, are often beginning to take place remotely. Be using best practices, employers can minimize risk for the organization and ease the transition for affected employees. Laws and guidelines related to terminations may vary—when updating practices, employers should consult with local legal counsel. For additional remote workplace resources, contact Pinkerton Insurance Group.