Published in Economic Development

State issues guidance for employers hoping to avoid layoffs

BY Thursday, March 19, 2020 05:00am

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Michigan employers trying to stay afloat as the coronavirus spreads should consider work sharing or offer temporary leave to employees to avoid layoffs, state officials said today.

The Department of Labor and Economic Opportunity has issued guidance meant to avoid potential layoffs, which comes after an executive order from Gov. Gretchen Whitmer that expands unemployment benefits. In some cases, small businesses are issuing layoffs to ensure workers maintain reliable compensation.

For companies looking to continue operations but cut back hours for workers, state officials say the Unemployment Insurance Agency’s work share program is an alternative to layoffs. Whitmer expanded the program this week ahead of what’s expected to be more frequent use from companies as recession sets in. 

The work sharing program allows employees to work a reduced number hours while qualifying for some unemployment benefits. Those benefits are based on a percentage of reduced hours of work and pay. (Guidance on how employers can apply for work sharing is available here.)

State officials also “strongly urged” employers to place workers on temporary leave — as opposed to termination — while advising them that work is expected to be available within the next four months. Under temporary leave, employers face no additional costs and employees remain eligible for state unemployment benefits and potentially federal assistance.

The state recommends that employers pursuing a temporary leave option should specify an indefinite leave with work expected again within 120 days, but not create a contractual obligation to bring the employee back. The state lists additional steps employers should take during the process.

“We know that many families and businesses are and will experience economic pain as a result of the COVID-19 pandemic,” LEO Director Jeff Donofrio said in a statement. “Through Governor Whitmer’s executive action and existing state programs, there are resources for employers affected by COVID-19. We are also 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.”

Also on Wednesday, the Michigan Department of Treasury gave businesses disrupted by the pandemic a 30-day extension to pay their quarterly sales, use and payroll withholding taxes that are due Friday.

Those payments are now not due until April 20.

“Our small businesses are important drivers of Michigan’s economy,” State Treasurer Rachael Eubanks said. “This change will provide some help to businesses as they navigate their way through this state and national emergency.”

Brian Calley, president of the Small Business Association of Michigan, emphasized the state was not forgiving the tax liability, “but it’s saying that you don’t have to pay them now and giving some breathing room. This is important.”

Businesses with questions were urged to call the state’s Treasury Business Tax Call Center at 517-636-6925.

Read 3347 times Last modified on Friday, 20 March 2020 17:04