COVID-19 is creating unprecedented challenges, both for public health and the economy—and those challenges are causing many businesses to lay off their employees and shutter their doors, at least for the time being.
If your business is having to lay off employees, the process can feel overwhelming and confusing. Let’s take a look at some of the most common questions about how to navigate employee layoffs and terminations in California—and, more importantly, the answers you need to navigate layoffs during the coronavirus:
Q: What information do I need to get my employees to ensure they have what they need to file for unemployment benefits?
A: When your employees file an unemployment insurance (UI) claim with the Employment Development Department, they’ll need the following information:
- Your official company name (as it appears on their pay stub or W2)
- Company contact information, including both mailing and physical addresses, direct supervisor’s name, and company phone number
- Their last physical work day
- Gross earnings in the last week they worked, beginning with Sunday and ending with their last day of work
If you want to make the process easier for your employees, you can provide this information at their termination meeting so they have it readily available when they apply for UI benefits. (You can access their earnings information through Hourly’s Payroll function and information on hire date on each employee’s individual W4.)
Q: How do I confirm my employee’s unemployment status with the Employment Development Department?
A: Once your employee files a UI claim, you’ll receive a Notice of Unemployment Insurance Claim Filed from the EDD through the mail. Unless you wish to dispute the claim, there’s nothing you need to do. If there is any incorrect information on your employee’s claim (for example, the time of termination), you’re required to return the form with the correct information within 10 days of receipt.
Q: Is it even legal for me to lay off all of my employees—especially suddenly and without warning?
A: Under normal circumstances, the California WARN Act requires employers to give employees and state and local representatives 60 days notice before moving forward with mass layoffs.
However, we’re not operating under normal circumstances—and many businesses are having to close their doors immediately, both to protect their employees’ safety and to comply with the current statewide shelter in place order.
In response, Governor Newsom has issued Executive Order N-31-20, which temporarily suspends the WARN Act’s 60-day notice requirement. There are still, however, a number of requirements employers have to meet in order to remain compliant with the WARN Act, including providing written notice to all affected employees, the EDD, the Local Workforce Development Board, and the chief elected official of each city and county government where the closure and/or layoffs are taking place. (For more on WARN Act requirements and what needs to be included in your written notice, visit the EDD’s COVID-19 WARN FAQ page.)
Q: When do I give my employees their last check—and what needs to be included?
A: The appropriate time to give your employee their final paycheck is at their termination meeting. Their final paycheck needs to include any outstanding money owed to the terminated employee, including any accrued PTO.
Q: With social distancing in full effect, how do I make sure my employees get their final paycheck in a timely manner?
A: Under normal circumstances, you would terminate your employee and give them their final paycheck in person. But the coronavirus—and accompanying social distancing—is changing the way we interact; in order to protect the safety of yourself and your employees, an in-person meeting might not be possible. You still, however, need to get them their final paychecks in a timely manner.
Unfortunately, this is a new situation—and, as such, there’s no clear answer as to how to handle the situation and what constitutes a “timely manner.” If you’re unclear, talk to your lawyer or call the EDD or the Labor Commissioner’s Office for additional guidance.
Q: What about insurance?
A: If you offer health, dental, vision, and/or medical reimbursement plans, you’ll need to provide terminated employees with a COBRA notice outlining their rights for continued coverage. You’ll also need to contact your insurance carrier and fill out any paperwork necessary to terminate the employee’s coverage.
Q: What other steps do I need to take when terminating an employee?
A: There are a few other housekeeping issues you’ll want to take care of when laying off employees, including:
- Collecting any company property (cell phones, tools, company computers, etc.)
- Terminating access to any sensitive company information
- Cancelling or removing access to any company accounts or credit cards
Q: Is there any support available to help employers prevent layoffs during the coronavirus pandemic?
A: There is. Both the federal government and the state of California are moving forward with initiatives to help employers during the coronavirus pandemic.
Rapid Response Team
If you’re considering large-scale layoffs or closing your business, Rapid Response Services may be able to help. Rapid Response is a business-focused program designed to assist companies facing potential layoffs and closures.
Payroll tax extensions
If you’re experiencing financial hardship as a result of COVID-19, the EDD is allowing businesses to request an up to 60-day extension to file state payroll taxes and/or deposit state payroll taxes without interest, penalties, or fines. In order to qualify, businesses need to request an extension in writing within 60 days of the original due date of the payment or return.
Originally posted on Check the full original content on Hourly.io & written by Deanna deBarai.
