Furloughs and Unemployment: FAQS for Navigating Tough Times

Insider Pro-Tips from the VantagePoint Team:

Employee Contributions:

Q:) If employee contributions are taken from pay to cover a portion of insurance premiums plans, how will this money be collected when there are no paychecks? 
A:) You can take larger deductions before and after the time off, or request payment on a pre-set schedule.

Q:) Are you also offering Voluntary plans to your staff?
A:) The carrier may be willing to make some changes during a temporary layoff.  Ask for options.

COBRA Triggers

Q:) Can you continue to pay for health benefits when a one-month layoff extends into two or three?  
A:) Employees don’t have to be terminated or permanently laid off to be eligible for COBRA. Make sure you are clear in your obligations and communication to the staff when the layoff starts.

Triggering COBRA doesn’t necessarily mean employees will lose coverage. Once the employee returns to work, they can be reinstated after the layoff.

Q:) What if we have under 20 employees?
A:) COBRA rules, and your obligations, are different.  Identify both your budget to continue benefits and administrative considerations when crafting this policy.

Don’t automatically say you will cover employees for 45 days if it leaves you figuring out COBRA costs and billing for partial months.

For proper guidance, most firms use an outside service for COBRA administration.

Unemployment FAQs

(These rules are specific to NY; Rules vary by State)

Q:) Can an employee collect unemployment while on furlough?
A:) Yes. The current maximum weekly benefit from New York State is $504.

Q:) Is there a waiting period before an employee can collect?
A:) Normally there is a one-week waiting period. New York State is currently waiving this requirement.

Q:) Can a furloughed employee come back to work intermittently or on a reduced schedule?
A:) Yes. Partial unemployment benefits can be paid only if the employee works less than four days a week and earns $504 or less. Each day or part of a day of work causes the weekly benefit rate to drop by one-quarter.

Example:

• If the weekly unemployment benefit rate is $200, and the employee works three days and earns less than $504, they may receive $50 in benefits.
• If the employee works two days, they may receive $100 in benefits. If they work one day, they may receive $150 in benefits.
• Receiving partial benefits extends the length of time the employee may collect benefits.  If the employee earns over $504 in any week, no matter how many days worked, they cannot receive benefits for that week.

Q:) Can an employee collect unemployment insurance while on Paid Family Leave?
A:) No. When an employee is on Paid Family Leave (or vacation or any other paid leave), he or she is not entitled to unemployment benefits because he or she is still employed, even if not required to perform work.

Eligibility requirements to receive benefits

• Loss of employment through no fault of the employee
• Must have enough prior earnings from employment to establish a claim
• Must be ready, willing, and able to work immediately
• Must be actively seeking work
• Must keep a written record of work search activities for each week benefits are claimed, or use the word search tool located here
• To apply for benefits:
  • www.labor.ny.gov/signin
  • (888) 209-8124. Monday through Friday, 8 a.m. to 5 p.m.

Q:) If I furlough an employee do I have to pay out accrued vacation or sick time?
A:) No. You can permit or require employees to use their accrued vacation time or PTO during the furlough.  Employees that use accrued but unused PTO will delay the collection of unemployment benefits.

Furloughs and temporary layoffs are not easy.

When you’re trying to save money, and potentially your business, good planning for employee benefits decisions should be part of the process, as furloughs and unemployment are not so easy to manage.

Call us.  We are here to help.

We can be reached Monday – Friday from 8:30 am – 5:30 pm
@ 516-599-2120 or Info@VantagePointBenefit.com.