As American businesses begin to reopen after strict government shutdowns aimed at slowing the spread of COVID-19 (coronavirus), many employers are encountering employees who refuse to return to work. Whatever the motivation – high unemployment benefits, family benefits or fear of infection – it is important for employers and employees to understand their rights… and consequences.
Layoff v. Furlough
First, at the onset of the government restrictions, many employers were faced with a decision to either layoff or furlough employees. A layoff is an involuntary separation between an employer and an employee that occurs through no fault of the employee. Typically, layoffs occur when there is not enough work. A furlough is considered to be an alternative to a layoff. It can be administered in different ways, such as a reduction in work hours or a requirement for the employee to take a certain amount of unpaid time off. However, unlike a layoff, the furloughed worker remains an employee. As such, a furlough is akin to an unpaid leave of absence. The employee is guaranteed working hours once business resumes.
Refusing to Return to Work
Since furloughed worker are still considered employees, they are must continue to adhere to the scheduling demands of the employer. A refusal to do so is grounds for discipline, including possible termination.
A worker who was laid off has no duty to adhere to scheduling demands because they are no longer an employee. An offer by the employer to return to work is nothing more than a job offer. The worker is free to either accept or reject the offer.
Jeopardizing Unemployment Benefits
Both furloughs and layoffs allow a worker to apply for unemployment insurance (UI) benefits. By certifying for UI benefits, workers are declaring by law that they meet the eligibility requirements to be paid UI benefits.
Due to the impact of COVID-19, the Employment Development Department (EDD) has implemented temporary exceptions for all UI claims until further notice. First, the 7-day waiting period is waived for claims beginning on or after January 19, 2020. Second, workers are not required to look for work each week to be eligible for benefits.
However, workers must still be willing to accept a job offer in their customary occupation. If a job offer is refused, it may jeopardize benefits. In other words, recipients of UI benefits do not need to apply for jobs, but they must accept “suitable work.”
If work is declined, the EDD will schedule a phone interview to investigate whether there was “good cause” to decline work. “Good Cause” is defined as real circumstances, substantial reasons, objective conditions, adequate excuses that will bear the test of reason, just grounds for action and always the element of good faith.
Fear of Infection
Health and safety considerations can constitute good cause, but only “if a reasonable person genuinely desirous of remaining employed would have left work due to an undue risk of injury or illness.” Title 22, Section 1256-15(b). Even then, the worker has a duty to attempt to preserve the employment relationship. Failure to do so negates what would otherwise constitute good cause. This duty may be satisfied by reasonable steps, including, but not limited to, any of the following:
- Seeking an adjustment of the problem by allowing the employer an opportunity to remedy the situation if the employer can reasonably do so.
- Seeking a leave of absence or transfer to other employment with the same employer if likely to remedy the problem and if the claimant knew or should have known that a leave or transfer probably would have been granted if one had been requested.
- Taking steps within his or her own control . . . [Title 22, Section 1256-3(c)]
In order to be eligible for UI benefits, the claimant must be able to demonstrate that childcare can be arranged within a reasonable period of time, should employment be secured, the present lack of childcare should not affect availability. However, many schools and childcare facilities are closed due to the virus.
In the response to these circumstances, the EDD has said, “Our EDD representatives will determine eligibility on a case-by-case basis by scheduling a phone interview with you. For example, you may be eligible for unemployment benefits if your employer has temporarily allowed you to work less than full-time hours due to your child care situation. In such case, you may be eligible for reduced benefits based on the amount of your weekly earnings, as long as you meet all other eligibility requirements. The EDD will contact you and your employer for information to determine your eligibility.”
Based on this response, an outright refusal to return to work may jeopardize UI benefits. Therefore, it is best for the worker to collaborate with the employer on a schedule that permits childcare. Even if hours are reduced, UI can make up the difference in pay.
Jeopardizing Healthcare During Furlough
“Furlough” is not a term that has legal meaning in regard to health and welfare benefit plans. A more appropriate term might be “leave of absence,” which can be voluntary or involuntary. Some group plans have provisions to address coverage eligibility for employees who are on a leave of absence, and those rules and contract provisions may apply to furloughs.
Plan documents may require employees to be regularly engaged in a certain number of paid hours of service per week or per month to qualify to participate in the group health benefit plan. Hours of service can be defined as work hours, holidays, and approved leave or other occurrences like jury duty. Group health plan contracts with insurance carriers that underwrite the benefit plan typically also require employees to meet hours of service requirements.
Any employee who does not accrue enough paid hours of service in a given period may be deemed ineligible to participate in their group benefits plan by the plan or carrier.
Applicability of New COVID-19 Laws
In response to COVID-19, the federal government has passed the Emergency Medical Leave Expansion Act (“EFMLEA”), which amends FMLA and broadens protection leave coverage. The EFMLEA applies to all employers with fewer than 500 employees.
The EFMLEA permits eligible full- and part-time employees with up to 12 weeks of job-protected leave if they are unable to work or telework to take care of their minor children in the event of a school closure or if their child care provider is unavailable due to COVID-19.
Congress also passed The Emergency Paid Sick Leave Act (EPSLA), which requires employers to provide eligible full-time employees with up to 80 hours of leave, with full pay. These employees must not be able to work or telework due to a quarantine order, a health care provider’s advisement to self-quarantine, or to seek a diagnosis when experiencing COVID-19 symptoms. EPSLA is a paid leave, so medical benefits would need be paid through normal payroll.
Furloughed employees, or employees whose worksite has been closed even for a short period of time, are not entitled to leave under the FFCRA during the furlough or closure. This is true even if the employer closed pursuant to a federal, state, or local directive to do so.