As states begin or prepare to lift stay-at-home orders, many businesses are gearing up, as well. However, many employees are not as sanguine, citing a host of concerns, such as a lack of protective measures, the fear of infection and infection of those with whom they reside, or the fact that they currently receive more in unemployment compensation benefits than they will receive upon return to work. Some say they will not return, and some state officials have encouraged those fearful of returning not to do so. As this dance starts to play out, employers and employees will have multiple issues to consider.

Return to Work and Unemployment Compensation

On May 4, 2020, the Department of Labor (DOL) issued additional guidance to states regarding administration of their unemployment insurance programs. The guidance makes clear that, despite the additional flexibility provided under the CARES Act for administration of these programs, states may not “waive the requirement that an individual be able to work and be available to work.” In Unemployment Insurance Program Letter (UIPL) 10-20, the DOL explained that states may presume that an individual satisfies this requirement for unemployment where an employee was laid off because the employer temporarily shut down the business due to COVID or was directed to self-quarantine, but plans to return to work for that employer. Effectively, individuals need demonstrate only that they are able and available for that job, and if the work search requirement still applies (which has been waived by several states), employees must take “reasonable steps to preserve their ability to come back.”

The DOL FAQs also explain that where an employer is open, employees who refuse to return to work are not eligible for supplemental unemployment benefits under the CARES Act, unless they suffer from other qualifying issues (e.g., they are the sole caregiver for children whose school is closed, advised by a health care provider to self-quarantine, etc). Accordingly, state unemployment offices have begun issuing reminders to employees that they must return to work if called back by their employer and that refusing to do so may disqualify them from unemployment benefits. Other states have gone further and require employers to report employees who quit or refuse to return to work.

For example, the Ohio Department of Job and Family Services has asked employers to report workers who refuse to return to work and established an online portal for employers to submit this information. The Ohio Department stated that it will analyze each employee’s reasons for refusing to return to work on a case-by-case basis. However, if an employee can cite a “good cause” for failing to return to work, which may include work conditions and environment that pose a risk to the health and safety of the employee, that information may be considered as part of the eligibility decision.

The Texas Workforce Commission (TWC) issued guidance providing that employees who refuse work may still qualify for unemployment benefits if they are, or a member of their household is, 65 years or older, if they have been diagnosed or have been quarantined due to close contact with someone who has the disease and 14 days have not passed, and if they lack child care because the child’s school or daycare closed and no alternatives are available.

The Pennsylvania Department of Labor & Industry (DLI) issued FAQs stating that employees who are offered work by their employer and refuse to accept it may no longer be eligible for unemployment, unless there is good cause for the refusal. “Good cause” may include a situation where an employee is at high risk for severe illness if they contract COVID-19 and the employer cannot make a reasonable accommodation. Similar to other states, the DLI emphasized that each circumstance where an employee refuses to return to work is fact specific and will be reviewed on a case–by-case basis.

Return to Work and Reasonable Accommodations

As noted above, some employees may fear returning to work because they suffer from underlying health conditions making them more susceptible to severe illness if they contract COVID-19. According to recently updated EEOC guidance, if an employee does suffer from a condition that places the employee at a “higher risk for illness,” the employee must first inform the employer that the employee suffers from an underlying illness and request an accommodation. See our alert on this updated guidance.

Return to Work and PPP Loan Forgiveness

Employees’ refusal to return to work also may have serious consequences for employers who received loans as part of the Paycheck Protection Program (PPP). For the loan to be forgiven, recipients must use at least 75 percent of the funds on qualifying payroll and benefits costs within the eight-week period following disbursement of the loan. Employers who laid off employees may find it difficult to get those employees to return. Indeed, some employees receiving the additional $600 per week in Federal Pandemic Unemployment Compensation may be receiving unemployment compensation benefits that exceed their pre-unemployment earnings level. Yet, a delay in re-hiring employees may place employers, who are required to use their PPP funds on payroll expeditiously, in a challenging situation.

The attorneys in Ballard Spahr’s Labor and Employment Group are closely monitoring the executive orders and legislative changes issued around the country regarding employment issues surrounding COVID-19 and can assist employers in understanding new developments. To view legislation adopted in other states around the nation, please visit our State Legislative Tracker in the Ballard Spahr COVID-19 Resource Center.


Copyright © 2020 by Ballard Spahr LLP.
www.ballardspahr.com
(No claim to original U.S. government material.)

All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, including electronic, mechanical, photocopying, recording, or otherwise, without prior written permission of the author and publisher.

This alert is a periodic publication of Ballard Spahr LLP and is intended to notify recipients of new developments in the law. It should not be construed as legal advice or legal opinion on any specific facts or circumstances. The contents are intended for general informational purposes only, and you are urged to consult your own attorney concerning your situation and specific legal questions you have.