Unemployment benefits could delay getting back to work

Employees weigh benefits versus paychecks
Unemployment benefits could delay getting back to work
Posted at 11:41 PM, May 03, 2020
and last updated 2020-05-04 07:10:43-04

COLORADO SPRINGS — As businesses start to reopen their doors and use their Paycheck Protection Program money to keep employees on the payroll, some staff may decide to wait to return to work if they are making more on their unemployment benefits. News5 learned what the Pikes Peak Small Business Development Center recommends to try and maintain employees, even if they are making more off of unemployment benefits.

Thousands of Coloradans lost their jobs when COVID-19 hit home, and now qualify for unemployment. "On March 9, we had 400 initial claims filed for unemployment. Two weeks later, we we're averaging anywhere from 10,000-25,000 a day," said Cher Haavind, spokesperson for the Colorado Department of Labor and Employment.

Federal Pandemic Unemployment Compensation is a way to increase unemployment benefits for Americans impacted by COVID-19. "That $600 is called Pandemic Unemployment Compensation, it's effective March 29. So, if you are out of work due to COVID-19 or had an existing claim, for regular benefits on that date we would pay you back to that date retroactively, and they're through July," said Haavind.

These new benefits could impact when an employee decides to return to work. "With these federal benefits that are now available, one of which provides $600 a week on top of your regular unemployment benefit amount or your other federal benefit amount, these wages are higher than any benefits we've seen in the past... Certainly if somebody has been supplementing their income with unemployment higher than their wages, the decision to go back to work is a difficult one for them," said Haavind.

Haavind said the system is designed to be partial wage replacement, not full wage replacement. However, she said the department has been contacted by hospitality and food service industries because some of their employees are choosing to stay on unemployment rather than return to work. "Because businesses are just now starting to look at reopening practices, it's not something we're seeing a high occurrence of yet. So, I think it would be depending on how quickly employers feel they're ready to reopen and call back their workforce," said Haavind.

There was an emergency rule passed that spoke to a couple of different factors concerning employee's health and wellness, and those who may be considered a vulnerable population. "If you have a condition where you're at greater risk for contracting COVID-19, you would tell us that when you're certifying your ability to return... We're not requiring documentation, but if it's an individual underlying health concern and you have documentation, that might be helpful for you," said Haavind.

The Department of Labor and Employment will look into why a person would decide they will not go back to a suitable work environment. "If you tell us you just are making more on unemployment than your wages, then we would go to that employer and do some kind of fact finding on the circumstances of the refusal to return," said Haavind.

Michelle Talarico is the owner of Picnic Basket Catering, and said they told their employees when the closures began that they would still be standing after it all, and would advocate to get the staff back. Picnic Basket has been participating in curbside service during this pandemic. "We're finding people are excited to get back to work, and they're committed to helping us, and they're grateful that we hung in there," said Talarico.

Talarico said she knows of a person in the restaurant industry who was offered the opportunity to go back to work, and turned it down. "This person is really struggling with what to do because they feel like, this was the comment, they've never made more money. And, my heart just hurts for the small business that is hearing that," said Talarico.

She also said it's important for businesses to make sure employees feel safe when back in the workplace. "We have to get this economy moving, I believe, in a safe way, but it's going to count on people coming off of unemployment... Take seriously the CDC recommendations and have a safe workplace so that we can get this going for everybody," said Talarico.

Those with the Pikes Peak Small Business Development Center want to help employers maintain their staff. The Executive Director, Aikta Marcoulier, gave New5 five tips businesses can use:

  1. Consider hiring new people, maybe those who do not qualify for unemployment.
  2. Hazard pay is allowed under the Paycheck Protection Program, and could be beneficial at a time when people could be nervous about a second wave of the virus.
  3. Maintain and promote a company culture, to give employees a sense of purpose.
  4. Remember the job being offered has benefits you cannot get while on unemployment.
  5. See if there is any room for flexibility in the current benefits package offered by the business.

It's also important to give employees the chance to broaden their skill set. "It's not okay to think that you're going to keep your employees forever. As a good employer, up-training your employees, putting them in a new position could keep them forever. Retention is important, but there's also grants and programs with the workforce center to help you do that," said Marcoulier.

Federal Pandemic Unemployment Compensation will be provided throughout July.