COVID-19 Layoffs: A How-To Guide for Employers in Washington State

This is definitely one of the sadder posts we’ve had to make. Three weeks ago we were all humming along as normal, and then — Boom! Massive layoffs were upon us, the magnitude of which we have never seen in the history of this country.

At Powerfully Simple HR & Leadership, we have received a lot of calls this week asking what employers need to do to carry out the layoff process.

The hardships of COVID-19 may have a detrimental effect on your business and ultimately your employees.  If your business has been required to close its doors or if you are unable to sustain enough business to keep your employees on payroll, you may be considering laying off some, if not all your employees. 

The Washington State Employment Security Department (ESD) recognizes a lack of demand or slowdown in your business, or a requirement to shut your doors due to the COVID-19 quarantine may lead to making this difficult decision. 

How to Perform Layoffs

Documenting this process is essential to ensuring your business is acting in good faith.  Here is what your documentation should include:

  1. State the reason for the layoff:  Did you have to shut your doors because your business was considered non-essential?  Alternately, is your business still open, but you seen a drop in business due to COVID-19, and can no longer retain your prior staffing level?  Be specific. 
  2. Document the procedures you used to determine who will be laid off.  Remember, it is never okay to choose to lay off one person over another due to any protected classes, including (but not limited to) age or disability.
  3. How much notice you will give your employees before the layoff?
    • Employers with 100 or more employees must provide a 60-day notice prior to business closures or layoffs under the WARN Act, Worker’s Adjustment and Retraining Notification.  The act includes an exception to the warning notice timeframe if employers believes their situation is the result of an economic crisis.  Employers are advised to seek legal counsel for help in interpreting this provision.  Further information on the WARN Act can be found here.
  4. Provide written documentation to each employee who is being laid off. Specify the date the layoff is effective, whether the layoff is permanent or temporary, the expected amount of time of the layoff (Washington State employees can be put on Standby for up to 12 weeks at the time of this writing), the reason for the layoff, and links to information that will help them apply for unemployment benefits.

It is important to note that employees laid off prior to the Family First Coronavirus Response Act effective date of April 1, 2020 may not eligible for the Unemployment Benefit under this Act.  Therefore, documentation outlining the timing of your layoff decision is very important.

Offer Compassion

The people we work with often feel like a second family to us. We share birthdays, celebrations, teamwork, and success. Because we see them everyday, our coworkers are often are the people who hear about our sorrows and troubles as well. Recognize that your employees are not only losing their income, but much of their social circle at the same time.

If your employees are on Standby, keep them in the loop by providing weekly updates as the situation changes. If you can, check in on your employees. As you hear of resources that become available, such as expanded unemployment benefits, let your employees know. All of these actions will go a long way toward helping your employees feel secure, and letting them know that you care.

Will Your Employees Be Eligible for Unemployment Insurance?

Eligibility:  Employees laid off due to COVID-19

Waiting Period:  The traditional one-week waiting period to be eligible has been waived. 

Standby Status:  Employees applying for Standby Status will not have to look for another job while collecting unemployment benefits for up to 12 weeks.  Affected employees should be referred to the Employment Security Department website.

An Unemployment Benefits Application Checklist is attached for your information and available to provide to your affected employees. 

Other Things to Consider

  1. How does a layoff affect the employee’s health benefits?  It is important that you talk to your health insurance broker prior to layoffs, and convey this information clearly to your staff.
  2. COBRA qualifications – If you have 20 or more employees, they are likely eligible to continue their health insurance coverage through the COBRA program.  Ask your health insurance broker whether you qualify.
  3. Retirement Plan Implications – Since your employees will not be receiving a paycheck, their normal deductions will pause.  Will you continue offering an employer match during this time?  Talk to your plan administrator about your options.

If you need help sorting out the various programs and how they might work together for your business, feel free to contact us using the contact form on this page.  We are happy to help you!

A special thank you to Michelle Helder, who wrote the majority of this article.

This article is meant for informational purposes only and should not be taken as legal advice.  Only your attorney can give you legal advice.