I Want a New Plan

Back in the 1980’s Huey Lewis sang about wanting a new drug.  Small business owners want a new plan for coping with the pandemic.  Instead of slowly re-opening, they are facing a new partial lockdown as covid-19 infection rates increase again.

Small companies that survived the initial lockdown are wondering whether they can survive a second lockdown.  The owners face hard decisions, like telling employees who were laid off during the initial lockdown period that their jobs are gone permanently or laying off more workers. 

Meanwhile, their employees are also facing hard choices.  The ones still on the job wonder if they’ll be the next to go.  The ones receiving unemployment are wondering how they’ll survive when the extra $600 federal government top up goes away on July 31st.  It isn’t easy trying to find a new job in the middle of a pandemic with a stalling economy.

There are no right answers to any of these problems. There never are. It’s about assessing the risks based on the information available and then moving forward with a decision. For employers planning their next steps, consider the following.

  1.   If the employee’s old job is gone to never-never land, can the employee be re-trained to do a different job that still exists at the company?
  2.   If a lack of customers means termination is the only option, what do the soon-to-be former employees look like?  If only older folks, brown-skinned folks, women and other “protected classes” are let go, the EEOC may become overly interested in the company’s employment practices. 
  3.   Is the company financially able to soften the blow of a termination?  For example, Tennessee’s “mini-COBRA” law which applies to companies with less than 20 employees, allows an employee to stay on the employer’s group health plan for three months after the date of termination. Paying the employee’s portion of the premium during those three months can ease the transition for the employee.

Whatever the final decision, it will be hard on everyone. No one likes layoffs or terminations, but the company has to be able to survive so that it can provide a living to those still employed.  If the final decision is to reduce the workforce permanently, I’d like to suggest an approach that is not required by any employment law. 

Be kind to the employees who will no longer have a job.  Everyone is experiencing financial distress at the moment and that increases emotional distress.  Employers can’t be a substitute for mental health counselors or go bankrupt trying to fix employees’ financial problems.  But employers should think about how to soften the blow, beginning with how the news is delivered and when feasible, offering severance packages.   

If your company has questions about how to deal with employment issues related to covid-19, Corporate Compliance Risk Advisor can help.  Whether it means answering HR questions, revising policies, or being a sounding board for ideas on getting through the pandemic, we’re here as a resource for your team.

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