Unemployment Tweak Could Help Companies Rehire
Last week, the CARES Act’s SBA-administered Paycheck Protection Program loans, at least temporarily, reached its funding limit. While Congress debates and considers its options regarding this program and other COVID-19 responses, states can and must step in to act in support of small businesses. They can do so by holding businesses harmless on their unemployment taxes for layoffs they likely would not have made otherwise.
Government measures taken to try and lower the rate of new infections are tough, but important. They have also had predictable and devastating economic consequences, including business closures and layoffs. As a result, millions of people have filed new unemployment claims in recent weeks.
While we work on solving the COVID-19 crisis, we must have a plan in place to kick-start the economy when the immediate danger abates. We must create an environment where people can get back to work, and businesses can rehire employees they likely did not want to let go in the first place.
This solution is simple but can have a major benefit. At some point, the states and federal government will decide to end their declared states of emergency. On that date, businesses would have 30 days to extend formal offers to rehire laid-off workers at similar or identical titles and pay under this proposal. If the business extends an offer to 85% (or another suitable amount) of its laid-off workers, and successfully rehires a majority of those offered, then they will not suffer an increase to their experience rating for unemployment taxes. Since an employer’s experience rating is based on their willingness and ability to retain workers, the unique circumstances of the COVID-19 outbreak should not be held against them. (Read more from “Unemployment Tweak Could Help Companies Rehire” HERE)
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