Most jobs cannot be done exclusively at home. Essential employees who cannot work at home need to go into work, but what can you do for your non-essential employees who can't do their jobs from home? Or even, what happens when there just isn't enough work or enough revenue to pay people--even if they can work from home?
The gut answer a layoff. If there isn't enough work, you can terminate employees. Furloughing is another option--this is where you keep employees as employees (and often continue their benefits), but they don't work and you don't pay them.
There is a third option that your employees might prefer: a "workshares" program. This is where you reduce employees' hours and pay and they receive partial unemployment payment from the state. It can be an advantage for businesses--that get to keep their employees--and employees, who get to keep their paychecks.
However, it's not the answer to all business problems during the shutdowns. Here are some things to consider.
- These are state administered programs. Don't assume that your state has a running program and that your employees will be eligible. Double-check before you make any promises. Policies and practices have changed and will continue to change, so if the answer was no the last time you checked, check again.
- You're still paying employees for all time worked. You don't get 40 hours of work out of a workshare employee while paying for 20 while the state pays the other 20. You get what you pay for.
- Exempt employees can be tricky. Exempt employees need to receive the same paycheck regardless of the hours they work. While you can cut pay and hours and still maintain the exemption under the Fair Labor Standards Act, you need to be careful. Employees still have to meet the salary minimum--which is $684 per week (equivalent to $35,568 per year). So if you have an exempt employee who earns $1000 a week as a full-time employee, and you cut that person down to 20 hours per week, the new salary would be $500 per week, below the federal minimum. (Your state minimum may vary, but all have to meet the federal standard.) Now the employee is non-exempt.
- It can still affect your bottom line. Businesses take a small hit whenever a former employee receives unemployment. This is considered the same--your costs will go up if there isn't a program in your state to mitigate these extra costs.
Keeping your employees and keeping them paid can be a great boon to your business. It's definitely worth checking out, but don't jump in blind.