Frequently Asked Questions – Layoffs and Unemployment Compensation in New Hampshire
COVID-19 is affecting all aspects of society and its ramifications are growing each day. Unfortunately, this crisis has also required many businesses to contemplate whether they need to reduce employees’ hours, furlough, or even lay off employees.
Employers are balancing satisfying their business obligations and maintaining viability while also looking out for their employees’ best interests and retaining their workforce. These considerations naturally spur several questions relating to unemployment compensation and employer’s obligations with respect to an employee filing for unemployment consideration. Below is some timely guidance for you to keep in mind.
Changes to New Hampshire Unemployment Insurance – What You Need To Know
On March 17, 2020, Governor Sununu signed multiple emergency bills into law in response to the COVID-19 outbreak. One of the measures pertains to temporarily expanding eligibility for unemployment benefits for workers impacted by COVID-19 (Executive Order 2020-04, Emergency Order #5). There are four primary points to keep in mind.
1. The one-week waiting period has been eliminated for any individual who files for unemployment benefits while Executive Order 2020-04, or a subsequent related directive or order, is in effect.
2. Governor Sununu expanded employee eligibility for state unemployment benefits to self-employed individuals and other individuals who are generally excluded from receiving unemployment benefits.
3. Individuals can now claim unemployment for the following reasons:
- If an individual has a current diagnosis of COVID-19;
- If an individual is quarantined (including self-imposed quarantine), at the instruction of a health care provider, employer, or government official, to prevent the spread of COVID-19;
- If an individual is caring for a family member or dependent who has COVID-19 or is under a quarantine related to COVID-19; or
- If an individual is caring for a family member or dependent who is unable to care for themselves due to the COVID-19 related closing of their school, child care facility, or other are program.
4. Unemployment compensation paid pursuant to Executive Order 2020-04 will be charged against the unemployment compensation trust fund and not assigned against the account of the most recent employer. Further, NHES will not seek reimbursement for charges made against the unemployment compensation trust fund under Executive Order 2020-04 for certain employers, including, but not limited to, non-profit organizations.
Q. What’s the difference between a furlough and a layoff?
A furlough is a temporary layoff from work. During a furlough, employers require their employees to work a reduced schedule or to take a certain amount of unpaid time off. A furlough is generally considered an alternative to a layoff because employees typically return to work at the end of the furlough period. A layoff, on the other hand, involves a separation from employment. The separation can be temporary or permanent.
Q. If I reduce my employees’ hours or if I furlough my employees, can they collect unemployment compensation?
Yes, if they’re not working, they are eligible for benefits. If they are working reduced hours, whether they’re eligible for benefits will depend on how much they’re getting paid. An individual can seek unemployment compensation if they are “partially unemployed.”
To be “partially unemployed” means one is working less than 35 hours and does not earn more than the employee’s weekly benefit amount (“WBA”).
Q. Can employees use paid time off or can I voluntarily pay employees the difference between an employee’s unemployment benefits and their regular rate of pay?
Generally, no. The employee’s nonwage income will reduce the amount he or she receives as unemployment compensation. In general nonwage payments (such as PTO) will reduce an employee’s unemployment benefits, even if the employee remains eligible for unemployment.
Q. If I furlough or lay off my employees, do I have to pay them accrued unused vacation time?
It depends on your policy. Under New Hampshire law, an employee must be paid for accrued unused vacation time upon termination if the employer’s policy provides for this arrangement.
Q. Do I have to treat all employees uniformly regarding reducing hours, furlough, and layoffs?
Yes and no. An employer may choose to reduce hours for some employees and furlough or lay off others. But employers must carefully consider its criteria for selecting which measures apply to each employee as to reduce any potential disparate impact and minimize the risk of retaliation claims. Specifically, if you are concerned about the vulnerability of older workers or workers with disabilities to the virus, you should not be implementing changes only to those groups.
Q. If I cover the premiums for health insurance for employees on furlough/temporary layoff, will that make them ineligible for unemployment compensation? Is the answer the same if it is through COBRA because my policy will not cover anyone who is not actively employed?
Under New Hampshire law, traditional health insurance or COBRA benefits will not impact your employee’s ability to receive unemployment benefits. Nonwage payments, such as payments for rent, housing, and lodging, however, may reduce employees’ benefits, so discuss with an attorney before reimbursing an employee for certain payments. Also remember, employees may receive less expensive benefits through the Affordable Care Act.
The COVID-19 crisis is rapidly evolving and so too are changes to employment and workforce issues in New Hampshire. Our team is monitoring these developments in real time and we’re here to support and assist you as needed. Please do not hesitate to reach out if we can be helpful to you.