The Payroll Blog

News, tips, and advice for small business owners

What to Do if Employees Refuse to Return to Work

Posted On
6/4/2020
By
Compliance

Empty office with desks and computers.

Update, 6/9: The Paycheck Protection Program (PPP) Flexibility Act, which was signed into law June 5, 2020, made some significant changes to the PPP loan and loan forgiveness process. Read this blog post to learn more about the Flexibility Act. For additional PPP Loan Forgiveness support, check out the FAQs and forgiveness estimator on our Maximizing Loan Forgiveness hub.

The following is a repost from the Paychex Worx site.

Employers who closed or downsized their businesses because of the COVID-19 pandemic may be anxious to reopen. They may be recalling or rehiring employees furloughed or laid-off. Moreover, many employers have received loans made available under the Paycheck Protection Program (PPP) and want to maximize their ability to seek forgiveness of those loans by restoring employees to their active payrolls.

Employers will need to review their compliance obligations under applicable federal, state and local laws, regulations, and executive orders related to reopening. Employers should also consider establishing written health and safety protocols, which may be required under certain state and/or local laws, before returning workers to the workplace. 

The enhanced unemployment benefit dilemma

Employers may be extending offers to employees currently receiving more in unemployment insurance (UI) benefits than they will be paid when reinstated because of the additional $600 per week made available to them through July 31, 2020 under the CARES Act.

Employers may be left wondering whether they will be able to staff their businesses because employees may reject job offers, preferring to remain on enhanced UI benefits for the time being. Employers who received PPP loans worry that rejections of their job offer may derail their efforts to restore their workforces to pre-furlough levels, and in turn, sidetrack their ability to optimize their loan forgiveness opportunity. Let’s take each of these two issues in turn.

Scenario 1: Employee collects UI benefits despite receiving comparable job offer

Although there are reasons that would enable an employee to reject a job offer and continue to qualify for UI benefits in various states, an individual’s preference for receiving the enhanced UI benefit is not one of them. In order to continue qualifying for UI benefits, an individual must certify on a weekly basis, among other things, that they are available to work and have not received a job offer for “suitable” employment.

Intentionally making false statements in a UI benefit certification may constitute civil or criminal fraud. Consequently, an employee rejecting a job offer must respond truthfully and accurately or face serious consequences. Many states and the federal government have promised to address anticipated fraud cases. 

Scenario 2: Protected reasons an employee who rejects a job offer can be eligible to receive UI benefits

An individual’s mere preference for receiving the enhanced UI benefits is not a protected reason to reject a job offer. The following are examples of reasons an employee may have for rejecting an employer’s job offer and permit the individual to continue to be eligible to receive UI benefits:

Employment Must be Suitable

An employee might reject a job offer and continue qualifying for UI benefits if the job is not “suitable.” What might make a job from which someone was furloughed just a month ago unsuitable today? First, a job might be unsuitable if, among other things, an employer hasn’t taken reasonable steps to promote a safe workplace or let employees know about those steps. Employees have a protected right to work in a safe environment.

Although an employee’s unreasonable fear of contracting COVID-19 in the workplace may not be sufficient grounds for rejecting a job offer and continuing to be eligible for UI benefits, an employee’s reasonable concern for their safety might be. State unemployment agencies will be even more likely to find protected cause if the individual rejecting the offer is within the population at high-risk of becoming seriously ill if they contract COVID-19 and the employer failed to mitigate the risk. Employers should consider developing safety plan before recalling workers that is well-thought out, documented, and communicated to employees before, or along with, the written job offer.

Establish and document a health and safety protocol

Ensure your health and safety plan accounts for any federal, state, or local requirements and/or guidelines, such as those developed by the Occupational Safety and Health Administration (OSHA) and the Centers for Disease Control (CDC). Your plan should be tailored to your specific workplace and industry and provide a means by which to consider accommodations for high-risk employees who need, or request, accommodations on a case-by-case basis. Consider scheduling a virtual employee meeting before job offers are extended to discuss your health and safety plan as well as employee concerns. Guidance on establishing workplace health and safety plans should be considered.

Other protected reasons

Many states have expanded the grounds that may give an individual protected reasons related to the COVID-19 pandemic to reject a job offer and continue receiving UI benefits. For example, some states have issued guidance that if individuals reject job offers because they must care for their child due to COVID-19-related school of childcare closings, that individual may be eligible for continuing benefits.

An employee also might have potential eligibility for protected leave through the Families First Coronavirus Response Act to care for a child whose childcare or school is closed for COVID-19-related reasons.

Reasons for acceptable refusal will vary by state, so employers should check with their state’s UI website.

Make written job offers and document responses

Making job offers in writing and documenting any rejections of those offers has never been more important. Consider including a description of your health and safety plan in the offer letter and the additional steps that you are taking to provide a healthy and safe workplace.

If an employee rejects your job offer because of workplace health and safety concerns, gain an understanding of the employee’s specific concerns and review whether any accommodation is required or could be made that is reasonable and addresses the employee’s concern. Document the rejection or the individual’s failure to report.

Employers should advise the State Employment Agency if an employee rejects a job offer or fails to return to work. If you decide to report an employee’s rejection of a job offer to the State Unemployment Agency for investigation, you will likely need to provide the documented job offer and rejection.

Employers with PPP loans

Employers with PPP loans hoping to restore their workforce to pre-furlough levels are also concerned that rejections of job offers will reduce their loan forgiveness opportunity. The SBA and U.S. Treasury Department recently indicated, however, that rejections of an employer’s good-faith job offer (and the impact on the employer’s workforce restoration effort) will not result in a reduction of the employer’s loan forgiveness opportunity; but cautioned that employers must be able to provide documentation of the job offer and rejection. Employers should make sure to retain copies of the written job offers and documentation of rejections of those offers. 

Looking forward

As you get your business back to full strength, you might discover additional challenges or have more questions. SurePayroll provides resources, tools, and FAQs to help your efforts, and we recommend you consult with your financial advisor and employment lawyer as you prepare to re-open.

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This website contains articles posted for informational and educational value. SurePayroll is not responsible for information contained within any of these materials. Any opinions expressed within materials are not necessarily the opinion of, or supported by, SurePayroll. The information in these materials should not be considered legal or accounting advice, and it should not substitute for legal, accounting, and other professional advice where the facts and circumstances warrant. If you require legal or accounting advice or need other professional assistance, you should always consult your licensed attorney, accountant or other tax professional to discuss your particular facts, circumstances and business needs.