My Office is Closed; I am Out of Work, What Do I Do?
[Disclaimer] This article was written to the best of our knowledge with the latest news released from the Federal government. Some information may change/modify so we will keep the information updated to the best of our ability
On March 17, 2020, the CDC and subsequently the AOA has urged all non-essential eye care providers to close their business and remain home, resulting in loss of income for thousands of optometrists, employed and self-employed.
If optometry is your primary source of income, this has placed a substantial financial burden on you and your family, as you are still faced with recurring bills and possibly even student loan debt. In addition, your optometric team will also feel the financial effects of your office’s closure, forcing them to look into other means of income or unemployment benefits through the next few months.
On March 18, 2020, President Trump signed into law the “Families First CoronaVirus Response Act” which provides 2 weeks (10 days) of Paid Sick Leave and an additional 10 weeks of Family Medical Leave for eligible employees. This applies to employees who are unable to work or “telework” due to being quarantined or caring for a child whose school has closed.
To read more on the “Families First CoronaVirus Response Act” (FFCRA), please read this guide that I put together.
However, after the mandated Paid Sick Leave or FMLA pay has been exhausted or if your employees are not eligible for paid leave - they will need to dip into their accrued PTO, emergency funds or apply for state paid unemployment benefits.
To further alleviate the unemployment crisis, on March 26th, the senate approved a $2 Trillion stimulus package which includes an expansion and increase in the amount of unemployment benefits available to those who are financially affected by COVID-19.
This FAQ guide will help answer the questions you may have in regards to unemployment benefits for you and your employees.
"On March 18, 2020, President Trump signed into law the “Families First CoronaVirus Response Act” which provides 2 weeks (10 days) of Paid Sick Leave and an additional 10 weeks of Family Medical Leave for eligible employees. This applies to employees who are unable to work or “telework” due to being quarantined or caring for a child whose school has closed"
How do I know if I am eligible for unemployment benefits?
Under normal circumstances, only employees who have had reduction in hours or laid off can claim unemployment benefits (UI). However, for employees who are unable to work due to the COVID 19 crisis they will be eligible for the UI if they meet one the following criteria:
- Employer ceases operation
- Employee is quarantined
- Employee contracts COVID -19
- Employee experiences loss of childcare or school closures
On March 12, the Department of Labor issued a statement to clarify that “workers whose hours have been reduced significantly, but are technically still employed, can be eligible for partial unemployment insurance.”
How do I apply for Unemployment benefits income (UI)?
To begin the process of applying for state paid UI, you can find links to your specific state at this site:
Employees should indicate on the claim form that the reason the employee didn’t report for work was “temporarily unemployed due to COVID-19,” and the employees should indicate they are not working full time due to “Lay off due to lack of work (includes reduction in hours).”
Keep in mind that the information on your state’s site likely won’t be updated to reflect the recent stimulus change since the bill has yet to become law.
Do I need to actively seek work?
Under normal circumstances, employees receiving UI must actively seek work. However, for employees who are unemployed by COVID19 - this requirement is waived.
"Employees should indicate on the State UI claim form that the reason the employee didn’t report for work was 'temporarily unemployed due to COVID-19,' and the employees should indicate they are not working full time due to “Lay off due to lack of work (includes reduction in hours).”
Is there a wait time to apply for Unemployment benefits?
The Governor’s Executive Order waives the one-week unpaid waiting period, so you can collect UI for the first week you are out of work. Federal law does not require an employee to quit in order to receive benefits due to the impact of COVID-19. The employee can be “temporarily laid off” and return to the same place of work - and can still receive UI.
How long does it take for me to receive my first benefit check?
The EDD processes and issues payments within a few weeks of receiving a claim, the average time is 3 weeks, however it can be longer due to the substantial amount of claims soon to be processed.
"Federal law does NOT require an employee to quit in order to receive benefits due to the impact of COVID-19. The employee can be 'temporarily laid off' and return to the same place of work - and can still receive UI"
What if I am self-employed? Can I claim unemployment benefits?
If you are self employed and have paid yourself a W2 salary, you will be eligible for unemployment benefits. Under normal circumstances, business owners are not permitted to claim UI, because closure of business is voluntary. However, given the COVID 19 pandemic, business owners are able to claim UI.
In an unprecedented move, the stimulus bill expands UI to gig workers, freelancers and self employed individuals. Yes, that means 1099 optometrists will be able to claim state paid UI as well.
Calculating UI for these individuals will be more complicated as their work hours and pay varies week to week. The method to calculate UI for self employed individuals is unclear and to be determined. Sometimes a record of cash deposits to a bank account may be considered if no other evidence is available.
If I am not working due to COVID-19 and am receiving sick pay or other leave pay from my employer, will I be eligible for unemployment insurance (UI) benefits?
No, individuals receiving sick pay or other leave pay are not eligible for unemployment insurance (UI) benefits.
"In an unprecedented move, the stimulus bill expands UI to gig workers, freelancers and self employed individuals. Yes, that means 1099 optometrists will be able to claim state paid UI as well."
Will my disability insurance policy cover this?
It is important to note that most disability policies will not cover absences of this type. In most plans, an employee must have some sort of physical impairment to be considered disabled. If an employee is quarantined due to a suspected exposure, it is unlikely that absence will be covered under employer disability plans - I do suggest that you check with your insurance vendor to confirm.
What if the place that I work at is open, but I choose not to work due to fear of contracting the virus?
Some employees may not want to physically come into work of fear that their work conditions will put them at risk for exposure to COVID 19. If an employee refuses work, this would be an indication that the employee is voluntarily separating from employment. In this case, employers should be directing employees to use their available accrued paid sick leave and PTO benefits in accordance with their employment agreement.
However, if the employee cannot work due to the need of caring for a dependent or if they experience COVID-19 symptoms and are advised by their PCP to self-quarantine, then they will be eligible for unemployment benefits.
"If an employee refuses work due to fear of exposure, this would be an indication that the employee is voluntarily separating from employment. In this case, employers should be directing employees to use their available accrued paid sick leave and PTO benefits in accordance with their employment agreement"
Do I need to exhaust all vacation, sick leave or personal time off (PTO) prior to claiming unemployment benefits?
Employees do not need to exhaust their sick days or PTO to be eligible for UB. Also, an employer cannot require the use of unused paid sick leave or PTO; only the employee can make that decision.
If a staff member works a few hours answering phones or only coming to the office for emergency care, would they still qualify for Unemployment Insurance (UI) benefits?
Yes, if the employee’s hours and wages have been reduced due to COVID-19, they may also be considered unemployed.
"Employees do NOT need to exhaust their sick days or PTO to be eligible for UB. Also, an employer CANNOT require the use of unused paid sick leave or PTO; only the employee can make that decision"
What is the amount that I am expected to receive?
The amount is determined by your eligibility and earnings. Unemployment is usually calculated as a percentage of weekly earnings, up to a maximum amount.
Please check with your respective state to calculate how much you will be expecting to receive per week.
Based on the recent stimulus bill - In addition to regular state unemployment insurance, individuals (full time or part time employees) will receive an additional $600 per week for up to four months. For some part time employees, this may be more than their current weekly pay!
How long can an employee receive UI?
In the case of COVID-19, unemployed workers will receive 39 weeks of unemployment benefits, which will carry them through to the end of 2020.
How long must an employee have worked before qualifying for UI?
An employee must meet a minimum amount of time at the workplace and base pay to be eligible for UI. This may be state dependent, so please check with your state requirement.
"Based on the recent stimulus bill - In addition to regular state unemployment insurance, individuals (full time or part time employees) will receive an additional $600 per week for up to four months. For some part time employees, this may be more than their current weekly pay!"
Would it be better to lay off my employees now or should I wait for the paid leave and tax credits available through H.R. 6201?
Whether or not an optometrist should or should not lay off employees is an individual business decision. The Families First Coronavirus Response Act (FFCRA) was signed by President Trump on March 18, 2020 and goes into effect April 2. It pays an employee only if they are quarantined or cannot work due to the need to care for a dependent who’s school/child care has closed. If they do not fall into the eligibility requirements - the lack of, or reduction of business due to COVID-19 is not a qualifying event for an employee to be eligible for paid sick time under this Act. These employees must file for unemployment.
For more information on the Families First Coronavirus Response Act, please visit this guide
Will my UI tax rate go up if I or my employees file for UI?
There has not been definitive data on this. Stay tuned.
Closing points:
“People are doing a public service by staying home. This isn’t unemployment. This is either government-mandated confinement or voluntary confinement,” said Rob Johnson, president of the Institute for New Economic Thinking.
“It makes sense for society as a whole.”
Unemployment is a new battlefront for most, if not all, practicing optometrists; especially when they have no control of when they can return to work. For many employers, it can be stressful and overwhelming, as they face the challenges of paying for their staff in addition to their recurring expenses without any income. This expanded UI rescue plan is intended to soften the financial burden for most offices and help get employers back on their feet faster.
On another note, between now and when you return to work, this is the perfect time to put your spare time to use. If you’re a business owner, here are a few ideas to be productive during an office closure (Check out Aaron's Article: COVID-19 Has Closed My Practice, What Should I Do?)
For others, this is a great time to binge on Netflix, such as the new hit series “Love is Blind”, learn a new skill, or better yet, start a 30 day fitness challenge. This will probably be the only time in your life where you get to stay home, do YOU, and have the government pay for your time off. See you at the end of the storm!
"Unemployment is a new battlefront for most, if not all, practicing optometrists; especially when they have no control of when they can return to work. For many employers, it can be stressful and overwhelming, as they face the challenges of paying for their staff in addition to their recurring expenses without any income. This expanded UI rescue plan is intended to soften the financial burden for most offices and help get employers back on their feet faster"
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