Reducing The Workforce: Lay-Offs, Furloughs, COBRA

The government is trying to help you stay in business and retain employees. Consider New Relief loans to Prevent Need for Lay Off – CARES ACT; Families First Corona Virus Response Act (FFCVRA); SBA Loans

To lay someone off is to cease offering the person employment due to no fault of his/her own, because the Company has no need for someone in the position.

A lay-off is a full cessation of employment, with no general expectation of re-hiring.
Upon lay-off, Company has no obligation to pay any wages, leave, or benefits unless otherwise agreed.

A. Legal Requirements

• 1. Letter of Notice
  • Last Date of Employment
  • Date employee will receive last paycheck
  • Last Date of Health Benefits if otherwise not extended.
  • Last Date of Other Employee Benefits.

• 2. Unemployment Insurance Notice
  • Department of Labor: Unemployment Insurance, Record of Employment

• 3. COBRA Notice
  • If employ 20 or more employees, notify your insurer. The health insurer will send the employee the COBRA notice. COBRA requires that eligible employees have option to keep health insurance by paying the entire premium.

Similar to a Lay-Off, however employees are given a hard return to work date. Some benefits may continue. This depends on the terms of policies in place regarding furlough, and otherwise the Employer’s desire to continue any benefits. Continuation of benefits is not guaranteed.

A. Furloughed Employees are Eligible for Unemployment

B. Policy Terms Drive whether Any Benefits Continue During Furlough

C. If Health Insurance terminates, COBRA notice is required if COBRA eligible, otherwise Employees otherwise are eligible for the healthcare marketplace.

D. Employees May Not work at all during furlough or will be considered employment.

A. Legal Requirements

• 1. Letter of Notice
  • Last Date of Employment
  • Date employee will receive last paycheck
  • Last Date of Health Benefits if otherwise not extended.
  • Last Date of Other Employee Benefits.

• 2. Unemployment Insurance Notice
  • Department of Labor: Unemployment Insurance, Record of Employment

• 3. COBRA Notice– If applicable
  • If employ 20 or more employees, notify your insurer. The health insurer will send the employee the COBRA notice. COBRA requires that eligible employees have option to keep health insurance by paying the entire premium.

No. As long as you have a legitimate business based reason for reducing size of workforce, you may do so.

For More Information on COBRA: https://www.dol.gov/general/topic/health-plans/cobra

For More Information on NY Unemployment:
https://labor.ny.gov/formsdocs/ui/employer-forms-publications.shtm