I filed for unemployment. I never thought I’d say those words again. The last time I did was during the mortgage industry collapse more than a decade ago, which put millions of us out of work. Those were desperate times, and I thought of unemployment as a resource to tide me over.
We are facing desperate times again. Record numbers of people have applied for unemployment in recent weeks, and many more wonder whether they can or should apply now. They come to me with their questions because I’m the HR guru. I’m supposed to know things.
Well, this is one topic that neither I nor most other HR pros know as much about as we’d like to. That’s because the federal and state orders that dictate the award amounts, eligibility, and availability change from day to day. In some cases—for the self-employed and small business owners, for example—the actual guidelines don’t exist yet. My only consolation, after speaking to others in the field, is at least I’m not the only one in the dark.
So let’s work through this together.
I applied for unemployment for two reasons. One, like many small business owners, my revenue is down to a trickle, and I want to make sure I can feed my family and keep my business afloat. Two, when helping several of my clients with temporary layoffs, I found that their employees not only had general questions about eligibility and so forth but had very specific questions about the unemployment website itself. It had been more than a decade since I last applied, and I needed some hands-on experience.
What I found was that the system hadn’t changed much in more than a decade and hadn’t been well-adapted to the requirements of the pandemic economy. There were only two major changes I noticed. One was a new question: Was my unemployment claim because of COVID-19? And the other was the addition of two new choices to the question about employment status: independent contractor and self-employed.
Many of the other questions didn’t really fit the current situation. How do applicants indicate this is a temporary layoff? How do they answer the question about the length of time they’re likely to be out? What if they get called back part time because the business is deemed essential? When will benefits begin and will they have to forfeit the award if the benefits don’t arrive until after they can go back to work if that’s as early as May 1? Can I apply if I own a business?
No wonder everyone was confused. I answered the questions as best I could on my application, and hoped the response would give me more information about my particular circumstances. (Update: it did not.)
One answer I do know—which is why I applied in the first place—is that independent contractors, freelancers, and business owners (regardless of whether they are sole proprietors or corporations) are now eligible for unemployment benefits.
But what does that mean? My business owner clients who filed came up with a whole slew of other questions. NOTHING in the system seemed to fit their circumstances. What, for instance, did “self-employed” mean exactly? Yes, they pay themselves salary but are their draws or revenue considered commission? Do they get money as a corporate officer if they file a schedule K-1? There’s no real guidance on these issues. I’m sure my clients got tired of me saying, “I’m not sure on that one, but here’s how it used to be.”
In the past week, many of the questions turned to the “extra $600” in weekly unemployment benefits mandated by the Federal government—not only the details of how it will be awarded, but this hypothetical: If I make more on unemployment, do I have to go back to work if the company recalls me?
After scouring my HR websites, I haven’t really found good answers: how the $600 will be awarded, whether the award will be determined on a sliding scale based on wages, whether it is a one-time grant or a regular addition to the unemployment payment, how long it will last. What the employees are really asking is, is it a good idea to jeopardize their current position by leaving for something that isn’t clarified yet?
My understanding is that that $600 is to help us get through the crisis, not support us for the rest of the year. But no one knows for sure. By the time you read this, we may have the details. Stay tuned.
To the business owners who are angry with their employees at the seeming disloyalty of saying these things out loud, I say let’s give them a break. They’re trying to protect themselves and their families the same way you are—the same way we all are. You have built a relationship with them, and they trust you enough to share their feelings and fears. Take the opportunity to remind your employees how you value them, how you respect them, how you need their help to recalibrate the business in these crazy times and how excited you are excited to bring them back to work. Without going into too much detail, share your vision with your employees and how they fit in. But if they decide to go another way to protect their family, don’t hold it against them. And if they are truly good employees, don’t rule out bringing them back once this is all over.
In fact, if you want to earn their loyalty, be a resource for them. During my research I found an informative article by SHRM which can give you pointers on how to talk with employees about their unemployment status. How to Help Employees Navigate Unemployment During COVID-19.
My other piece of advice is to remember that this situation—COVID-19, lockdown, total economic collapse, take your pick—is unprecedented. No other pandemic in the last 100 years has approached this one in its threat to individuals (there being no vaccine and no viable treatment) and to the world economy. No one has navigated this before, and we are all flying by the seat of our pants. Be honest about that. A true leader isn’t scared to say, “I don’t know, but let me help you find out.” And leadership doesn’t come only with a title or position. It’s time for everyone to step up to be a leader, both in their personal and professional lives, whether they have a title or not.
As your HR professional, I am here to help you and your employees get through this crazy, crazy time. I will continue to monitor the web, read article after article, learn as much as I can, ask the hard questions, and bug the powers-that-be to get the answers you need. We are in this together.