These are difficult times for small businesses. I have had a lot of Massachusetts businesses that I represent ask what their options are with their employees, and what are they legally obligated to do. I thought I would share:

  1. Stay open: If you are an “essential business” or if you can operate from home; then stay open.  If you are an essential business and will be staying open; for your own safety and for your employees, institute some policies such as:
    1. Any employee who exhibits any illness should stay home, and/or be sent home. (they can collect income under PMFL)
    2. All client meetings can be done on a conference call, by email, or using video conferencing services such as Zoom, GoToMeeting.
    3. Cancel all social events
    4. Anyone who can work form home, should be allowed.
    5. Perform daily wipe downs of all common contact points (light switches, door knobs, etc.)
  2. Temporary Layoff:  A Layoff is a termination of employment, even if temporary. Any employee that is laid off is entitled to collect unemployment.  This will be a fraction of their total compensation that they receive from you.  Then, once this passes, and you ramp up business again, you can rehire employees.  Here are some considerations:
    1. If any of your workers are independent contractors,  they cannot collect unemployment.
    2. On the day that the layoff goes into effect, you are required to immediately pay your employee for all unpaid work, regardless of when their payday is, and you are required to pay them for any accrued vacation. You are not required to pay the employee for accrued sick time.
    3. Currently, owners can only collect unemployment if they have been collecting a paycheck.
  3. Furlough:  A furlough is a mandatory leave of absence. In Massachusetts, a furlough is treated just like a layoff; however, the Massachusetts attorney general has stated they will not persecute employers if an employee voluntarily chooses a furlough and chooses to keep their vacation time “banked” with the company for use when they come back to work.
  4. Massachusetts Workshare Program: In Massachusetts, it is possible to cut employees hours, up to 60%, and allow them to collect unemployment.

It is important to note to note that an employer is not required to choose just one option; but, can chose some or all of the options. Considerations should include: how much cash reserves you have; how much business you have in the pipeline; amount of paid time off has accrued for your employees.

Remember that an employer is required to follow all employment laws and failure to do so can result in significant fines and possible lawsuits by employees. If you would like more information and legal assistance on navigating your options; please feel free to contact us. Don’t wait until its too late.