COVID-19 (Coronavirus) and Unemployment Insurance

Employers affected by the COVID19 pandemic are considering a variety of options to reduce costs and avoid layoffs. Some key strategies include:

• Temporarily or permanently expanding paid leave: large employers across the U.S. (including Walmart, Apple, McDonalds, Uber, Instacart, and others) are revising their paid leave policies in response to COVID-19. Studies show access to paid leave can reduce employee absenteeism and employee turnover . The Minnesota Department of Health also notes that paid leave may help you avoid a costly, unexpected worker shortage due to widespread illness.
  
  
• Accommodating requests for part-time schedules: consider offering your full-time employees the option to work part-time (while maintaining their ordinary employee benefits). This may be helpful for workers facing a short-term disruption in childcare.
  
  
• Offering unpaid leave: in addition to offering part-time schedules, some businesses are offering employees the option to take unpaid time off (or sabbaticals). Even if a small number of employees are interested, this approach could result in a significant cost savings.
  
  
• Providing early retirement options: A short-term investment in voluntary retirement packages may benefit your employees while helping you cut costs.
  
  
• Thoughtfully implementing furloughs: Temporary furloughs (e.g., cutting one paid day per two-week pay period) may allow you to continue paying wages and benefits while reducing costs. Make sure to talk with your employees about your furlough strategy and adjust as necessary. For example, if you employ a married couple with children, you can help them cover childcare by ensuring they are furloughed on opposite schedules.

Yes. The Shared Work Program is designed to help you reduce costs without losing your valued employees. If your business reduces hours by 50 percent or less, the Shared Work Program can help defray some of your employees’ lost wages.

Maintaining your current workforce will help you avoid the expense of recruiting, hiring, and training new workers. The Shared Work Program will also allow you to resume full operations quickly when business conditions improve.

Read more about the Shared Work Program.

If you have substantially reduced an employee’s hours (below 32 hours per week) or their rate of pay, they may be eligible for unemployment benefits.

Unemployment benefits may be available to some workers who take a voluntary layoff to avoid the layoff of another worker (and meet certain other requirements). See Minnesota Law, $268.088 for the list of requirements.

If you have temporarily laid off an employee, the employee can meet work search requirements by staying in regular contact with you about when work will resume.

It depends on the situation. Workers who are receiving vacation pay, sick pay, or personal time off (PTO) pay equivalent to their normal rate of pay are ineligible for unemployed benefits. If you require an employee to take an unpaid leave of absence, the employee may be eligible for unemployment benefits.

It depends on the situation. We are suggesting that workers who find themselves in this situation apply for unemployment benefits to find out if they are eligible.

We understand your concerns about future UI costs. In this extraordinary time, our first obligation is to do what’s right for our business, workers, families and communities. In the UI program, our primary concern is going to be focused on paying eligible applicants.

Employers are usually responsible for the cost of unemployment benefits paid to their workers. Given the unprecedented situation with COVID-19, Governor Tim Walz issued an executive order to relieve taxpaying employers of benefit charges associated with COVID-19. This means that any unemployment benefits your workers collect as a result of the pandemic will not be used in computing your future UI tax rate.

The Walz-Flanagan administration is working to help businesses access financing that will help them continue operating as conditions get more challenging. This includes working to secure federal disaster loans for businesses through the United States Small Business Administration (SBA).

The Minnesota Legislature is also considering special measures to provide targeted financial assistance to businesses affected by COVID-19.

In addition to these financial resources, your local Small Business Development Center offers free consulting services from local business experts.

Wage detail and UI tax payments for the first quarter 2020 are due on April 30th. We know this is a busy time. We ask that you try to file your quarterly reports and pay your UI taxes on time if at all possible. As we get nearer to the actual deadline, we will announce any administrative changes for those employers who will need to be late.