Can Your Employees Decline Re-employment in Favor of Unemployment Benefits?

Posted By Mike Meyer, Friday, April 24, 2020


By Renee E. Coover, JD, ByrdAdatto

As medical spas start planning their business re-launch and bringing back employees, many are struggling to answer the novel HR and employment-related questions born out of this pandemic. There is no doubt that COVID-19 has changed, and will continue to change, the way medical spas operate, and one challenge that many will face is what happens if employees don't want to return to work because they are collecting more in unemployment benefits than they previously made while working full-time. This question is nuanced and requires a state-by-state analysis of the current unemployment laws and changes to these laws borne out of the pandemic.

Pursuant to the Coronavirus Aid, Relief and Economic Security (CARES) Act, several federal unemployment assistance programs that are making it easier for workers to collect unemployment during the COVID-19 pandemic are being administered through the states. In fact, for the first time ever, under the Pandemic Unemployment Assistance (PUA) program, independent contractors, gig workers (such as those who drive for Uber or Lyft) and the self-employed can be eligible for unemployment benefits if they meet qualifying conditions. The most talked-about program is called the Federal Pandemic Unemployment Compensation (FPUC), which provides a $600-per-week benefit to all eligible workers in addition to other unemployment coverage through July 31, 2020. In order to qualify for this extra money, the individual must be eligible to receive a full or partial unemployment benefit for that week, which can be as little at $1; the only individuals not eligible are those workers currently receiving paid sick leave or other paid leave, or able to work remotely for pay in any given week.

As a result of this sudden and unexpected windfall of additional unemployment compensation, some employees actually are collecting more in unemployment benefits than they would otherwise. And because of this, they don't have a desire to come back to work, especially in the uncertain environment of potentially contracting the virus by going to work.

But can employees refuse an offer of re-employment in favor of collecting a weekly employment check? Well, as always, it depends. Though the FPUC and the PUA are federally funded programs, they are administered through the existing state-run systems. And each state has different rules when it comes to unemployment eligibility. In Texas, for example, an employee is not required to accept less than what the employee was making as a full-time employee until the eighth week of unemployment, at which point the employee must accept any offer of employment at 75% of the employee's prior wage.

Illinois is even stricter when it comes to eligibility for collecting unemployment. The Illinois Department of Employment Security (IDES) has cautioned that an employee who quits work without good cause to obtain additional benefits under the regular state unemployment program or the CARES Act emergency programs is engaging in fraud and could be subjected to criminal penalties. Similarly, the IDES states that individuals cannot refuse to go back to work to keep collecting FPUC because they must certify every two weeks that they are able and available to work. Thus, if employees refuse to go back to work, they are no longer eligible for unemployment benefits, including FPUC.

Additionally, the IDES expects employers to report individuals for fraud if they quit their jobs or do not want to return to work because they receive more money from unemployment benefits.

This issue is bound to become even more prevalent as the number of businesses re-opening their doors and bringing back employees increases over the coming weeks and months. Every state looks at this issue differently, and it is important to check with your state's unemployment eligibility rules and regulations to determine your next steps when employees refuse to return to work.

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Renee E. Coover, JD, is an associate with ByrdAdatto, a law firm focusing on business, healthcare, and aesthetics. She has a unique background, blending litigation with healthcare law. A former litigator in high-stakes employment cases, Renee has extensive experience with counseling and representing businesses in employment matters, policies, and contract disputes, and defending business owners in state and federal trials. She has also served as General Counsel for the American Med Spa Association, advising health care professionals on regulatory and legal issues governing the medical spa industry.

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