Are COVID-19 Jobs Lost/Layoffs Temporary?

Most Americans who lost jobs describe layoffs as temporary, but research indicates otherwise.

By Rahel Solomon, and Jodi Gralnick contributed to this report.

While 78% of unemployed Americans described themselves as temporarily laid off in the government’s April jobs report, new research suggests for many people that may not be the case. The University of Chicago’s Becker Friedman Institute predicts that 42%, or 11.6 million, of all jobs lost through April 25 due to the coronavirus will become permanent. In a paper study this month, it used a combination of historical experience and survey data for the findings.

“The current crisis may be so severe that the fraction of temporary layoffs that become permanent ends up being much larger than the historical evidence would suggest,” co-author Jose Maria Barrero cautioned in an email.

The Labor Department’s April employment report showed a historic loss of 20.5 million nonfarm payrolls and the nation’s unemployment rate soaring to 14.7%. Both numbers easily smashed post-World War II era records. In a small consolation, they weren’t quite as bad as economists had expected. According to the study, the jobs most at risk of being eliminated permanently include those lost due to demand shifts and those at companies that don’t survive the coronavirus-related closures.

“I would anticipate many bars and sit-down restaurants will not survive the pandemic as people avoid gathering in large groups. So many waiting and bar-tending jobs are likely to disappear permanently,” said Barrero, an economist. “This is likely more of an issue for small, independent restaurants and bars than for large national chains.”

In fact, many restaurants may have already closed their doors for good. According to a National Restaurant Association survey in late March, 3% of restaurant owners or operators reported closing permanently and 11% had anticipated doing the same within a month, meaning as many as 100,000 restaurants could close permanently due to coronavirus. There are more than 1 million restaurant locations in the U.S., according to the association. The hospitality industry is also at increased risk of permanent job losses.

MGM Resorts recently informed employees that while it had hoped to reopen this summer it appeared less likely. In a note shared with CNBC, acting CEO Bill Hornbuckle expressed uncertainty about when workers would be called back. “When we first furloughed our employees, we hoped the spread of the virus could be contained or that an effective treatment would emerge quickly.

We hoped that a significant portion of our operations would bounce back by the summer,” he said. “Based on the current situation, we now believe that some of our colleagues may not return to work this year. And, given the continued uncertainty facing our industry, we simply don’t know just how many employees will return to work within the coming months.”

The Becker Friedman study found that for every 10 layoffs caused by pandemic, three jobs were created in the near term. Companies such as Amazon, Walmart, Lowe’s, Dollar General, Papa John’s and Domino’s have announced plans to hire more workers as stay-at-home orders shift consumer behavior.

Barrero suggested this “reallocation shock” may result in “a major transformation of the economy, with many types of jobs and industries effectively disappearing and others expanding in a major way.”

Working From Home is Great If You Already Have a Job.

By Myles Udland, reporter and co-anchor of The Final Round.

In recessions, lots of bad things happen to the labor market. Unemployment rises sharply. Wage gains level off. And the number of open jobs plummets. All of which leads to dimmer prospects for those both employed and unemployed.

After a sluggish recovery for the labor market during the early part of the 2010s, data showing the number of workers quitting jobs on the rise, the number of job openings at record highs, and wages rising at the fastest rate in almost a decade were all signs that dynamism had returned to the labor market.

And while we’re still in the early stages of appreciating just how disruptive the current shock is to the labor market, data from Indeed suggests the biggest trend in workforce management is a negative for the overall health of a region’s labor market. And that trend, of course, is working from home.

“This crisis has hit different places unevenly,” writes Jed Kolko, chief economist at the Indeed Hiring Lab, “In some metros, job postings plummeted as much as 60%. Even seven weeks into a modest rebound, job postings in many large metros remain 40% below last year’s trend. Most surprisingly, metros like Seattle, San Francisco, and New York, where more people can do their jobs from home, have seen some of the biggest drops in job postings.”

Kolko notes that, as expected, the biggest decline in job postings has been from the hospitality & tourism sector as well as the arts and child care. But the decline in these hardest-hit sectors is larger in cities where a bigger share of the population can work from home. Cities like New York, San Francisco, Seattle, and Boston that are more focused in the tech and finance sectors that have transitioned to working from home are seeing job postings for these seemingly unrelated sectors rise slower than in cities where less of the workforce can work remotely.

But of course, all parts of a city’s labor market are connected. And when a sizable number remains hunkered down in their homes or apartments, everything tangential to that typical activity slows down, too. Since May 1, for instance, job postings in Seattle and San Francisco have declined while openings in New York are flat. In Miami and Denver, in contrast, are up 11% and 7%, respectively, during that period.

“Retail and personal-services sectors have suffered more in places where a larger share of local customers have been able to work from home,” Kolko writes. “This is consistent with recent evidence that richer people’s spending has dropped more, hurting businesses more in richer neighborhoods than in poorer neighborhoods.”

Kolko adds that “inequality in tech hubs, finance centers, and other work-from-home metros — which was already high, to begin with — maybe worsening during this pandemic...in these metros, opportunities may be drying up more for people who were already struggling.”

And so while on Thursday we noted some politicians had echoed Fed Chair Jerome Powell’s sentiment when it comes to the virus determining the path of the economic recovery, in Kolko’s comments we see another key part of Powell’s crisis message to the public and to lawmakers — this crisis has hit hardest those least able to weather these effects.

Economist Claudia Sahm highlighted on Thursday that the lowest quartile of earners was made whole by stimulus from the CARES Act and have increased their spending during the early days of this crisis. A sign that sending money to consumers and struggling workers can help keep this consumer-driven economy afloat.

As we argued earlier this week if the spread of the virus continues to accelerate it will hamper the recovery regardless of what rules are put in place by lawmakers. If consumers do not feel safe leaving their homes they will stay inside. Indeed’s data shows clearly how opportunities in the labor market remain elusive for so many, and may perhaps even be dwindling the longer this recession drags on and the longer the virus continues its uncontrolled spread.

And so it is imperative Congress not short-circuit this recovery by thinking this first round of stimulus will be enough to support the economy. Because we’re only just beginning to appreciate how much economic damage has been wrought by the virus.

Frequently Asked Questions for Employees: COVID-19 Unemployment and work-related issues.

Indiana Unemployment Insurance: Updated March 26, 2020

Questions and answers on how Employees can File unemployment insurance claims according to Executive Order 20-05 and Executive Order 20-12.

Q1. How do I file for unemployment insurance (UI) benefits?

A1. Online, using a computer or smartphone. Go to www.Unemployment.IN.gov to file, and to see Frequently Asked Questions, the Claimant Handbook, and video tutorials.

Q2. What information do I need when I apply for unemployment insurance (UI) benefits online?

A2. You will need the following information to file:

• A valid email account – your email address will become your Username;

• Your personal information, including your: o Indiana Driver’s license or Indiana ID card;
  - Address; o Social security number (SSN);
  - Date of birth; and o Phone number.

• Information about your last employer, including:
  -Employer’s name/company name; o Employer’s mailing address;
  -Employer’s phone number.

• Information about your employment, including your:
  -Dates of employment; and o The reason you are unemployed.

• Your bank routing number and account number if you chose direct deposit as your payment option (NOTE: a debit card - Key2Benefits prepaid MasterCard® - is also available). AM I ELIGIBLE?

Q3. If my employer temporarily shuts down or lays me off because of COVID-19, will I be eligible for unemployment insurance (UI) benefits?

A3. Yes, if an employer must lay off employees due to COVID-19, the employees will be eligible for unemployment insurance (UI) benefits if they have earned enough wages to set up a claim (see Q10 below) and meet the weekly eligibility criteria. Employees must stay in contact with your employer and be available to work when called back by your employer.

Q4. If I am in quarantine based on a directive from my medical professional or my employer due to COVID-19, will I be eligible for unemployment insurance (UI) benefits?

A4. Yes, if you are not receiving sick pay or other leave pay from your employer, meet the minimum amount of wages, and the reason you are out-of-work is because of the medical quarantine, you will be eligible under Governor Holcomb’s Executive Order during this public health emergency.

Q5. If I cannot continue to work because I am caring for my child (or children) while their school or daycare is closed due to COVID-19, am I still eligible for benefits?

A5. Yes, if you are otherwise eligible, are not receiving sick pay or other leave pay from your employer, meet the minimum amount of wages, and the reason you are out-of-work is because of the school or daycare closure, you will be eligible under Governor Holcomb’s Executive Order during this public health emergency.

Q6. If I am compensated partially by tips, such as in the restaurant industry, will I be eligible for unemployment insurance (UI) benefits?

A6. If you are laid-off or have lost work related to COVID-19 and you meet the minimum amount of wages, then yes, you will be eligible. However, whether you meet the minimum amount of wages will probably depend upon how your employer reported your earnings to DWD in their quarterly reports. If your employer reported tips as part of your wages, then those tips are included in your base period wages.

If your employer did not report tips as part of your wages, it is possible, you will not meet the minimum. If you receive a DWD determination that you do not meet the minimum amount, you can appeal that determination and request that DWD includes the records of your tipped wages. If you have sufficient documentation, then your base period wages can be recalculated. Documents that will be considered include: pay stubs, W2, or any other type of documentation of payment from your employer. Sometimes a record of cash deposits to a bank account may be considered if no other evidence is available.

 Q7. If my hours are reduced but I am still employed, can I apply?

A7. Yes, you may be eligible for benefits, but part-time employment during the week claimed will reduce the number of benefits paid for that week. To find out if you are eligible, start your application for benefits as soon as you know that your hours are being reduced. If you do work while receiving benefits, you must report any money you earned on the voucher for the week you worked (not the week you ultimately get paid for the work).

Failure to report the money you earned is fraud and can result in denial of benefits, collections actions, and criminal prosecution.

Q8. If I decide to remain at home because of COVID-19 with no directive from a medical professional or from my employer to do so, will I be eligible for unemployment insurance (UI) benefits?

A8. In most cases, no. However, the facts of each circumstance are important. You can file and DWD will evaluate your claim.

Q9. If I am not working due to COVID-19 and am receiving sick pay or other leave pay from my employer, will I be eligible for unemployment insurance (UI) benefits?

A9. No, individuals receiving sick pay or other leave pay are not eligible for unemployment insurance (UI) benefits. However, the facts of each circumstance are important. You can file and DWD will evaluate your claim.

Q10. What is the amount of wages I must earn to meet the minimum eligibility for unemployment insurance (UI) benefits?

A10. If you have not earned enough wages to meet the minimum eligibility, then you will not be eligible. This is determined by how much money you earned while working during your base period. Your base period includes the first four of the last five completed calendar quarters before the week you file an initial claim application for UI benefits.

• If you file your initial claim application for UI between January 5, 2020, and April 4, 2020, your base period will be Q4 2018, Q1 2019, Q2 2019, and Q3 2019, which covers the dates October 1, 2018, through September 30, 2019.

• If you file your initial claim application for UI benefits between April 5, 2020, and July 4, 2020, your base period will be Q1 2019, Q2 2019, Q3 2019, and Q4 2019, which covers the dates from January 1, 2019, through December 31, 2019. The wages you earned during your base period are used to determine if you qualify for benefits and also to calculate how much you can be paid.

The last quarter you worked is called the lag quarter, and no wages from that quarter count in your base period. To meet the minimum eligibility for UI, your total wages during your base period must be equal to at least one and one-half (1.5) multiplied by your wages in the highest quarter of your base period. Your base period wages must also total at least $4,200, with at least $2,500 of those wages earned in the last six (6) months of the base period.

For an example of this calculation, review pages 7-8 of the Claimant Handbook, found at https://www.in.gov/dwd/files/Claimant_Handbook.pdf. We understand this is a complicated calculation, so the easiest way to find out if you meet the minimum eligibility is to file your claim immediately upon being laid-off and we will complete a wage calculation as part of your application process and notify you whether you met the minimum amount.

Q11. If I have read all of the frequently asked questions and am still unsure if I would be eligible, what should I do?

A11. Please file your claim. As long as you read the questions carefully and answer honestly, there is no penalty for filing. Once you have completed your claim, DWD will be able to determine your eligibility. WHAT HAPPENS AFTER I FILE?

Q12. Do I need to file anything else after the initial claim application for unemployment insurance (UI) benefits?

A12. Yes. You must file a voucher EACH WEEK through the Uplink online filing system and comply with the terms of the weekly vouchers to continue to be eligible for and receive benefits each week. You must submit your weekly voucher during the week following your initial application and then every week after for as long as you remain unemployed. You must file the weekly vouchers even if you have not received a determination regarding eligibility for unemployment insurance (UI) benefits.

Q13. Is the one week waiting period for unemployment insurance benefits being waived?

A13. Yes. The one-week waiting period for payment of unemployment insurance (UI) was waived by the Governor’s Executive Order. The waiver is retroactive to the week of March 8, 2020. This means that benefits will be paid for the first week you are eligible. This week of benefits may not appear immediately in your account, but DWD is working diligently to get this week added on each eligible claim.

Q14. When will I receive my first unemployment insurance (UI) payment?

A14. You should receive your first payment within three weeks if there are no issues with your initial claim application for benefits.

Q15. Could unemployment be offered indefinitely through this crisis?

A15. Right now, unemployment benefits are available to eligible claimants for up to 26 weeks.

Q16. Am I still required to search for work or conduct reemployment activities during the pandemic?

A16. No, during this emergency, the requirement that claimants actively search for work each week that they receive benefits has been waived. However, claimants still must be “able and available for work.”

OTHER QUESTIONS

Q17. I have an Uplink Claimant Self-Service account but I cannot log-in to file my claim or voucher because I forgot my username or password. What should I do?

A17. Visit the Uplink Claimant Self-Service home page and choose “Forgot Username” or “Forgot Password” to reset it yourself. You will be prompted to enter your SSN, date of birth, and other information to confirm your identity. You will then be able to create a new username or password.

If you need an additional user name or password assistance, please email us at UsernameReset@dwd.in.gov.

Include your full name, the last four digits of your SSN, your current mailing address, and a phone number where you can be reached. Please be sure to let us know if you need username assistance or password assistance or both.

We will get back with you as soon as possible. Please do not call the call center to address this issue; you will get a faster result by sending the email to UsernameReset@dwd.in.gov.

Q18. If my employer continues to provide health insurance, will it impact my benefits?

A18. No.

Q19. If I received a letter to attend an in-person Reemployment Services & Eligibility Assessment (RESEA) program session at my local WorkOne for the weeks of March 16 or March 23, 2020, do I have to attend?

A19. No. The previously scheduled in-person meetings for the weeks of March 16, 2020, and March 23, 2020, are suspended. UI Claimants who received a letter to attend should receive communication from their local WorkOne that those meetings are suspended. If you have questions regarding attendance, please contact your local WorkOne.

Q20. Will DWD schedule future in-person Reemployment Services & Eligibility Assessment (RESEA) program sessions at WorkOne centers?

A20. DWD will not be scheduling new RESEA in-person meetings until further notice but will be working to implement virtual services. UI Claimants who are required to participate in virtual services will be contacted.

For more information, visit Indiana Unemployment at the
Indiana Department of Workforce Development: www.unemployment.in.gov

For more information, visit Indiana Unemployment at the Indiana Department of Workforce Development website: www.unemployment.in.gov

Frequently Asked Questions for Employers: COVID-19 Unemployment and work-related issues

Indiana Unemployment Insurance: Updated March 26, 2020

Q1. If I lay people off due to COVID-19, will it affect my Merit rate/tax rate next year?

A1. Layoffs due to COVID-19 will not be charged to contributory employers but will be mutualized to the entire contributory employer pool. More information regarding this will be sent to employers soon. Layoffs by reimbursable employers will be charged to the employer dollar-for-dollar, in the same manner, they have always been charged.

Q2. Is DWD going to waive penalties and interest for late filing of Quarterly Wage reports and contribution payments first quarter 2020?

A2. Yes. DWD will waive penalties and interest for 31 days. Reports and payments made on or before 05/31/2020 will not be assessed any penalty or interest.

Q3. If I lay-off workers and pay their healthcare insurance coverage through COBRA, how do that impact unemployment insurance (UI) benefits?

A3. If you pay for your employees’ COBRA coverage, this is considered deductible income and must be reported to DWD and could impact the amount of UI benefits a claimant is eligible to receive.

Q4. If I reduce my employees’ hours but they are still employed, are they still eligible for UI benefits?

A4. They may be eligible for benefits, but part-time employment during the week claimed will reduce the number of benefits paid for that week. If employees do work while receiving benefits, those employees must report any money earned on the voucher for the week they worked (not the week they ultimately get paid for the work). Failure to report money they earned is fraud and can result in denial of benefits, collections actions, and criminal prosecution.

Q5. If I pay my employees a bonus during the period of separation, will they be eligible for UI benefits?

A5. Maybe. If you make payments to your employees while they are collecting UI, they may have to declare the payment as deductible income. Sick pay, vacation pay, severance pay, payment in lieu of notice, and holiday pay are all deductible income for the claimant. Bonuses are wages for tax purposes, but they are not deductible income for the claimant, thus they do not impact the employee’s UI benefits.

Q6. If my employees are independent contractors, do they get benefits?

A6. No. Independent contractors are not engaged in covered employment for the purposes of UI, so benefits would not be available. If Disaster Unemployment Assistance (DUA) or a similar federal program is enacted, then an independent contractor may qualify.

Q7. If I am a church or church daycare, will my workers be eligible for UI benefits?

A7. No, employees of churches and church daycares are not engaged in covered employment, for UI, so benefits would not be available. If Disaster Unemployment Assistance (DUA) or a similar federal program is enacted, then these individuals may qualify.

Q8. Is the one-week waiting period for UI benefits being waived?

A8. Yes. The one-week waiting period for payment of UI was waived by the Governor’s Executive Order on March 26, 2020. The waiver is retroactive to the week of March 8, 2020. This means that benefits will be paid for the first week the individual is eligible. This week of benefits may not appear immediately in the claimant’s account, but DWD is working diligently to get this week added on each eligible claim.

Q9. Can I receive and respond to UI claims electronically?

A9. Yes. For additional information about the DWD SIDES E-Response program, go to https://www.in.gov/dwd/sides.htm.

Q10. How can an employer file an appeal if they do not have access to a fax machine?

A10. If you do have access to a fax machine, you may file an appeal by emailing your appeal to AppealsDepartment@dwd.in.gov or by mailing your appeal to the Indiana Department of Workforce Development 10 North Senate Ave. Attn: Appeals Department Indianapolis, IN 46204

Q11. How do I know if I am an essential business?

A11. The Governor has set up a call center to address employer questions on essential businesses.

This call center is for business and industry questions only: 877-820-0890 or covidresponse@iedc.in.gov

For more information on filing your appeal, go to the Indiana https://www.in.gov/dwd/2356.htm

Employee Rights

Family's First Coronavirus Response Act.

Know the facts about paid sick leave and expanded family and medical leave under the Family's First Coronavirus Response Act.

The Families First Coronavirus Response Act (FFCRA or Act) requires certain employers to provide their employees with paid sick leave and expanded family and medical leave for specified reasons related to COVID-19. These provisions will apply from April 1, 2020, through December 31, 2020.

► PAID LEAVE ENTITLEMENTS
Generally, employers covered under the Act must provide employees: Up to two weeks (80 hours, or a part-time employee’s two-week equivalent) of paid sick leave based on the higher of their regular rate of pay, or the applicable state or federal minimum wage, paid at:

• 100% for qualifying reasons #1-3 below, up to $511 daily and $5,110 total

• 2/3 for qualifying reasons #4 and 6 below, up to $200 daily and $2,000 total

• Up to 10 weeks more of paid sick leave and expanded family and medical leave paid at 2/3 for qualifying reason #5 below for up to $200 daily and $12,000 total

A part-time employee is eligible for leave for the number of hours that the employee is normally scheduled to work over that period.

► ELIGIBLE EMPLOYEES
In general, employees of private-sector employers with fewer than 500 employees, and certain public sector employers, are eligible for up to two weeks of fully or partially paid sick leave for COVID-19 related reasons (see below). Employees who have been employed for at least 30 days before their leave request may be eligible for up to an additional 10 weeks of partially paid expanded family and medical leave for reason #5 below.

► QUALIFYING REASONS FOR LEAVE RELATED TO COVID-19
An employee is entitled to take leave related to COVID-19 if the employee is unable to work, including unable to telework, because of the employee:

1. is subject to a Federal, State, or local quarantine or isolation order related to COVID-19

2. has been advised by a health care provider to self-quarantine related to COVID-19

3. is experiencing COVID-19 symptoms and is seeking a medical diagnosis

4. is caring for an individual subject to an order described in (1) or self-quarantine as described in (2)

5. is caring for his or her child whose school or place of care is closed (or child care provider is unavailable) due to COVID-19 related reasons  

6. is experiencing any other substantially-similar condition specified by the U.S. Department of Health and Human Services

► ENFORCEMENT
The U.S. Department of Labor’s Wage and Hour Division (WHD) has the authority to investigate and enforce compliance with the FFCRA. Employers may not discharge, discipline, or otherwise discriminate against any employee who lawfully takes paid sick leave or expanded family and medical leave under the FFCRA, files a complaint or institutes a proceeding under or related to this Act. Employers in violation of the provisions of the FFCRA will be subject to penalties and enforcement by WHD.

For additional information or to file a complaint:
1.866.487.9243 TTY: 1.877.889.5627
dol.gov/agencies/whd