Question:

Our business is suffering due to COVID-19. We can’t afford to pay people and might have to close. What do we do?

Answer:

This is understandably a very difficult situation for employers and their employees.

There are three basic options when it comes to keeping employees or letting them go: furlough (temporary reduction in hours of work or weeks of work); temporary layoffs (layoff with the intention of rehire, generally within six months); or permanent layoffs (layoff with no anticipated rehire date). In all situations, it’s best to be very clear in written communications about your decision and work with an attorney.

Employees who are furloughed can generally still receive unemployment insurance benefits, so employers shouldn’t feel like they have to terminate everyone just so they can receive unemployment insurance.