On March 18, Ford Motor Company, General Motors, and Fiat Chrysler announced that they are shutting down all U.S. plants. On March 19, Bank of America made the call that the U.S. is already in a recession, and weekly jobless claims jumped by 33 percent. Experts expect the unemployment rate to double.
Michigan, given its reliance on the automotive sector, is likely to be hit hard by the wave of coming layoffs. And in light of Governor Gretchen Whitmer’s executive orders directing schools to suspend classes, businesses, such as restaurants and gyms, to close, and public gatherings to be limited to no more than 50 people, many people in Michigan are already out of work due to the COVID-19 crisis.
If you’re out of work, or expect to be soon, there are steps you can take to soften the blow. Both the Michigan and federal governments have been working furiously to pass legislation and make other accommodations to help workers displaced by the economic upheaval. Below, we summarize some of the key benefits available to workers impacted due to illness, layoffs, or closures related to COVID-19.
State of Michigan Benefits
On March 16, Governor Whitmer issued Executive Order 2020-10, which is in effect until Tuesday, April 14 at 11:59 p.m. Pursuant to the executive order, unemployment benefits are being extended to:
- Workers who have an unanticipated family care responsibility, including those who have childcare responsibilities due to school closures, or those who are forced to care for loved ones who become ill.
- Workers who are sick, quarantined, or immunocompromised and who do not have access to paid family and medical leave or are laid off.
- First responders in the public health community who become ill or are quarantined due to exposure to COVID-19.
In addition, access to benefits for unemployed workers is being extended:
- Benefits will be increased from 20 to 26 weeks.
- The application eligibility period will be increased from 14 to 28 days
- The normal in-person registration and work search requirements will be suspended.
Workers receiving unemployment benefits are not subject to the normal in-person registration and work search requirements, as those were suspended by the executive order.
According to the executive order, the state is also seeking solutions for self-employed workers and independent contractors who traditionally do not have access to unemployment insurance, although no rules related to this demographic have been established yet.
Families First Coronavirus Response Act
On March 18, President Trump signed into law the Families First Coronavirus Response Act (the “Act”). The Act contains many provisions aimed at mitigating the effects of COVID-19 for American workers, including leave provisions that will become effective no later than 15 days after its enactment. Among other things, the Act guarantees free COVID-19 testing, secures paid emergency leave, enhances unemployment insurance, strengthens food security initiatives, and increases federal Medicaid funding to states.
Family and Medical Leave
Under the Act, employees of employers with fewer than 500 employees and government employers, who have been on the job for at least 30 days, will be provided with 12 weeks of paid family and medical leave. This leave applies to employees unable to work (or telework) due to a need to care for a child of an employee if the child’s school or place of care has been closed or if the child care provider is unavailable, due to COVID-19.
The first ten days of the leave may, at the employer’s discretion, be unpaid under Family and Medical Leave Act (“FMLA”). An employee may choose to use any accrued paid time off, including vacation and sick leave, to cover the initial ten-day period. If an employee needs leave beyond the initial ten-day period, and continues to meet the requirements for paid leave under the FMLA, the employee will be paid not less than two-thirds of the employee’s regular rate of pay for the regular hours worked. The Act provides, however, that paid leave shall not exceed $200.00 per day and $10,000.00 in the aggregate.
Under the FMLA, employers are required to restore employees to their same or similar position following leave. This rule is modified for employers with less than 25 employees to the extent that the position held by the employee before taking leave no longer exists due to economic conditions or other changes in the operating conditions that affect employment and are caused by the public health crisis during the period of leave. Nevertheless, the employer must still make reasonable efforts to restore the employee to the same or similar position, and contact the employee if such a position becomes available.
Paid Sick Leave
Under the Act, employers with fewer than 500 employees and government employers are required to provide up to two weeks of paid sick leave to their employees under the following conditions:
- The employee is subject to a federal, state, or local quarantine or isolation order related to COVID-19;
- The employee has been advised by a health care provider to self-quarantine due to concerns related to COVID-19;
- The employee is experiencing COVID-19 symptoms and seeking a medical diagnosis;
- The employee is caring for an individual who is subject to a quarantine or isolation order related to COVID-19, or has been advised by a health care provider to self-quarantine due to concerns related to COVID-19.
- The employee is caring for a son or daughter if the school or place of care for the child has been closed, or childcare provider is unavailable due to COVID-19 precautions .
- The employee is experiencing any other substantially similar condition specified by the Secretary of Health and Human Services.
Employees who go on paid sick leave for reasons (1), (2), or (3) will be paid at their regular rate of pay, capped at $511 per day. Employees who use their leave for reasons (4), (5), or (6) will be paid at two-thirds the employee’s regular rate of pay, capped at $200 per day. All employees of an employer are eligible for paid sick leave, regardless of the length of their service. Employers must provide full-time employees with 80 hours of paid sick leave and, for part-time employees, the number of hours that such part-time employee works, on average, over a two-week period.
Conclusion
Many people throughout Michigan will lose their jobs due to the COVID-19 crisis. Federal and state governments are enhancing benefits for those being impacted. For more information about unemployment benefits in Michigan, the state has additional resources and information available here. U.S. Department of Labor resources are available here.
