Unemployment Insurance Benefits and Returning to Work: Guide for Employers

In normal times, the intent of the unemployment insurance program is to assist people during periods of unemployment when suitable work is not available.

But, during the current COVID-19 pandemic, the U.S. Department of Labor encourages flexibility to effectively comply with government social distancing recommendations and to mitigate the spread of the virus. In response, the Department of Unemployment Assistance enacted emergency regulations, that, among other things, altered the definition of suitable work. The regulations, which are effective from March 16 to June 14, 2020, state at 403 CMR 22.05:

"In determining whether work is suitable, the department will consider whether a claimant has a condition that prevents the claimant from performing the essential functions of the job without substantial risk to the claimant’s health and safety. For purposes of this section, “condition” means a request from an employer, a medical professional, a local health official, or any civil authority that the claimant or a member of the claimant’s immediate family or household member be isolated or quarantined as a consequence of COVID-19, even if the claimant or the claimant’s immediate family or household member has not been actually diagnosed with COVID-19."

However, if suitable work is available, the claimant has an obligation to properly apply for or accept offered work. Indeed, recent guidelines promulgated by the United States Department of Labor provide that refusing suitable work will likely result in a loss of unemployment benefits. A claimant may not refuse work because unemployment benefits are higher than the amount the claimant would earn from employment.

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Frequently Asked Questions

If employees have been offered hours at their workplaces but refuse to return to work due to COVID-19, can they be denied unemployment benefits?

Employees who can work remotely for their current employer and refuse to do so, or who quit work solely to collect unemployment benefits, may be denied benefits. But employees with a reasonable justification for refusing to return to work remain eligible for benefits. Determining what is “reasonable” is a fact-specific inquiry .

The employee’s own health situation is an important consideration, as are the work conditions and the job the employer offers, including whether employees work with or near other employees or members of the public.

If an individual’s work requires them to be physically present in the workplace, the employer may lawfully terminate individuals who refuse to return to work. 

I temporarily laid off my employees and they’ve been collecting benefits. When the public health emergency is over, I plan to call them back. If they refuse work when I offer it to them can they keep collecting their unemployment benefits?

It depends on the reason for their refusal. Employees who refuse to return to work because they would prefer to continue collecting benefits or because their current weekly benefit is higher than their regular wages are not eligible for unemployment benefits. You may have employees, however, who will reasonably refuse to return to work due to an underlying medical condition, other risk factor, or for another COVID-19-related reason as outlined above. Those employees would be permitted to continue collecting unemployment benefits.

My business has been deemed “essential” and has remained open during the crisis. If my employees refuse to work can they collect unemployment benefits?

It depends. Some of them will be eligible for benefits, if their reason for refusing to work is reasonable as described above.

I’m the general manager of a restaurant. When we reopen I plan to offer all my waitstaff their jobs back. Some of them tell me that with the $600 per week under the CARES Act they now get more in benefits than they earned when they worked here. If they refuse to come back when I offer them their jobs, will they keep collecting benefits?

They will not be eligible for unemployment benefits if they refuse to work because they are currently receiving a generous weekly benefit. Refusing work because you would rather collect more money in unemployment benefits is not reasonable in any circumstances and is considered fraud.

To report suspected fraud, you can email: UIFraud@detma.org.

What happens to my employees’ claims when they return to full employment?

When your employees return to full-time work there is no need to contact the Department of Unemployment Assistance. Any returning full-time employee should simply stop filing the weekly certification, and the claim will automatically be closed by the system.

If employees later become unemployed or their hours are reduced, they will need to file for unemployment online.

What happens to my employees’ claims if they return to part-time employment.

If employees return to part-time work, depending on the number of hours worked and gross earnings during a week, they may still be eligible for partial unemployment benefits. If they return to part-time work, they may continue filing weekly claims. The system will adjust their weekly unemployment benefit payment based on the gross wages reported. Failure to correctly report work and earnings may result in overpayments and  possibly the imposition of a penalty. Remember, once work returns to full-time, or your employee begins to consistently earn over their weekly benefit amount, they are no longer eligible for benefits and can simply stop filing the weekly certification. 

What about the $600 Federal Pandemic Unemployment Compensation (FPUC) stimulus payment?

Until the week ending July 25, 2020, for any week that your employees get a weekly unemployment benefit payment, they will also receive the $600 FPUC payment. If their earnings for a week exceed their weekly benefit amount, not including the $600 FPUC payment, they will not be paid regular unemployment for that week. This also means the $600 additional payment will not be paid.

I am ready to reopen/increase business and call my employees back to work. What needs to be communicated to my employees?

You should directly and clearly communicate the details on the work offered. The details should include start date, full-time / part-time, the wage, type of work, hours, general location, and conditions of the job. An employee must understand work is being offered as opposed to a general discussion of work possibilities. If a job offer is made, it must be clearly communicated as an offer of work. If an employee refuses the job offer, depending on the reason, the employee may be disqualified from receiving further benefits.

Can I report when an employee refuses to come back to work or refuses an offer of work?

You can report job refusals at UIFraud@detma.org. 

Please report the date the offer of work was made, the date the employee would have returned to work, and a description of how the offer was directly communicated to the employee. Also report the following details about the work offered:

  • Date the work would start
  • Full-time / part-time
  • Rate of pay
  • Type of work performed
  • Reason for employee’s refusal (if given)
  • Is the employee being recalled to the same type of work previously performed? If not, describe the former working conditions.
  • Method the job offer was communicated to the employee

I received SBA funding (like the Payroll Protection Program) to pay employees their wages, how does that impact their unemployment benefits claim?

Any week for which employees are paid, their gross earnings must be reported on their weekly claim. If the amount of the earnings exceeds the weekly unemployment benefit amount they will not receive any benefits for that week.

For any week an employee earns and reports less than their weekly unemployment benefit, they may be paid a partial unemployment benefit. If you back pay employees for weeks that they also received unemployment, then the employees will have to repay any unemployment benefits to the department. Failure to correctly report the back pay may result in overpayments or possibly imposition of a penalty.

Will the $600 Federal Pandemic Unemployment Compensation (FPUC) payment be impacted if I pay my employees their regular wages or salary?

The FPUC payment is an add-on payment to someone’s regular unemployment payment. To qualify for that additional money, a claimant must be eligible for at least some amount of unemployment benefits for the week. The $600 will not be paid out for any week the claimant earns more than the regular unemployment amount, or does not otherwise qualify for regular unemployment benefits.

If you give your employee a retroactive wage or salary payment that causes your employee to have to repay their regular unemployment, they will also have to repay the $600 they received for the impacted weeks.

I am bringing my employees back to work and paying them wages for back weeks that they have already been paid UI. What do I do?

If you pay your employees for back weeks and they also filed for unemployment benefits for those same weeks, they will need to notify the department that they have received back pay. Failure to correctly report work and earnings may result in overpayments or possibly imposition of a penalty and prosecution.

I have been approved to pay wages from a bridge loan. Our work is picking up, but not yet full-time. Do I bring my employees back to work or let them continue receiving unemployment benefits?

DUA cannot recommend what strategy is best for your individual business. If you bring them back initially to part-time work the employees may be able to continue receiving partial unemployment payments until they begin to earn more than their weekly benefit amount on a consistent basis. Remind them to report their gross earnings when they file their weekly claim certification. If you bring them back to full-time work, they must stop filing for benefits once they begin working full-time. The unemployment system is designed to ensure payments stop appropriately as long as the person claiming benefits files their weekly claim certifications accurately. If any of your employees intentionally provide inaccurate information in order to continue receiving unemployment benefits improperly, while also working full-time, they may have to pay a penalty for fraudulent activity.

What is the Payroll Protection Program (PPP)?

As part of the CARES Act recently passed by Congress, PPP loans have been made available to businesses to help them retain workers and meet their financial obligations during the COVID pandemic. Employers awarded PPP loans may use the proceeds to pay for: 

  • Payroll costs, including payments for:
    • salaries and wages (capped at $100,000 yearly for each employee);
    • vacation, parental, family, medical or sick leave (but not including qualified sick and family leave wages for which a credit is allowed under the Families First Coronavirus Response Act (FFCA));
    • severance;
    • group health care benefits;
    • retirement benefits;
    • state and local payroll taxes
  • Interest on any debt, rent payments, and utility payments for obligations/service that began before Feb. 15, 2020.

A major benefit of the PPP is that, provided certain requirements are met, employers may have up to 100% of their loan forgiven, including any accrued interest.

For further information, please visit https://www.sba.gov/page/coronavirus-covid-19-small-business-guidance-loan-resources.

What are the terms for PPP loan forgiveness?

In order to be eligible for full PPP loan forgiveness:

  • 75% of the loan proceeds must be spent on payroll costs; and
  • the employer must maintain the same number of employees and salary levels.

With regard to the second requirement, the employer may be required to repay a portion of the PPP loan if:

  • The employer’s number of full-time equivalent employees decreased between Feb. 15, 2020 and June 30, 2020and/or
  • employees who made less than $100,000 in annualized wages in 2019 have their pay reduced by more than 25% during the same period.

If an employer has chosen to layoff/furlough employees or reduce salaries during the COVID crisis, the employer may still be eligible for full loan forgiveness if, by June 30, 2020 the employer rehires employees and restores original salary levels.

For further information, please visit https://www.sba.gov/page/coronavirus-covid-19-small-business-guidance-loan-resources.

What if I’ve received a PPP loan, and my employees refuse offers of rehire?

Despite the loan forgiveness requirements of the PPP, employees may reject employers’ offers of rehire.

In cases where an offer of rehire is refused, employers need not rehire the same employee to comply with PPP loan forgiveness requirements. Instead, employers may restore their workforce by hiring another in place of that employee.

Note that where an employer chooses to discharge an employee who refuses an offer of rehire, although the employee may remain eligible for unemployment benefits due to COVID-related issues, their claims will not count against the experience rating for contributory employers, while reimbursable employers will be responsible for funding only 50% of their claim.

For further information, please visit https://www.sba.gov/page/coronavirus-covid-19-small-business-guidance-loan-resources.

Please remember that employers’ experience rates will not be impacted by COVID-19 claims, unless the employer is reimbursable (self-insured), in which case, the employer will be charged for 50% of the claimant’s basic unemployment benefits. The additional $600 and the 13-week extension are fully funded for all employers.