Can Employees Collect UI Benefits If I Reduce Their Hours?

The COVID-19 pandemic has left most people with a sense of uncertainty. With conditions constantly evolving, both employers and employees are left wondering what will happen next. Both are trying to stay afloat and make the best decisions possible, given the circumstances, but frequently it’s not easy.

For employers, the decision to furlough or lay off their workforce weighs heavily depending on their industry, and now it’s the consideration of whether or not it’s safe to return. Balancing the bottom line with the desire for safety creates conflicts, and may cause adjustments to schedules, leaving employees with fewer hours.

Reducing your employees’ hours

A reduction in hours can occur for a number of reasons, including the need for workshare to keep the numbers in the building low or trying to keep everyone working with less business. No matter the reason, it’s not a decision made lightly as it can impact the livelihood of employees. Fortunately, unemployment insurance is still available in these circumstances.

While the CARES Act, signed into place in March, provides additional and extended UI benefits for workers affected by COVID-19, this benefit has always been available for your team. While not a straight lay off, it can still have an economic effect on them, thus resulting in benefits.

Filing because of reduced hours

Employees who file as a result of a reduction in their hours qualify for what is known as partial unemployment benefits, because they are still able to work and earn at least some of their normal salary. Unlike normal UI benefits, which typically aren’t awarded to workers who quit, a former employee may be eligible to file if they quit due to loss of hours.

Long-term effects of UI claims

While an employee can file and receive compensation, meaning they have the financial support they need during the challenging COVID-19 times, you still need to be aware of the impact the decisions can have on your unemployment tax rates. Obviously, this decision shouldn’t affect how you take care of your team but should be considered when cycling through options to support both them and your bottom line.

Keep track of your unemployment claims

Having a good handle on the monitoring of your unemployment claims is always important, and perhaps now more than ever. With Unemployment Tracker, you can find the solution you need for your budget to help you experience a higher level of control. Request a live demo today to learn more about how our software works for you.