While unemployment claims skyrocket, some business owners are running into a unique problem – they’ve received grant money and can hire their employees back.
But some employees don’t want to return to work.
Natalie Cioffi, owner of CDJ Genie Services, a cleaning company based in Frederick, made the hard decision of furloughing some of her cleaners when the pandemic started.
“I had to let go pretty much half of my staff prior to receiving the [Paycheck Protection Program] loan, just because business slowed down dramatically even though we were still essential,” Cioffi said. “So obviously that was very stressful for us and very stressful for them.”
But since then, work has picked up again. With construction sites having to follow more strict cleaning guidelines, Cioffi has gotten more business from the construction sector. Plus, she secured funding from the Small Business Administration’s Paycheck Protection Program, and can therefore afford to pay all of her employees again.
She said that about 95 percent of the employees she laid off have come back. But a few said they would rather not – their unemployment insurance has been coming in, and they don’t feel safe returning to work. For many, the enhanced unemployment insurance is more than they would be making at work.
“I can definitely understand their concerns about having that money now, especially since they went without pay for X [amount of time] because unemployment didn’t come right away either,” Cioffi said.
Ken Tucker, owner of Tucker Air Conditioning, heating and Plumbing is in a somewhat similar position. He didn’t lay off or furlough any of his employees when the pandemic hit. While business has been down, plumbing and HVAC are considered essential businesses, so he could stay open.
He kept all of his employees on and guaranteed them at least 35 hours of work a week. He started a program called Tucker Academy where he held workshops and lessons for his employees about different skills so that even if they didn’t have work to do, they could still come in and get paid.
A few employees decided to take an extended leave, Tucker said. While he hadn’t laid them off, they left on their own accord because they didn’t feel safe.
Tucker understands — while he has put strict personal protective equipment and disinfecting guidelines in place for all of his employees, he knows that working in people’s homes can be nerve-wracking, especially for those who have immunocompromised family members at home.
He thought, however, that they could apply for wage replacement through the Family Extended Leave Act, which would mean that they were still getting paid by Tucker, through a payroll tax break. But they filed for unemployment the same day they announced they were leaving, and filed as if they had been laid off.
Rick Weldon, chief executive officer of the Frederick County Chamber of Commerce, explained that the Maryland Department of Labor is allowing people who left work on their own accord because they do not feel safe to file for unemployment.
“And that was never true before, it’s only been true because of COVID-19,” Weldon said.
Tucker is preparing for an increase in business come June, when things might open up a bit and more people will need maintenance on their air conditioning systems. But he worries he doesn’t currently have the staff to sustain it.
“I’m not trying to complain about people not working,” Tucker said. “But we are in a scenario where I have work, I need them, I need to bring somebody in, and we’re always looking to hire.”
Both Tucker and Cioffi are now both in a tough spot – do they wait on their employees who are not returning to work to come back? Or do they fill their spot before they see a surge in business demand?
Weldon has heard from a few different concerned businesses in Frederick County about this very issue. When he contacted the Department of Labor, he found out that businesses who furloughed employees – or had employees leave on their own – do not have to wait for those employees to come back if they have rejected their return offer. They can hire somebody else in their place.
“If I knew they were coming back to work in two weeks as an example … then I can look at it one way,” Tucker said. “If they’re wanting to take advantage of unemployment all the way to the middle of July as an example, then I need to go out and bring in employees.”
Weldon has spoken to a variety of businesses in Frederick County, and said most business owners are confused about why unemployment is paying so much more now than before.
“It just seems totally illogical that we’re paying employees more than they were making when they were working … because why would you go back to work in that situation?” Weldon said.
Cioffi pays her cleaning crew between $17 and $25 an hour, but she can’t compete with the rate that the employees who are staying on unemployment are receiving.
“And it just puts us in a horrible situation again, because of the emotional situation with this whole thing. I don’t know what the right answer is for this.... I can see why [enhanced unemployment] seemed like a good thing,” Cioffi said. “But for small business owners, it’s very tough.”