Legal Update Workforce Reductions
March 21, 2020
The recent passage of federal legislation known as Families First Coronavirus Response Act (FFCRA), along with state legislation and proclamations, have provided public and private employers alike with another set of tools to help navigate the employment challenges caused by the coronavirus pandemic. Governor Reynolds recently announced that Iowa Workforce Development will be offering unemployment benefits to those individuals who are laid off or cannot report to work due to business closure and are not receiving pay. Individuals seeking these unemployment benefits must otherwise qualify for unemployment. Iowa Workforce Development has stated that, for any employee who receives unemployment benefits due to a layoff or shutdown related to the coronavirus pandemic, the employers’ unemployment account will not be charged for the benefits provided.
Additionally, the Iowa Workforce Development's Voluntary Shared Work Program (VSWP) is an option that employers may consider. The VSWP is designed to be used as an alternative to layoffs when employers face a decline in regular business activity. Under the VSWP, reductions in the workforce are shared by reducing the employees' work hours with unemployment insurance partially replacing lost wages. The benefit of the VSWP is that it helps employers manage their expenses while also keeping the employees connected and ready return to their normal work hours when business improves. It is also possible to use the VSWP for specific affected work units within your entity. Please note that you must complete an application with Iowa Workforce Development before you can engage in the VSW program. Additionally, there are a number of commitments you must make as an employer before engaging in the VSWP.
For more information on the unemployment options that exist for layoffs related to the coronavirus pandemic, including VSWP requirements and assistance with the application, please feel free to contact our office.