Question: If I cease operations, what happens to my employees
- You have two options: (1) Layoff your employees or (2) Furlough your employees
- Laying Off Employees
- Going this route, you are essentially terminating your employees with the possibility of later reinstating them. Make sure to pay your employees for all hours worked and any vacation/paid-time off.
- WARN Act notice requirements have also been suspended. However, you must include the following in their termination letter: “If you have lost your job or been temporarily, you may be eligible for Unemployment Insurance (UI). More information on UI and other resources available for workers is available at labor.ca.gov/coronavirus2019”
- Furloughing Employees
- With this option, your workers are still your employees. They still have health benefits and PTO, but cannot use sick leave.
The Advantage of Furloughing Rather Than Laying Off
- Furloughing may save employers without large banks of PTO more money in the long run. Furloughing gives you the ability to recall employees gradually and may reduce your unemployment utilization.
NOTICE: Attorney advertising. Attorney licensed to practice law in California only. Not intended as legal advice. No attorney-client relationship created hereby.