We are receiving many questions from small businesses regarding employee eligibility for unemployment benefits in connection with layoffs or furloughs due to COVID-19.  We wanted to provide some common FAQs below.  

Question: What is the difference between a layoff and a furlough? 

Answer: For private-sector businesses, a furlough is a temporary unpaid leave of absence or a specific, short-term period of time where an employee’s hours are reduced below their regularly-scheduled hours (hours can be reduced down to 0); the employee still remains “on payroll” and your employee. A layoff is essentially the same as a formal termination; the employee is removed from payroll and is no longer your employee.     

Question: Are my employees eligible for unemployment benefits if I furlough them as opposed to a layoff? 

Response:  Yes. Under Governor Cooper’s Executive Order issued on March 17, 2020, employees who are laid off or whose hours are reduced due to COVID-19 are eligible to apply for unemployment benefits. In a layoff or a furlough due to COVID-19, we would suggest providing employees with written notice that the reason for your decision is related to COVID-19.  

Question:  Can my employees apply for unemployment benefits if they are still working some hours for the business?

Response: Yes. Under Governor Cooper’s Executive Order issued on March 17, 2020, employees whose hours are reduced due to COVID-19 are eligible to apply for unemployment benefits. 

Question:  If an employee uses their PTO or accrued paid vacation or sick leave during a furlough or a leave of absence, can they still apply for unemployment benefits?

Response:  Possibly. In a furlough, the use of PTO or paid vacation/sick would provide them with a portion of their normal wages for the relevant workweek; because they are still employed, the NC Division of Employment Security (DES), may reduce their unemployment benefit. In a layoff, if you are required by your policy or otherwise by NC law to pay out the value of any accrued PTO or vacation leave upon termination, then the payment would not impact their unemployment benefits. If you are not required to pay out accrued PTO or vacation leave upon termination and choose to do so, then this could either reduce their unemployment benefit or delay the employee’s ability to file for benefits.

Question: What can an employee recover in unemployment benefits?

Response: Currently, in NC, the maximum amount an employee can recover is $350/week; however, this could be increased by possible additional federal funding. 

Question: Can employees file online for benefits?

Response: Yes. Here is a link to the NC DES application page

Question: Do employers have to provide information to DES about the employee’s wages?

Response:  After an employee files for benefits, employers should receive notification of the application and will be asked for information regarding the reason the employee has filed for benefits and the wages paid.  Employers are required to provide a response within 10 days. The DES recently implemented an online portal to manage benefits. If you do not have a DES employer portal account, you can go to the DES website and create a login. 

For additional questions, please contact us or schedule a consultation