Layoff or Temporary Furlough Guidance

Based on the executive order issued by Governor Whitmer on Monday, March 25, 2020 there are specifications and considerations for your Company.  Some of these considerations have already been discussed in the last few weeks and will require the continued implementation of these practices and processes. Please review the following for further consideration:

Michigan State Mandated Stay-at-Home

As a general statement, you will need to evaluate your business and determine what is critical per your State’s directives.  You will need to decide what work can be done remotely and what cannot, which may include evaluating individual jobs.  Employees who are able to continue their work remotely are recommended to do so. Ensure that these expectations are clarified and provided to employees. In Michigan, you will need to notify employees in writing if their position is defined as “critical infrastructure” by March 31, 2020 as should be signed by a company executive.

For employees who work in a state with an executive order to Stay-at-Home, if they are unable to work remotely, they should qualify for State Unemployment.  Please check with your state Unemployment Insurance Agency to see how this is being addressed in the state the employee works.  For Michigan, information can be found here.

Michigan Unpaid Leave vs. Termination

Due to the uncertainty regarding potential congressional action regarding whether furloughed workers will be able to access federal resources, employers are urged to place employees on temporary leave as opposed to termination. View the State’s guidance for employers contemplating potential layoffs. Placing employees on furlough also allows for them to continue access to employer-provided health insurance benefits during this leave. For Michigan, please find a useful worksheet here. 

Michigan Work Share

Employers are encouraged to implement the State’s Work Share program that permits employers who may be facing maintaining business operations during declines in regular activity instead of laying off workers. The program allows employers to keep their employees working with reduced hours, while employees collect partial unemployment benefits to make up a portion of the lost wages. More information about Work Share is available online at


As published last week, the Families First Coronavirus Relief Act (FFCRA) was enacted on March 18, 2020.  It is effective on April 2, 2020. We anticipate the Department of Labor pushing out required postings/notices by March 25, 2020.

The FFCRA addresses specific ways to pay employees who are themselves sick, carrying for a sick family member or have a school-age child at home who is unable to attend school because their school is closed.  It does NOT cover scenarios where a State Governor has issued “stay-at-home” orders and in essence, closing businesses to non-essential work.  Information related to the FFCRA can be found here.  

Other Items to Consider

  • Existing Vacation/Sick Leave banks – yes, you can allow the employee to use any current vacation and/or sick leave before they collect unemployment. In this case, you would need to keep them on payroll until they exhaust that time before they can collect unemployment.
  • COBRA – for any employee who had health insurance with your company, that is terminated, you MUST provide them a COBRA notification.  If you need assistance, please contact us.
  • Any furlough or layoff notice should not have a specified return to work date or binding agreement that the employee will return to work.  Please see attached sample.
  • Employees with school-age children – It is possible, that you have an employee who would be eligible for State Unemployment, but they also have a school-age child at home who is unable to attend school due to a closure. In this scenario, it is more beneficial for the employee to have the monetary benefits of the FFCRA than state unemployment. These individuals will need to be evaluated on a case-by-case basis.
  • If you have 1099 contractors – while they are not currently covered under the FFCRA, there is the potential that legislation at the federal level is forthcoming for them.

If you need a sample letter you can use for employees being placed on temporary leave, you may download HERE.