HR CORNER
14 MOMENTUM
NICOLE BELLOW, DBA, MBA, SPHR, SHRM-SCP
Sr. Human Resources Consultant
Smarter HR Solutions, LLC
713-999-1205 | [email protected]
www.smarterhrsolutions.com
Do You Need Additional Assistance
with Payroll as the Target to the
“NEW NORMAL” Moves?
COVID-19 has not treated us kind and the
total negative impact on small businesses
has yet to be calculated. As we try to
navigate PPP forgiveness, make dollars
stretch, and retain employees, you may
feel there is not much you can do until we find a “new
normal”. There is a resource that may help stretch
payroll dollars so you can refocus on growing your
business.
We are familiar with Texas Workforce Commission
(TWC) and its core services. Due to the pandemic,
we have come to equate TWC with unemployment
benefits for employees (and sole proprietors due to the
CARES Act), who have lost their jobs, were furloughed,
or experienced a reduction in hours/wages. Texas
Workforce Commission’s also offers a Shared Plan to
employers as an alternative to reduction in force during
an economic downturn. This voluntary plan allows
employers to reduce their employees’ wages and
the employee is eligible for partial unemployment
benefits to recoup a portion of their wages that were
decreased. To use the Shared Plan, normal work-week
hours must be reduced by 10% to 40% for at least 10%
of the employees in a given unit. Further, employers can
have multiple plans. An employer may choose to have
a plan for salaried employees (i.e. reduction of 20%)
and a plan for hourly employees (i.e. reduction of 15%).
Insurance and other benefits are expected to remain
active. Please note that although salaried employees
may participate in the Shared Plan, the reduction
must meet the Fair Labor Standards Act (FLSA) – (i.e.
minimum wage – more information at: https://www.dol.
gov/agencies/whd/flsa). Seasonal employees are not
eligible for the Shared Plan.
Under normal circumstances, laid-off or
furloughed employees’ unemployment claims
and Shared Plans are charged against an
employer’s unemployment tax account, which
negatively impacts employers’ unemployment
tax rate for the subsequent year. However,
due to the financial hardships experienced by
the majority of businesses due to COVID-19,
employers are exempt from charges
against their unemployment tax accounts
for unemployment claims brought by their
employees as a result in work separations or
reductions resulting from COVID-19.
If you are looking for ways to retain your
talent and extend your payroll budget until
your business rebounds, the Shared Plan
may be the option for you. The process is
simple, and the plans are normally approved
within seven business days. Once the plan is
approved, employees receive a link to apply
for unemployment benefits under the Shared Plan.
The employer reports hours weekly or biweekly and
the employees receive their partial unemployment
benefit plus the reduced wages from the employer.
The plan can be stopped and started at any time so
if the employer has an unexpected influx of work and
employees work their normal hours without the planned
reductions, the employer will simply omit reporting
hours that week.