Categories: Coronavirus

Extra Federal Benefits Ease Layoff Decisions For Employers

Some employers are breathing a sigh of relief, noting that their laid-off workers are much better off financially amid the economic dive of the COVID-19 pandemic.

According to a report by The Wall Street Journal, the recently signed stimulus package provides laid-off workers with an extra $600 weekly for 16 weeks, on top of their regular unemployment payment.

A check of government benefits by PYMNTS found that while the weekly unemployment rate varies dramatically by state, from $235 in Mississippi to $823 in Massachusetts, they will all be paid more with federal dollars, at least through July.

The minimum wage in Mississippi is $7.25 per hour for a weekly paycheck of $290. An unemployed resident of that state would receive $835 weekly when the federal payment is added.

In Massachusetts, minimum wage workers receive $12 per hour, or $480 weekly. An unemployed Bay State resident has the potential to collect as much as $1,435 weekly for four months.

In an email, Equinox Executive Chairman Harvey Spevak, whose New York-based company laid off some employees at its more than 100 locations, had a surprising message, the Journal reported: “We believe most will be better off receiving government assistance during our closure,” he said.

Equinox is not alone. Other companies such as Macy's, the Ohio-based national retailer and Steelcase, the Michigan office furniture company, have cited the generous stimulus unemployment benefits as they furlough staff while the coronavirus pandemic rages.

The stimulus package by the White House and Congress has appeared to ease the pain of employers who have to let some workers go as the economy tanks.

James Keane of Steelcase said while he was forced to furlough thousands of hourly workers after they shuttered their Michigan factories, the CEO felt better when he discovered his employees would be paid about the same as if they were still working. “The combination of state unemployment benefits plus the federal unemployment benefit is nearly a complete replacement for our Michigan factory workers who were laid off," he said. "It made that part of the decision more palatable.”

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NEW PYMNTS STUDY: LEVERAGING THE DIGITAL BANKING SHIFT – SEPTEMBER 2020

The September 2020 Leveraging The Digital Banking Shift Study, PYMNTS examines consumers’ growing use of online and mobile tools to open and manage accounts as well as the factors that are paramount in building and maintaining trust in the current economic environment. The report is based on a survey of nearly 2,200 account-holding U.S. consumers.

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