Some employers find it difficult to hire back workers on unemployment

SOUTH LAKE TAHOE, Calif. — Cassi Selders, who owns two souvenir shops with her husband, Andy, was excited when they finally got the green light to re-open the shops.

The couple didn't try to rehire any of their eight former employees right away because they weren't sure if they would sell enough merchandise to justify it. In fact, they decided to open just Blue Pebbles in Heavenly Village because they were worried their other shop, Base Level, across the street, wouldn't get enough foot traffic.

“We do have some locals come in, but 99% of our stuff is for tourists,” Cassi said, and added they are still supposed to be avoiding non-essential travel.

The couple went to work in the 1,550-square-foot store, dusting off the merchandise and shelves and removing stored goods from boxes. When they decided they were ready for some help, they checked to see if anyone wanted to pick up a few hours until business picked up.

The answer was no.

That reasoning to turn down part-time work was sound, if inconvenient, said Selders.

“As an employer, we had concerns from the very beginning of this that the $600 bonus could make it hard to get employees back because they could earn more in benefits than we could afford to pay them,” she said, referring to the weekly bonus Congress attached to unemployment benefits as part of the CARES Act.

As many as 64% of the people laid off nationwide as a result of COVID-19 will get more money if they stay on unemployment through July 31 — when the bonus ends — than if they continued working at their old job, according to a study done in May by the Becker Friedman Institute for Economics at the University of Chicago. Even people who have a job have asked to be laid off to collect unemployment, the study found.

A Californian can now get as much as $1,050 per week in unemployment benefits, and though that sounds appealing, there are risks involved in rejecting a job offer if one comes, said Steve Teshara, chief executive officer of the Tahoe Chamber of Commerce.

“If they say ‘no' to going back to work, they're potentially jeopardizing their unemployment benefits,” he said.

That's because the insurance is designed to be a temporary lifeline for people who are out of work through no fault of their own, and it requires that they actively seek (and accept) suitable work, though ‘suitable' may have acquired new meaning during a pandemic.

Another risk of rejecting a job offer today is that it amounts to betting on a brighter future that might not come anytime soon, said Teshara.

“If the boss calls and says, ‘Are you ready to come back to work?' And they say, ‘Nah, I'm really enjoying my extra benefits here,' and then call back when the bonus ends looking for work, the boss could say, ‘We don't need you. We've found somebody else to take your place.'”

If Congress doesn't approve any new measures, the benefits will drop back to $50-$450 per week, depending on how much the applicant earned before being laid off.

“There's no guarantee what the job market will look like then,” said Teshara.

Not everyone who rejects a job offer does so in order to spend quality time with the couch while the benefit checks roll in. Some are enthusiastic to return to a job they loved, or to regain a sense of normalcy, but the price has to be right.

If they are offered fewer hours than they used to have — and in some cases, significantly fewer — with no promise of an uptick anytime soon, it might not be worth it.

Selders, who was unsuccessful hiring for part-time work, said she's heard from other employers facing the same difficulty she did.

“We've heard that the extra $600 a week — which is good for (the employees) — is making it tough for the employers. When they're offered work, they say, ‘I'm making more sitting at home. On the positive side, we have other employees who are eager to get back to work. They want to get out, to get back to normalcy.

“I'd love to say, come back full time this weekend,” she added, “but you don't know if you're going to have two sales or a normal day.”

People on unemployment wouldn't lose the entire benefit if they returned to work part-time, but they would lose a portion of it, depending on how much they earned at their part-time job.

According to the California Employment Development Department web page, if your weekly benefit is $315, and your job paid you $200 that week, you would still be able to collect $165 from the EDD. For now, you'd also get the $600 bonus.

Right now, someone making minimum wage of $13 per hour in California would make $520 for a 40-hour week; unemployment benefits would begin at about $650 per week.

Apart from cash considerations, some workers are weighing whether it's safe to go back to work if the job requires lots of encounters with people and spending the day indoors, breathing shared air. Even if everyone is practicing social distancing, wearing a mask and spraying copious amounts of disinfectant on everything, those conditions can be intimidating.

Teshara, who owns Sustainable Community Advocates, a governmental affairs and planning consulting business, said that for these people, the unemployment benefits can offer the luxury of time to consider their options.

“That's absolutely legitimate,” he said. “Some people are contemplating whether they want a different line of work, something where they're not on the front lines, because we know the virus is still with us, and there's no vaccine on the horizon. We have to respect (the employees') concerns.”

This article was first published May 27 by the Tahoe Daily Tribune and is republished here with permission.