Many public employers are considering staffing adjustments in light of the coronavirus and its impact on available work. For those employees not covered under contracts that must be paid in the case of an “epidemic or other public calamity” pursuant to RC 3319.08(B) and 3319.081(G), layoffs are being contemplated. In order to have all the information on the financial impact of such a decision, the public employer should consider whether it is a “contributory employer” or a “reimbursing employer.”
Generally speaking, public employers are reimbursing employers. Essentially, reimbursing employers are self-insured and will be billed dollar-for-dollar by the Ohio Department of Jobs and Family Services for claims paid. Public entity employers who have elected to become a contributory employer have paid unemployment tax. Contributory employers will have their claims mutualized with other employers in the state and will not have to reimburse on a dollar-for-dollar basis. Determining if the public entity is a contributory employer or a reimbursing employer will be necessary to determine how much will be saved via staffing reductions.
The Coronavirus Aid, Relief, and Economic Security Act (the CARES Act) provides that reimbursing employers may be reimbursed for one-half of the amounts paid into a state unemployment trust fund between March 13, 2020, and December 31, 2020.
If you have any questions regarding unemployment compensation issues, please reach out to any of the Ennis Britton lawyers.