Should businesses pay employees to stay home when there's no work?


Fact Box

  • A 2017-2018 survey by the Bureau of Labor Statistics revealed that only 30% of American workers--the equivalent of 41.6 million people--can do their jobs from home [1].
  • The coronavirus pandemic has created the need for nearly 500,000 new jobs nationwide mainly in the sectors of food and household goods production and distribution [2].  
  • Several airline CEO’s are forgoing salaries as a means to buffer the economic damage done to their industry during the coronavirus pandemic travel bans [3]. 
  • As of March 17th, almost 1 in 5 U.S. households has lost work due to the pandemic [4].

Rida (Yes)

Do you know how much it costs to hire a new employee? According to some experts, as much as $4,129 and 42 days, not to mention all the intellectual labor and associated hidden costs involved [123]. Additionally, these figures don’t take into account all the effort of training a new employee before they can be productive to the company, which can take anywhere from 8 to 26 weeks, depending on the nature of the job [4]. That’s not all. The hired worker must then stay with the company to make all that worthwhile, which makes employee retention an even bigger concern than hiring for most Human Resources professionals [56]. No one wants to go through the hiring process again and again because lost employees add to costs considerably. [7]

So, how do you keep your valued employees? I’ll tell you how you don’t – you don’t retain workers by taking away their basic psychological need for financial safety exactly at the time when they need it the most. [8] Refusing to pay staff when “there’s no work” means forgetting all their past contributions and future potential. Employees will only stay with a company if they feel truly valued. [910]

Additionally, customers today, especially millennials, expect companies to socially step up operations and care for their employees. [111213]

Any business that falls short and refuses to provide for its workers will lose valuable employees, as well as brand loyalty.

Katherine (No)

The Fair Labor Standards Act (FLSA) regulates how most workers are paid: it established the 40-hour work week, the minimum wage ($7.25 per hour), and sets rules for overtime pay [1][2]. The FSLA established that employees are paid on the basis of the work they do.

Noticeably absent from FLSA requirements are any rules stating employees be paid for time they are not working, including vacation, sick pay, holidays or for severance [3]. Though many companies offer compensation, these are benefits, not requirements.

On this basis, employers should not pay employees to stay home when there is no work. A lack of work means businesses are not making money. Paying employees draws down their resources, which jeopardizes their ability to survive in the long-term. If businesses can conserve resources during lean times by not paying employees, there is a greater chance they may be able to offer employment back in the long-term.

Unemployment insurance should be a resource for those who are forced to stay home without work. Unemployment insurance requirements vary by state, but most follow the same basic framework, which includes having worked sometime in the past 12 to 18 months [4]. For example, California offers a payment of $40 to $450 a week so long as a claimant is: totally or partially unemployed through no fault of their own, physically able to work, and actively looking for work [5].

It makes sense that workers, who pay state income taxes, take advantage of this program; they have paid in, and they should be able to recoup some of that money.  

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