Should businesses pay employees to stay home when there's no work?
- 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.
- The coronavirus pandemic created the need for nearly 500,000 new jobs nationwide mainly in the sectors of food and household goods production and distribution.
- A 2020 NPR/PBS NewsHour/Marist poll found that almost 1 in 5 US households lost work due to the pandemic.
- According to the US Census Bureau, in March 2021, 4 out of 5 people in poor health did not switch to telework, while half of those in excellent health did.
According to some experts, it costs as much as $4,129 and 42 days to hire a new employee, not to mention all the intellectual labor and preparation involved, which all contribute to associated hidden costs. Additionally, these figures don’t consider all the effort of training a new employee before they can be productive for the company, which can take anywhere from 8 to 26 weeks, depending on the nature of the job. That’s not all. The hired worker must stay with the company to make all that worthwhile, making employee retention an even bigger concern than hiring for most Human Resources professionals. No one wants to go through the hiring process again and again because lost employees add to costs considerably.
So, to keep valued employees, employers should realize they cannot retain workers by taking away their basic psychological needs for financial safety exactly when they need it the most. 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. Customers today, especially millennials, expect companies to step up operations and care for their employees in more ways than one—that includes considering social issues. Any business that falls short and refuses to provide for its workers will lose valuable employees and brand loyalty.
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 set rules for overtime pay. The FLSA 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 the time they are not working, including vacation, sick pay, holidays, or severance. 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 cannot make money. Paying employees draws down their resources, jeopardizing their long-term ability to survive. 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 forced to stay home without work. Unemployment insurance requirements vary by state, but most follow the same basic framework, which includes having worked some time in the past 12 to 18 months. 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.
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.