Many states are beginning to reopen in phases and employees are being called back to work. In general, most states have provisions that require workers receiving unemployment benefits to be actively seeking work, but many states relaxed that requirement due to the coronavirus (COVID-19) pandemic. Some states are now warning unemployment benefit recipients that if their employers are reopening but they refuse to go back to work, they’ll be deemed to have refused work and will be ineligible for unemployment benefits as a result.

Disqualification

State unemployment laws generally disqualify an individual from claiming unemployment benefits if they refuse suitable work. Being called back to work and refusing may fall under this disqualification category.

Here’s some information about what seven states have addressed this issue.

1. Iowa. The Iowa Workforce Development (IWD) announced that businesses should report employees who refuse to go back to work “without good reason,” or who quit their jobs on a IWD website form. Previously, the IWD issued a notice that employees, who were laid off as a result of COVID-19 but who refuse to go back to work when recalled by their employers, will lose unemployment insurance (UI) benefits.

An exception to this loss-of-UI benefit rule applies in some specified cases, such as if an employee or a member of an employee’s household has tested positive for COVID-19 or has childcare or transportation issues related to COVID-19. “Refusing to return to work when recalled for any other reason, or in an attempt to continue to draw unemployment benefits will be considered a ‘voluntary quit’ which would disqualify a claimant from receiving benefits, including the Federal Pandemic Unemployment Compensation benefit of $600/weekly,” the announcement stated.  For more information, visit: https://www.iowaworkforcedevelopment.gov/iwd-announces-guidance-unemployment%C2%A0benefits-iowans-who-refuse-return-work-without-good-reason-when

2. Minnesota. In a question on its website, the Minnesota Department of Employment and Economic Development states that if an employer reopens and an employee is able to return to work, the employee must do so. “Refusing to return to work may affect your continued eligibility for unemployment benefits,” the department states. For more information, visit: https://mn.gov/deed/newscenter/covid/safework/workers/faqs/

3. Oklahoma. During a series of video meetings with businesses, Oklahoma Secretary of Commerce and Workforce Development Sean Kouplen said that workers who are receiving unemployment benefits can lose those funds if they refuse job offers from their former employers as the state reopens. He added that it’s likely a person would have to return to work or lose their unemployment benefits if: 1) the person isn’t considered part of a vulnerable population to COVID-19; 2) the job offered has the same or greater pay; and 3) the business is taking steps to mitigate the spread of the disease at the workplace.

However, Kouplen acknowledged that clarity is needed to adjudicate these decisions and the Oklahoma Employment Security Commission is seeking guidance from the U.S. Department of Labor.

4. South Carolina. The South Carolina Department of Employment and Workforce (SCDEW) posted a notice on its website advising employers that individuals who turn down offers of suitable work aren’t eligible for UI benefits during that week. If an employer has offered an individual a job and he or she refuses it, the employer is advised to report the incident to SCDEW through an on-line portal.

The SCDEW offers a link to an Employer Refusal of Job Offer Guide. For more information: https://dew.sc.gov/employers/ui-benefits/hiring-new-workers/offers-of-work

5. Tennessee. Governor Bill Lee issued Executive Order No. 30 that permits some Tennesseans to return to work under certain guidelines. The Tennessee Department of Labor and Workforce Development states on its website that if unemployment benefit recipients fail to return to work when called, or fail to accept suitable work when offered, they’re no longer eligible for unemployment benefits. “Any benefit you collect after refusing work will result in an overpayment and must be paid back,” it adds.

For more information: https://lwdsupport.tn.gov/hc/en-us/articles/360045580014-What-happens-if-I-do-not-return-to-my-job-when-called-or-do-not-accept-suitable-work-when-offered-

6. Texas. Like many states, the Texas Workforce Commission (TWC) has temporarily loosened the requirement that unemployment benefits recipients be actively looking for work. However, workers receiving benefits who are called back to work may lose benefits if they don’t go back. In an interview with an Austin television station, The TWC’s Executive Director Ed Serna stated: “We’re not going to just cut somebody off because they didn’t go back to work. We’re going to evaluate each of those situations on a case-by-case basis.”

Certain situations would excuse an employee’s refusal to return to work. Serna also noted that the governor’s reopening plan includes workplace safety standards, and that if an individual is concerned about safety, that would certainly be taken into consideration in making a benefit decision. While eligibility will be determined on a case-by-case basis, he acknowledged that it will be difficult for a worker to not go back if he or she is healthy and the employer provides a safe environment

For employer resources related to COVID-19 in Texas, visit: https://www.twc.texas.gov/news/covid-19-resources-employers

7. Vermont. On its website, the Vermont Department of Labor reminded unemployment claimants that they’re no longer eligible for UI benefits if their employer recalls them to work and they refuse to return after a temporary furlough related to COVID-19. Here is a question from a benefit recipient, along with the department’s answer:

Q. My employer asked me to come back to work but I do not feel safe going back.  Can I not go back to work and keep filing for unemployment?

A. Failure to accept work when you are able and available will disqualify you for unemployment benefits.

This includes employees who refuse to continue employment provided by the Paycheck Protection Program. If an employer has offered work to a temporarily furloughed employee, and the employee has refused to return to work, the employer can file a Fraud Report online at: https://labor.vermont.gov/form/refusal-work-fraud-report

A Changing Environment

The unique circumstances that COVID-19 has posed as caused guidance from state agencies to change. Check with your payroll and tax advisors for the latest information in your situation.