Street sign displaying "Time to say Goodbye"

How to Help Your Laid-Off Automotive Employees Manage Unemployment

Social distancing is the end of in-person auto auctions, at least for a while. If you are like most auction companies, you have switched to simulcast. An online-only situation and a potentially declining demand for sales (although the numbers aren’t out yet) may have forced a layoff for some of your employees. The same is true for many related specialties, like dealerships, body shops, and large recon MSO’s. Here are some tips to help them through this process.

If you lay off or furlough your employees, they are eligible for unemployment. Some states like Mississippi have ridiculously low caps, barely enough even to buy groceries each week. As an employer, you have no control over what they can receive when they apply for unemployment benefits.

But here’s what you can do:

Don’t block unemployment.

When the state sends out unemployment eligibility documentation, don’t mark the employee as fired for cause, which would keep your unemployment insurance rating low, but would lock the former employee out of a check. It could also save you a wrongful termination suit down the road.

Severance pay if you can afford it. 

In Maryland, you can file immediately for benefits and begin receiving a check, but other states have red tape and waiting periods. Your employees will need money now, not later, and severance will help get money in their bank while they get their ducks in a row.

Extend health benefits. 

The humanitarian thing to do during this health crisis is to continue paying benefits. You will save the bottom line in reduced salaries and payroll taxes, but be kind and keep the health insurance going at least until the nation is in the clear. Hopefully, it will only be a month or two at most.

Rehire as soon as possible. 

When life returns to normal, so too will the business demands. Your former employees are the best suited, best-trained employees for your business because they used to work there. If these employees are still available, not only will they be grateful that you wanted them back, they will probably be even more productive than they were before they were laid off.

Keep an Eye on the Federal Stimulus Package. 

As of this writing, the federal stimulus package is still not passed. But if it does, there will be some financial relief for small businesses and some options for you as an employer. It’s too soon to advise on that in a blog other than to suggest that there may be solutions for you forthcoming, and they should be taken into consideration for you and any employees you have to cut from the team.

Offer outplacement or other unique support options. 

This will definitely depend on your company’s budget, but there are outsource outplacement companies that you can hire that specialize in the outplacement of displaced employees. These experts help employees polish resumes and work their networks to find employment. This is especially useful if you have no intention of rehiring any of this staff.

Layoffs are simply one of those business decisions that you have to make to ensure the survival of the company. It can be uncharted territory for many business owners, especially in the wake of a new-to-all-of-us global pandemic. Hopefully, these tips will help you handle this rather unpleasant situation.

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