New Orleans will begin loosening business restrictions this weekend, two months after the city and state brought the economy to a grinding halt to contain the spread of the coronavirus. On Saturday, the city’s “Phase One: Safest at Home” plan will allow retail stores, gyms, nail salons, museums, movie theaters, churches and more to open their doors at 25 percent capacity.
Whether the individual businesses within those categories choose to open or not will have major implications for their employees, forcing some to weigh their safety against their ability to pay rent, utilities and health insurance.
Some workers who spoke to The Lens are worried that they’ll be brought back on reduced wages or hours that won’t be enough to cover costs, but will be enough to kick them off unemployment benefits and the temporary $600 a week payments set up by the federal CARES Act.
While the gravity of those decisions is high, so too is the degree of uncertainty that surrounds workers as they weigh their options. There are still massive gaps in understanding about what phase one will look like, how it will affect the city’s infection rate, how long businesses will be able to stay open or who exactly is eligible for special pandemic unemployment assistance.
On Tuesday, New Orleans Mayor LaToya Cantrell went on WBOK-AM to field resident questions about the reopening. One of the callers was Courtney Gullo, an employee at a local outdoor sports retail store who is studying to become an EMT.
“My question for you, Madam Mayor, is about unemployment benefits. My place of employment is getting ready to open this weekend. I’m worried because I live with my immunocompromised mother and I’m wondering if I have the right to choose not to go back to work? And will I still be eligible for benefits?”
Cantrell was tentative in her response, but implied that choosing to stay home could make her ineligible for unemployment benefits. The Louisiana Workforce Commission — the authority on who is and is not eligible for unemployment benefits — did not provide The Lens a clear answer as to whether a worker like Gullo may qualify for continued benefits.
“So we’re having to choose to put ourselves at risk,” Gullo said.
“Courtney, it is a decision, yes it is,” Cantrell said. “Hang in there.”
People throughout New Orleans who can’t work remotely are now facing similar decisions. If they refuse to go back into work, they could risk both their jobs and government benefits. If they choose to go back in, they could risk their health and that of the members of their household, and they could end up with less money than what they get through unemployment benefits.
“Right now I want to say no,” Gullo told The Lens in an interview. “I want to stay furloughed. I don’t want to be part of the guinea pig process. … It’s such a gray area on what I’m willing to sacrifice to go back into work.”
Others said they see no choice but to return.
“I figure they’d force my hand to come to work because they’d stop my unemployment,” said a 20-year Harrah’s employee who asked that The Lens not publish her name. “But I’m very afraid to go back.”
While the state started allowing casinos to open on Friday, the city of New Orleans is keeping them closed. The Harrah’s employee said she was grateful for that decision, which will allow her to stay at home safely and continue collecting the temporarily inflated unemployment benefits.
“What makes them think our death rate won’t increase opening up right now?” she asked.
New Orleans’ infection rate has sharply dropped since early April, when the city was seeing an average 450 new cases a day. For the past several weeks, the number of new cases has hovered below 50 a day. The number of available tests in the city has improved exponentially from the early days of the crisis, and the Louisiana Department of Health is working to hire hundreds of contact tracers to help track and notify people who have been exposed to an infected person.
But the virus has by no means disappeared, Cantrell noted on WBOK.
“We know that we’re going to be living with this virus, quite frankly until a vaccine is created. And that’s still 9 to 12 months out. And that can go even further.”
‘That doesn’t protect me from a person who does not care.”
A defining feature of the battle against the coronavirus has been a lack of reliable information, clarity and consensus about what the future holds. And while the city and state are both closely following data trends and hoping for the best, neither claims to know what the virus will do after the reopening.
“That’s the most stressful part about it,” Gullo told The Lens. “The situation is so fluid. It’s not even every day things change. Every hour things are different. And it’s basically impossible to attempt to plan, to have a plan. Or even think, ‘If this happens here’s what I’ll do.’ “
There is a long list of things that workers have no control over as the economy reopens. Top of mind for many is not only how well their employers prepare, but whether their customers act responsibly.
“When you do a public-facing job, you expect to have to deal with the public and maybe like it too, but you also have this overlying veneer of not knowing how the public is going to react to this,” a beauty advisor at Sephora told The Lens. She asked to remain anonymous due to a confidentiality agreement with the company.
“I don’t know if people are going to respect our boundaries or completely overstep our boundaries. Those kinds of interactions don’t necessarily fall on bosses; they fall on workers like me who are the first person interacting with them. … We’re provided facemasks. I’ve read through 12 pages of new rules as far as hygiene goes. But that extends to us and not necessarily the public at large. And that’s the scarier factor of it.”
A recent outing has made Gullo nervous about what the reopening will look like.
“My first big adventure since quarantine, I went to Target in Metairie to get a Mother’s Day present with my sister. And it was pure blasphemy. I walked in the door and I nearly had a panic attack. It reminded me of Black Friday shopping. I was not expecting this at all.”
Gullo isn’t alone in her anxiety. A recent poll from The Washington Post found that nearly six in 10 Americans working outside their homes fear contracting the virus or spreading it through their households.
“That’s the massive, number one thing on my mind. I can go to work and wear a mask and try to be as safe as possible, but that doesn’t protect me from a person that does not care.”
“Residents with concerns about businesses not complying with the mask requirement should report their concerns to 311,” a Cantrell spokesperson said in an email to The Lens. “These reports will be routed to Safety and Permits.”
Still, the health impacts of going back to work are unpredictable. And if that wasn’t cruel enough, the financial impacts of not returning to work are opaque, at least for some workers.
Can workers say no?
It had been two months since Wilson McCullough heard from one of his two employers — Company Burger’s location in the Central Business District — when he received a text from his manager on Saturday.
“Although we have been closed, we will begin paying all employees again this Wednesday on the 5/15/20 pay date,” the text said. “This will continue for the next 2 months on the 15th and the last day of the month, whether or not you are scheduled for shifts.”
The restaurant had received a loan under the federal Paycheck Protection Program, a loan for businesses that can turn into a pure grant if the company meets certain conditions, including retaining staff and paying at least 75 percent of their usual salaries for eight weeks. It also requires companies to report employees who refuse to come back to work to the state’s unemployment office.
The news that McCullough would get paid for the next two months regardless of how many shifts he’s assigned would normally be good news. But these aren’t normal times.
“Please let me know if you plan on resuming your employment at Company Burger, or if you choose to resign,” the text said. “If you have been claiming unemployment but choose to continue your employment with Company Burger, do not file for unemployment next Sunday 5/17/20. If you choose to resign, you may be found by the state to be ineligible to continue to receive unemployment, or have to pay back unemployment checks subsequently received.”
Normally, weekly unemployment benefits from the Louisiana Workforce Commission cap out at $247 a week.
“It is pathetically low,” McCullough told The Lens in an interview. “I qualified for $231 a week from the state. And that’s based on my quarterly earnings from the previous fiscal year.”
But under the CARES Act — the $2 trillion economic stimulus package passed by Congress in late March — the federal government is boosting those payments by $600 a week until July 31.
“I’ve listened to the mayor and to some extent the governor,” McCullough said. “I stay at home, I only go out to get groceries or medication or maybe to take a bike ride or exercise. And it’s been fine because of the CARES Act. The CARES Act is really what helped me. I went from the state’s $231 to $831 a week. Which, frankly, is more than I was making from both jobs combined.”
Gullo, like McCullough and many other workers in the low-pay hospitality industry, is also receiving more money in unemployment than she would usually make. Gullo and McCullough said they were trying to take advantage of the opportunity to build a cushion of savings, given the unknown economic future of the businesses they work for.
“I need to amass as much as I can,” Gullo said. “The craziest part about that is when we come back to work in phase one, we’re not going back to work with our full time hours. Were going to be operating on skeleton crews. So I will be forced to go back to work, working probably one shift a week while losing unemployment.”
The Harrah’s employee was similarly nervous about returning to a job with an unknown future.
“If I go back to work and there’s no business, they’ll start laying people off. Then I’m out of a job and unemployment and I have to start all over again.”
Whether employees on reduced wages will lose their unemployment benefits differs from employee to employee, depending on what their benefits are and how much they’re getting paid. The Lens, as well as workers who spoke with The Lens, have had trouble getting clear answers from LWC. But McCullough believes that the Company Burger paychecks will kick him off the program since they’re larger than the $231 he receives in weekly benefits.
McCullough will start receiving $333 a week from Company Burger, about 60 percent less than what he gets through unemployment.
“The pay was not very much. But it was just enough, in my case, to disqualify me for unemployment,” he said. “So it kind of left me with no choice. If I turn this down they’re required to report me.”
It’s unclear, however, in what cases workers will be kicked off unemployment benefits if they refuse to go to work. Unemployment eligibility has been expanded due to the coronavirus crisis. Those who don’t meet the criteria for normal unemployment could be eligible for “pandemic unemployment assistance,” according to LWC.
According to a FAQ page on LWC’s website, this special assistance is available to people who aren’t working because they have the virus, are caring for someone with the virus, are taking care of kids as a result of school closures or have been instructed to quarantine by a medical professional. It also says you are eligible if “you had to quit your job as a direct result of COVID-19.”
The Lens asked LWC who, exactly, is covered under this broad category.
“This will be determined based on the facts surrounding the individual’s claim.” LWC’s public information office said in an emailed response. The agency gave the same answer when asked specifically about workers who are or live with someone who is immunocompromised.
“The scenarios you mentioned below while not unique to any individual, are impossible to determine which, if any, benefits a person may be entitled to without accompanying situational information,” a spokesperson said in a follow up email.
The “sweet spot” for collecting unemployment
When Gullo was talking to Cantrell on WBOK, the mayor gave some advice on how to return to work and still get unemployment benefits to save money for an uncertain future. She called it the “sweet spot.”
“There is a balance. If your employer reduces the amount of hours that you would have to work, then there’s a sweet spot where you can still get your unemployment insurance and not lose your job. But that is specific to your employer and working that out with the workforce. But that is an option.”
Residents receiving unemployment have to fill out weekly forms to update the state on their employment status. If people earn money that week, their weekly benefits are reduced. The $600 federal payments, however, stay the same as long as the individual is still eligible for any amount of weekly assistance.
If someone refuses to return to work, they could lose all their benefits. If they go back and their pay exceeds their weekly unemployment rate, they will lose their benefits. But in the “sweet spot” the Mayor talked about, an employer could pay their employees just below their weekly maximum in order to continue the $600 weekly payments.
McCullough said that while Company Burger didn’t offer that type of collaboration, other businesses are.
“I’ve also talked to friends of mine who have jobs in the service industry who’s employers have called them and said ‘look, we got this loan, 75 percent of it has to be dedicated to payroll, and so we have to pay out 75 percent of this to people. Now, what do we need to do to help you to be able to get you the CARES Act money.’ Because that’s what matters. The state unemployment doesn’t really do anything.”
But collaborating with employees to ensure they still get unemployment isn’t necessarily simple, according to Company Burger owner Adam Biderman. He told The Lens that the company was doing its best to understand new federal policies and get as much money and security to employees as possible.
“Dealing with this PPP, 100 percent it’s been to ensure the survivability of these businesses and making sure everyone still has a job,” he told The Lens. “We’re now being required to understand a policy on the fly that isn’t even set in stone and is still changing.”
He said he didn’t know about the “sweet spot” concept.
“It might be something that’s adjustable, I’m really not sure about that. That wasn’t even on my radar back then.”
He said that doing that could put his loan forgiveness at risk, changing the money from a grant into a loan that has to be paid back.
“That would in effect end my business, it was so scary going through all this,” he said.
The law, however, seems to account for this possibility. According to the law, if an employee’s salary is reduced, the portion of the loan that is forgivable is reduced by the same amount, meaning the employer has to pay that money back.
“Maybe I need to get better as an owner. What more could I have done? I intend to turn this into a self evaluation.”
McCullough said the key for employers is clear and open communication with employees.
“There seem to be two types of employers here,” McCullough said — those that are fielding decisions from the bottom up, and those that are making decisions for their employees from the top down. He said that while he didn’t think business owners were necessarily being malicious, they may still overlook the best options for their employees if there isn’t active and consistent communication with them.
“I know all these businesses are walking a thin rope here. Some of these businesses are on the verge of closing maybe permanently. So I don’t want to be someone who just paints all business owners as evil, capitalist, greedy people. But certainly, it doesn’t take much to take a little time and think about the wellbeing of your employees before you decide to reopen.”
He said that he had a much different experience with his second employer — Juan’s Flying Burrito.
“They sent out a questionnaire and said, ‘What are your ideas? What are things that would make you feel more comfortable going to work?’ ”
He said that more than just providing reassurance, the questionnaire spurred some constructive ideas. One of them was creating “squads” within the staff to ensure that when workers come in, they only see the same two or three people each time.
“Take a moment, do your due diligence as a business owner, and take some time and ask your employees hey what do you guys think? Do you feel safe? What can I do to make you feel safer because you’re coming in here and allowing my business run? After all we’re the ones that allow the business to make money.”