What is proper and generous?

[disneysteve]

The CARES funds will help many, but I don't see everything just snapping back. That's where I think we will see real carnage unfortunately. The relief package to small businesses is 10 weeks basically, but I think we could be looking at a soft business climate through the end of the year and beyond. Just trying to be realistic. I would love, however, to see a sharp V-shaped recovery!

I think you're right. I think we're going to see sustained higher unemployment as many jobs lost to COVID don't come back. Personal and business bankruptcies will rise. Lots of business closures. There will be a long-lasting impact to this pandemic.

[greenskeeper]

I did some checking last night about population densities of various cities. NYC has a population density of over 27,000 people per square mile. That equates to about 1,100 square feet of free space per person, indoors and outdoors combined. Not much room.

Where I live, we have a population density of about 2,200 people per square mile. That equates to approximately 13,500 square feet of free space per person. That’s almost one third of an acre per person.

Oklahoma City, a quite large MSA, has a population density of only 967 people per square mile! Every man, woman, and child has 3/4 of an acre!

COVID (and other pandemics) are going to hit harder where folks don’t have free space.

Does the NY figure factor in high rises or just land area

[Fishindude77]

I'm optimistic that things will snap back pretty quickly. Things were going pretty good when this thing hit and there should be a lot of pent up demand. Things like manufacturing and construction should ramp back up full speed soon as they are allowed and they will likely be in a big hurry to get caught back up, resulting in overtime, hiring, etc. Agriculture and all it's related entities never slowed down and will keep chugging along, it's nearly planting season in the big AG areas.

I do agree that a whole lot of little restaurants, bars and small mom & pop service industries will probably sink, but that stuff was too competitive and over populated anyway. Maybe the survivors will be able to make a bit more money now.

[TexasHusker]

Does the NY figure factor in high rises or just land area

land area/sq miles. The only way you can get that many people together in a square mile is to put them on top of one another. Of course, you can't reasonably social distance for any period of time under those conditions. That's why NYC is completely blowing up. Just think about all of the recirculated air in those high rise apartments. As resilient as COVID is, you can bet that it is circulating around those buildings with ease.

[TexasHusker]

Back on topic here, how about some opinions on "how" my team should be compensated? Is it fair that an employee who has been on the job one week be paid on an equal scale as someone who has been on for a year? 3 years? 5 years?

[kork13]

Back on topic here, how about some opinions on "how" my team should be compensated? Is it fair that an employee who has been on the job one week be paid on an equal scale as someone who has been on for a year? 3 years? 5 years?

Do you normally adjust your employees' pay for seniority?
- If so, then their existing pay scales are likely already adjusted as such, and you can just give them your desired percentage of their typical pay.
- If not, then why would you start now?

[disneysteve]

Back on topic here, how about some opinions on "how" my team should be compensated? Is it fair that an employee who has been on the job one week be paid on an equal scale as someone who has been on for a year? 3 years? 5 years?

Yes. If you're going to continue paying them, you continue paying them - all of them. The folks who have been there longer are paid more, aren't they? So they'll get more during this time. Those who started more recently and are lower on the pay earn less so they'll get less.

Have you looked into the stimulus terms and expanded unemployment benefits? I would certainly want to know if they would make just as much (and maybe even more) if they filed for benefits. If they wouldn't be losing anything significant by collecting unemployment, I'd still likely go that route.

[TexasHusker]

I should clarify: All of my employees earn between 10 and 15 dollars an hour, plus tips. Tips are a huge part of their income, and we want to not only pay their wage but try to come up with a formula for tips. So that's where the discretionary part comes in.

Steve it is going to be extremely hard to find good help for positions we have to fill, because unemployment benefits could easily exceed what they earn working a job. In Texas, your unemployment could be as high as $1000 per week - $52,000 per year. Now that's supposed to end in 4 months, but we all know how that goes - Congress will extend it for a year, etc. So you want to keep your employees, but good luck with that - there will be huge competition to lure those on unemployment back into the workforce. This is the ol' government tampering with the free markets deal again.

That's a tough pill to swallow. We aren't going to have ability to raise prices, because incomes are out the window for a lot of our customers. I'm not quite sure where the end game is on all of this. We will have to adjust to the new normal like everyone else and move on.

[disneysteve]

I should clarify: All of my employees earn between 10 and 15 dollars an hour, plus tips. Tips are a huge part of their income, and we want to not only pay their wage but try to come up with a formula for tips. So that's where the discretionary part comes in.

Steve it is going to be extremely hard to find good help for positions we have to fill, because unemployment benefits could easily exceed what they earn working a job. In Texas, your unemployment could be as high as $1000 per week - $52,000 per year.

Do you know, or at least have a pretty good idea, of how much they each earn in tips? Do the more established folks get more in tips typically? If so, use that as your guide. If not, and tips are pretty much the same across the board, then base it on that.

If they would earn more on unemployment, I'm not sure how you are helping them by not laying them off and letting them collect for however long the shutdown lasts. If I was an employee, I'd probably be pretty upset in that situation. I understand that you're concerned they may not come back, but maybe instead of paying them throughout the shutdown, set that money aside and use it as return bonuses for everyone who comes back, or something like that. That way, you spend the same amount or less and they actually end up earning more and have an added incentive to return.

[TexasHusker]

Do you know, or at least have a pretty good idea, of how much they each earn in tips? Do the more established folks get more in tips typically? If so, use that as your guide. If not, and tips are pretty much the same across the board, then base it on that.

If they would earn more on unemployment, I'm not sure how you are helping them by not laying them off and letting them collect for however long the shutdown lasts. If I was an employee, I'd probably be pretty upset in that situation. I understand that you're concerned they may not come back, but maybe instead of paying them throughout the shutdown, set that money aside and use it as return bonuses for everyone who comes back, or something like that. That way, you spend the same amount or less and they actually end up earning more and have an added incentive to return.

The goal of the Federal government, through the stimulus bill, is to keep people employed, which is why the Treasury is offering forgivable loans to businesses that keep folks on the payroll. The last thing we need in this country are tens of millions of unemployed by choice. And if I lay them off, they will feel like I've dumped them regardless of the benefit. What loyalty are they going to have to me? It will take years to rehire good talent and develop a new culture.

Employers are really in a hard spot on this. There is no easy answer.

[disneysteve]

If your employees like their job and understand why you laid them off, I think they’ll be just as loyal as they are now, maybe even more so.

My daughter was laid off. She totally understands it was for her benefit. She loves her job and can’t wait to get back to it. I know numerous other people who have been laid off. Not a single one of them is upset by that decision. They’re grateful that they can now collect benefits and they all 100% plan to return to the jobs as soon as they can.

There is another option (isn’t there always). You could pay them for reduced hours, like 50%, and let them collect partial unemployment. Some medical practices here have done that. They cut the 40 hr folks to 28 hrs so they keep their benefits but allowed them to collect partial unemployment too.

[disneysteve]

Why are you afraid they won’t come back? Is your pay competitive? Something keeps them there now, doesn’t it? Why wouldn’t they want to return?

[TexasHusker]

Why are you afraid they won’t come back? Is your pay competitive? Something keeps them there now, doesn’t it? Why wouldn’t they want to return?

I don't want our team members tossed onto the unemployment rolls. We can weather this together. We don't need the Coronavirus to destroy the businesses that we have spent years building and placing people on unemployment. That isn't accomplishing anything for anybody.

[kork13]

I should clarify: All of my employees earn between 10 and 15 dollars an hour, plus tips. Tips are a huge part of their income, and we want to not only pay their wage but try to come up with a formula for tips. So that's where the discretionary part comes in.

That definitely makes more sense...thanks

Do you know, or at least have a pretty good idea, of how much they each earn in tips? Do the more established folks get more in tips typically? If so, use that as your guide. If not, and tips are pretty much the same across the board, then base it on that.

I'm very much a data-driven mind, so I'd agree with Steve -- if you know roughly what each individual earns (on average) in tips, I'd just use those figures as your baseline for what you're going to give them. Lacking the detailed information for each employee.... You basically have to guess.

However, I wouldn't necessarily dismiss out of hand Steve's suggestion of layoffs with "return bonuses". You could layoff your folks, with the promise (in writing) of an $X,000 "return bonus" for those who come back immediately upon the shop re-opening, and they can collect unemployment in the interim. That may end up being better for them, and less costly for your as well. You run hair salons/barber shops, right? Most hairdressers are heavily reliant on their regular clients, so I'd bet that many of them would prefer not to lose their established client base. If they don't come back, they'd have to start from scratch to rebuild their clients. You might even highlight your desire to preserve the exceptional culture everyone has worked to build, as well as to help them preserve their client lists. Trust them to stay loyal to you & offer generous incentives/enticements to return -- You clearly treat them well, and I think you might be surprised by the number of folks that will come back.

[kork13]

Why are you afraid they won’t come back? Is your pay competitive? Something keeps them there now, doesn’t it? Why wouldn’t they want to return?

I don't want our team members tossed onto the unemployment rolls. We can weather this together. We don't need the Coronavirus to destroy the businesses that we have spent years building and placing people on unemployment. That isn't accomplishing anything for anybody.

You don't seem to be answering Steve's questions... I agree that you may need to do some introspection & figure out what's motivating you, as well as what would motivate them to stay/return.

I gather that you clearly you want to do this out of adherence to personal/business principles that you fervently believe. I deeply respect and appreciate that fact, and I don't mean to offend those principles in the slightest.... But if you're going to elect to do something that is less financially advantageous for both you & them by following those principles, I'm confused why you'd be complaining about it & laying the outcomes at the feet of society? Own your principled choices, or do what's best for everyone. Doesn't seem that you can really have it both ways. (acknowledge that I may be misunderstanding the circumstances.... if so, my apologies)