Change Labor Day So Employee Receives Unemployment

morrisg

I live in Alabama, and my boss wants us to pay our employees early for the Labor Day holiday so that the income they receive will not effect their unemployment. They will be laid off the labor day week, but would normally receive one day pay for the holiday. Their holiday pay is enough to knock them out of any unemployment.

Is paying in another week legal in order to receive unemployment. We would officially notify the employees that labor day would be observed on another day since the law says unemployment is based on when it is earned, not paid.

Holly Jones

My gut reaction is that I just wouldn't risk it.

Despite the well-meaning intent and the "official" notification on paper that Labor Day would be observed on another day, the crux of the plan still feels like a scheme to alter the payment of unemployment benefits, which could be deemed fraudulent. I think this is especially true if your company has a long-standing policy of observing Labor Day on the actual day and giving holiday pay for that day. Labor Day being what it is, there's not much logical reason to observe it on a different day (e.g., the actual holiday fell on a weekend).

Unfortunately, I don't think there's going to be anything in the black and white letter of the law that expressly signs off on a plan like this.

With all of this said, this is just my careful self speaking. Some of the HR pros here might have some practical insight or some creative suggestions for working out this situation with your employees, but legally I'm just a little leery of it.

ACU Frank

Would it be possible and/or advisable to lay them off prior to Labor Day, but pay them a "bonus" the week before?

davids

Unless your state has a law specifying when holidays have to be recognized and paid, there is probably no regulation that would prohibit you from making August 31 (or any other day) a paid day off; or prevents you from giving your employees a bonus before the layoff. Additionally, unless you have a collective bargaining agreement or otherwise established Labor Day as a paid holiday, you don't have to provide holiday pay. So... I think you could accomplish what you want to do. I would just not characterize it as pay for Labor Day.