COVID-19: Layoff Aversion Fund for Small Businesses

The COVID-19 Layoff Aversion Fund, launched by Governor Larry Hogan and the Department of Labor (DOL), awards funds to small businesses to mitigate the economic stress caused by the COVID-19 pandemic, minimizing the need for layoffs and unemployment.  A small business could be awarded up to $50,000.

In order to qualify for an award, a business must have less than 500 employees based within the State of Maryland, must be up to date on unemployment taxes, must be a business in good standing, and must demonstrate the need for funding as a result of the COVID-19 pandemic.  The funds must be used to reduce or eliminate the need for layoffs.  For example, the funds may be used to cover the cost of equipment (such as computers, printers, and software) to allow employees to work remotely, to cover the cost of liability insurance for restaurants that convert to delivery services during the pandemic, to cover the cost of cleaning and sanitation supplies if frequent deep cleaning is necessary to prevent exposure to COVID-19 for employees that remain on-site, and for other creative approaches and strategies used by small businesses to reduce or eliminate the need for layoffs.  The funds may not be used to cover rent.  The funds may only be used to cover employee wages and benefits if the employer has been approved for the Unemployment Insurance Work Sharing Program.

The Unemployment Insurance Work Sharing Program (the “Work Sharing Program”) is a voluntary program that provides an alternative to layoffs for employers faced with a decline in business due to the state of the economy.  The Work Sharing Program allows an employer to retain an employee group by reducing that group’s hours during times of economic hardship.  The employees whose hours are reduced receive partial unemployment benefits to supplement wages lost by the reduction in work hours.  When business improves, the employee group returns to full-time work.  Both the employer and employees must develop and agree to the conditions of Work Sharing.  For more information on the Work Sharing Program, contact ui.worksharing@maryland.gov.  An FAQ is available here.

The DOL is accepting applications for the Layoff Aversion Fund now through 30 days after the expiration of the State of Emergency.  Applications are reviewed and accepted on a first-come, first-served basis and the awards are subject to availability.  Applications can be found here and submitted to LaborCOVID19.layoffaversion@maryland.gov.  The DOL vows to process applications within two business days of receipt and, upon approval and receipt of a signed contract, the funds will be expedited.

For more information on this and other business issues related to COVID-19, contact Keri Kemmerzell.

This has been prepared by Tydings for informational purposes only and does not constitute legal advice.