Preventing COVID-19 Generated Family Financial Instability

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Social distancing has caused businesses to close or curtail their services to slow the spread of COVID-19. Employees of non-essential services, such as restaurants and retail stores, in turn are losing their jobs or experiencing a drastic reduction in payThese employees are already straining to make ends meet because they are more likely to earn hourly wages and lack benefits such as healthcare or paid sick leave.  

Before this pandemic, 40% of Americans could not cover a $400 emergency. Pay cuts and job losses without a social safety net will hinder residents from taking the necessary precautions, including staying home when sick or even purchasing extra groceries. Meanwhile, bills continue to pile up. When an employer closes its doors, leaving employees without a paycheck, the financial and social burden falls disproportionately on single parent households and people of color, who are more likely to earn hourly wages.  

City leaders can take steps to prevent further financial instability for families during this unprecedented time. This will not only support their residents during the crisis, it will also position the city for the economic recovery after the pandemic abates.  

Cities (often the largest employer in an area) can act as model employers by offering paid sick leave when employees, including part-time workers, are unable to work due to illness. This is especially critical during this time where social distancing recommendations, self-quarantine, and shelter-in-place orders are in effect for the benefit of the public’s health 

  • Cities can require businesses to offer a minimum of 14 days of paid sick leave and waive the documentation requirement to reduce the burden on doctors offices. The 23 cities with paid sick leave should review existing laws to ensure that they cover a minimum of 14 days of paid sick leave for all employees, full and part-time.  
  • Employers with 10 or more employees may cap an employee’s sick time balance at 72 hours. Employers with fewer than 10 employees may cap an employee’s sick time balance at 40 hours.   
  • Remove requirements for residents to show proof of illness (often a letter from their doctor confirming their illness) to ensure workers can comply with public health recommendations to stay home and reduce spread of the pandemic.  
  • Proactively monitor and enforce paid sick leave laws by sector.  
  • Communicate paid sick leave law updates to the public through news outlets, texting and community groups. Using social media platforms, like Facebook, cities can target advertisements to both employers and workers to ensure the message is received. 
  • A Better Balance provides key policy elements on emergency paid sick leave during a public health emergency.
  • Minneapolis, MN requires businesses to pay employee’s sick leave and enforces it through the city’s Labor Standards Division.  
  • San Francisco, CA already requires employers to provide paid sick leave to all employees (including temporary and part-time employees) who work in San Francisco. In response to this epidemic, Mayor London Breed set aside $10 million to help those impacted, including gig workers, and the city will pay for five additional sick days for private-sector workers. 
  • Washington, DC’s recent legislation expands the city’s Family Medical Leave Act to cover those impacted by the virus.  
  • The Greater New Orleans Foundation has activated a disaster response and restoration fund to meet the needs of gig economy workers directly affected by COVID-19 crisis.  

For employers during this public health crisis, if fair workweek ordinances (10-14 days advance notice of an employee’s shift schedule and requirements for minimum resting hours between shifts) protections are in effect and enforced, the city does not need to enforce predictable pay laws (cancellations of a shift or schedule without advanced notice will require the employer to pay the employee the regular wage rate).  

Increase outreach efforts via social media or through partnerships to ensure that residents are aware of federal benefits including TANF, Medicaid, SNAP and WIC, and understand the enrollment and recertification process. 

  • The state of Maryland has announced that all licenses, permits, registrations and other state authorizations will be extended until 30 days after the end of the state of emergency. If your state hasn’t issued this guidance to help those that already have benefits, work with your state to ensure that their announcement includes certifications for public assistance programs. 

When possible, expedite residents’ enrollment in state unemployment supports and other supports after a layoff through strategic outreach with businesses and community groups. In states where applicable, understand and publicize workshare programs to reduce overall unemployment. 

Work with nonprofit providers to help them increase their virtual capacity to provide services from benefits enrollment to financial supports. 

Provide funding and/or safe venues for affordable emergency childcare for essential service providers, including first responders, medical personnel, grocery store staff and janitors. 

  • The Rogue Valley YMCA in Medford, OR is providing a safe space for children of medical workers, and parents facing financial or medical hardships. 

Provide grab-and-go and mobile breakfast and lunch meals for youth in outdoor public spaces through collaboration with local partners and school boards. 

  • While schools are out of session in Buffalo, NY, youth can grab free breakfast and lunch at Buffalo Public Schools, regardless of the school they attend. 

When possible, consider halting city collection practices, such as parking violations, towing, and disconnecting utilities for non-paymentto alleviate the financial strain on parents and allow access to essential services regardless of account status. Ensure that non-payment of fines and fees, including interest, are waived during this time to prevent the increase of residents’ debt to the city. 

  • The State of Maine vacated outstanding warrants for unpaid fines and fees including those associated with: restitution, court-appointed counsel fees, failure to appear for unpaid fine hearings 
  • The Department of Water Management in Durham, NC suspended all water disconnections due to non-payment as of March 9, 2020, to ensure that residents have access to water resources. 
  • On March 9, Detroit, MI officials, in partnership with the Governor, announced the restoration of water service to all Detroit residents through an assistance program and payment plan titled, ‘Coronavirus Water Restart Plan. 

Prohibit evictions for non-payment of rent from both residential and commercial tenants (including nonprofits) to enable families and businesses to remain in place. Suspend foreclosure processes to avoid residents’ loss of their home during this crisis.  

Increase residents’ awareness of potential predatory financial actors that may exploit this crisis, such as false claims of disaster benefits. Inform residents about local and federal consumer protection laws and best practices and ways to report potential scammers.  The resources available through Consumer Financial Protection Bureau can help residents navigate benefits available to them, prevent fraud and negotiate payments to lenders. 

Think of parents as a constituency group and hold virtual conversations to learn more about the barriers and challenges they face and move towards solutions, particularly for lower income earning families. Reach out to key partners such as community organizations, workforce investment boards and foundations to start conversations about resident’s needs to resolve the obstacles now and in the future. 

About the Authors:

Patrick Hain small

Patrick Hain is the Program Manager for Financial Empowerment in the NLC Institute for Youth, Education, and Families.

 

 

Courtney CoffinCourtney Coffin is the Senior Associate for Economic Opportunity and Financial Empowerment in the NLC Institute for Youth, Education, and Families.