The change comes amid concerns that accepting money from program could make affected employees ineligible for unemployment benefits.
Paradigm extended a deadline on Monday (April 13) that will allow furloughed employees more time to opt in to a relief fund the agency created to support its more than 200 employees laid off on March 20. This follows growing concerns that accepting money from the program could make affected employees ineligible for unemployment benefits.
Two weeks after implementing furloughs and pay cuts in a company-wide call, agency chairman and CEO Sam Gores announced last week that he was setting up a $1.1 million relief fund for those affected. The deadline for laid off employees to decide whether or not to accept the money was originally Monday, but fearing that taking the approximately $4,400 set aside for each employee might make them ineligible for unemployment benefits, employees asked for an extension and were granted one late in the day.
Paradigm employees now have until April 28 to accept the funds and determine if accepting the money will impact their ability to receive benefits.
“This is a real tragedy for assistants and entry-level employees who are running out of money and are panicking,” said one former employee. Paradigm did not offer severance pay when it enacted the layoffs and initially only provided health insurance through the end of April before extending coverage through June.
A Paradigm spokesperson issued the following statement to Billboard: “Based on feedback from our temporarily laid off employees who have been unable to quickly confirm their eligibility to receive Employee Relief Funds with their local unemployment office, Paradigm has made the decision at the request of its employees to delay disbursement of payments from its $1.1 million fund until May 1, 2020. This delay should give any temporarily laid off employee the opportunity to make the decision that is right for them.
“Paradigm has and will continue to consult with outside legal and accounting counsel on this matter. Unfortunately, it was told there is no precedent for what employers are currently experiencing with respect to this pandemic and thus, there no guarantees. Each state has different rules and in some states, the rules vary by each individual’s situation. Paradigm’s HR team will continue to be available to assist employees, as they can.”
Because employees are furloughed and still technically employed — instead of being laid off — several have been advised that the relief fund money could be seen as income and violate state unemployment law. When employees asked Paradigm for clarity on how their state would view the payments, they were sent a list of phone numbers and websites and told to contact their state’s unemployment office for more information.
“Giving employees a list of phone numbers to call is not enough,” says San Francisco attorney Michael Seville with the law firm Seville Briggs, which specializes in employment and criminal law. “Employers have resources their employees don’t and they need to make the process as easy as possible.”