Florida Trend | Florida's Business Authority

How Florida businesses are responding to employees during the COVID-19 crisis

Many employers in Florida have stepped up during the coronavirus pandemic to take care of their employees, adding hazard pay and sick leave and keeping the paychecks coming for as long as possible amid economic turmoil. Others, whether because they lacked the financial resources or just the resolve, not so much.

“The true character of an employer comes out in the hardest of times, not the best of times,” says Miami labor attorney Mark Richard, whose firm represents dozens of collective-bargaining units across Florida, including teachers, doctors, nurses and flight attendants. He says the shutdown has revealed two types of employers: Those who looked for ways to avoid layoffs and furloughs during the early days of the pandemic and those who didn’t.

“I understand there are employers who are truly tapped, especially small businesses. But there’s going to be a time when we’re through this, and employees are going to remember the companies that fought like hell to treat people the best they could,” he says.

People First

Ernesto Lopes’ first course of action was to protect his employees and the working-class residents at his rental properties.

In early March, Miami-based AHS Residential was about to finalize nearly $40 million in land deals to develop a number of new apartment projects throughout the southeastern U.S., but the coronavirus pandemic upended its plans.

After COVID-19 was declared a national emergency on March 13, the firm’s CEO, Ernesto Lopes, began managing his risk and started negotiating with the land sellers to push back closing dates. This would allow him time — and cash — to weather the crisis without layoffs or furloughs, he says. Most sellers agreed to postpone the closings, and when a few sellers refused to reschedule, he walked away from the deals.

Founded in 2012, AHS develops, owns and operates apartment buildings marketed to working-class residents in Miami-Dade, Broward and Palm Beach counties. Rents for two-bedroom units start at $1,350 a month. AHS, a privately owned company with 180 employees, is able to hold down rents by using its own equity to finance projects and doing most things in-house, Lopes says. “We're vertically integrated. We do our own construction at cost," he says. Like most landlords, AHS makes money from collecting rents and fees.

“We have about 3,000 people living in our properties,” Lopes says. “We expect that many of them will lose their jobs or be significantly incapacitated to pay rents. In order to continue to pay our employees and not displace anyone from their home, we had to maintain liquidity.”

In mid-March, Lopes wrote to employees telling them to not worry about their job security and focus instead on their health and well-being and that of their families. All employees would continue to receive their full pay and health benefits for the next 90 days, or as long as the pandemic lasts, he said.

“To the best of our knowledge, we have not seen any confirmed cases of coronavirus among employees, subcontractors or residents. But as the impact of this crisis grows, we want to underline our commitment to you, our employees,” he wrote on March 16. “AHS will continue to pay all employee salaries, even in the event that the office, job sites and properties have to temporarily close.”

AHS, which does not receive any government subsidies, has six operational properties and another four under construction. The land deals represented a major expansion for AHS: Combined, they would allow for the construction of about 4,000 apartment units in Florida, Georgia and Texas.

“There’s a huge need for what we do,” Lopes says. “There are very few companies delivering new units geared toward families making anywhere from $35,000 to $75,000 a year.”

In addition to job security for its employees, AHS offered its renters a grace period of several months to skip paying rent without penalty, allowing them to stay in their apartments and repay over time once they’re able. The company also waived late fees and gave tenants who paid on time a 7% rent reduction. By late April, about 200 of the company’s 1,100 renters had fallen behind on rent, Lopes says. Several tenants also had contracted the virus.

“Our residents are hardworking, responsible citizens. They’re just being hit by this like everyone else,” he says. “The last thing we want is for them to worry that they’re not going to have a roof over their head.”

As an “essential” industry, construction continues to move forward for AHS, Lopes says. But given the uncertainty around the pandemic, the company has halted the start of new construction and pushed back project completion dates. In April, AHS applied for a federal loan under the government’s coronavirus relief package to help meet payroll. Meanwhile, it temporarily closed its corporate office and asked employees to work from home.

“Everyone has kids, dogs and people to care for, so we’re being understanding and trying to schedule meetings when everyone is available,” he says. “I think we’re working harder than we thought we would, and maybe more than we would have if we were in the office. Everyone is in this together; everyone is committed. In that sense, it’s been a wonderful experience.”

Edwin Alvarez, the property manager at Village at Lake Worth, an AHSowned development with 216 units in Palm Beach County, says he’s relieved to know he won’t lose his job because of the pandemic. Alvarez, 36, supports his wife and young son on his salary.

“I was a bit concerned. We were all very happy when (Lopes) put that statement out there without even being asked,” Alvarez says. “AHS has made me feel 100% secure.”

Publix, Southeastern Grocers

Lakeland-based Publix provided two weeks of additional paid sick leave for employees directly affected by the coronavirus. While not the only one to do so, Publix was more expansive in its eligibility criteria than some of its competitors. In addition to infected or self-quarantined employees, the new benefit was extended to employees who showed symptoms of COVID-19 but had not been diagnosed, as well as those caring for someone with the virus. By comparison, Kroger and Amazon-owned Whole Foods expanded paid sick leave only for workers diagnosed with the virus or placed into quarantine. Jacksonville-based Southeastern Grocers, parent company of BI-LO, Fresco y Mas, Harveys Supermarket and Winn-Dixie, held a designated shopping hour for health care professionals and first responders and, in a surprise move, picked up the shoppers' grocery tabs.

Publix installed plexiglass shields at cash registers, service counters and pharmacies to make its stores safer for customers and employees. The chain, however, drew criticism for not requiring or allowing its workers to wear masks earlier. Other measures included more frequent cleaning of high-touch surfaces such as carts and door handles, reduced store hours to allow extra time for cleaning and designated shopping hours for seniors.

Theme Parks

After closing its theme parks indefinitely in mid-March, Walt Disney World held off on staff cuts for a month, paying workers while they stayed at home. In a negotiated agreement with the Service Trades Council Union, Disney began furloughing about 43,000 employees in mid-April. They won’t get paid while on furlough but will keep their medical, dental and life insurance benefits. Likewise, Universal Orlando Resort and Universal Studios paid full-time employees at 100% until April 19, when most workers had their workload and pay reduced to 80%. Part-time hourly employees were furloughed beginning in early May.

Darden Restaurants

In March, Orlando-based Darden added paid sick leave for hourly employees at its 1,800 restaurants. Darden, whose brands include Olive Garden and Longhorn Steakhouse, also offered emergency pay to employees who couldn't work as many hours or shifts as usual because of lockdowns and shelter-in-place orders. In an earnings call, Darden President and CEO Gene Lee said the emergency pay would cover hourly employees for two weeks at restaurants that were closed, had their capacity restricted or been ordered to offer takeout and delivery only. Additionally, Darden canceled its quarterly dividend and plans to fully draw down a $750-million credit line.

Seacoast Bank

Many employees of Stuart-based Seacoast Bank began working from home in March. But not everyone could do that, prompting the bank's management to give "relief" bonuses of up to $1,000 each to hourly employees whose work still required them to come into the office everyday. “These bonuses will be granted to eligible associates to recognize the sacrifices they continue to make in order to serve our customers,” Seacoast Chairman and CEO Dennis Hudson wrote in a March 26 e-mail to employees. Seacoast made a profit of $98.7 million last year, up from $67.3 million in 2018.

Jackson Health System

In early April, Miami's public health network announced pay cuts and furloughs for non-clinical workers. Jackson Health CEO Carlos Migoya said executives and managers would take a pay cut of up to 20% and furloughed employees would see their hours and salaries reduced by up to 40% to help offset the financial impact of a halt in elective surgeries and other non-emergency care. A week later, however, Migoya walked back his plans to furlough staff after backlash from county commissioners, who gave preliminary approval for Jackson to seek a $150-million line of credit. Migoya said the planned furloughs were “deferred indefinitely.” Joe Arriola, chairman of the Jackson Health board, told the Miami Herald it wasn’t fair to ask hospital workers to lose pay during the pandemic when they’re being called on to lead the response. "How can I not defend them at this time?”

Sinclair Broadcast Group

While some regional sports networks continued to pay their game producers, camera operators and other freelancers for at least some missed work during the shutdown, Maryland-based Sinclair Broadcast Group offered members of the freelance crews who broadcast Tampa Bay Lightning and Rays games via Fox Sports "only a $2,500 loan — interest-free, but on an aggressive repayment schedule of $250 for each of the first 10 games worked when sports do resume," the Tampa Bay Times reported. Replay operator Greg Bryant, who, like other freelancers, is paid on a per-game basis with no health insurance, criticized the loan program as not helpful, telling the Times that it “basically makes the freelancer an indentured servant ... when sports do come back around.”

World Wrestling Entertainment

Two days after state officials declared WWE an essential business, allowing it to put on live shows without an audience, WWE — run by billionaire Vince McMahon — laid off dozens of wrestlers, producers and other employees. The layoffs were estimated to save more than $8 million a year. Critics argue that the layoffs could have been avoided, however, pointing to WWE’s deep reserves. As of December, the company, which operates a training facility in Orlando, had about $90 million in cash on hand. Additionally, WWE decided to keep its regular quarterly dividend and will pay out more than $9 million to shareholders in June.

Crocker Partners

Boca Raton-based Crocker Partners, a commercial real estate owner and manager with 175 employees, gave its engineers and maintenance staff a 20% pay increase to continue working on site during the pandemic. The company sent other employees home to work, assuring them that their jobs and salaries were secure.

Migrant Farmworkers

Aside from layoffs, furloughs and pay cuts, the pandemic has led to new concerns about worker safety, whether it's contract FedEx drivers delivering packages without personal protective gear or teachers required to show up to their school buildings despite being able to do online instruction at home. Florida’s migrant farmworkers — deemed essential for their work in keeping the food supply chain going — are especially vulnerable in the event of an outbreak, advocates say, noting that most live in tight quarters, get no paid time off or health insurance, and go to work without gloves, hand sanitizer or space between them in the field.

A Surge in Job Losses

Like all states, Florida has experienced an unprecedented rise in layoffs.

Shortly after social distancing and other related measures took effect in March, the number of Floridians who reported losing their jobs skyrocketed — from 5,500 a week, on average, in January and February to more than 228,000 during the week of March 22-28, far and away the largest weekly total since the Labor Department began tracking the data in 1986. For context, the worst week of the Great Recession saw about 40,400 laid-off Floridians file unemployment insurance claims.

“Typically, unemployment is a lagging indicator that gradually increases when an economy is going into recession, and this was just instantaneous,” says Sean Snaith, an economist at the University of Central Florida. “We turned the lights out on large swaths of the economy.”

Snaith, who heads UCF’s Institute for Economic Forecasting, predicts that jobless claims will remain high through the fall, with the unemployment rate jumping to double digits from an all-time low of 2.8% in February. The depth and duration of the economic downturn largely will depend on when things return to normal and what the new normal looks like.

Hospitality and tourism-related businesses, both large and small, could take a long time to recover, he says, adding that until there’s a vaccine or drug therapy for COVID-19, many people will be reluctant to go to theme parks and malls, board airplanes and cruise ships and eat out in restaurants. “I don’t think we’ll get back immediately to 100 million visitors a year to Florida,” he says.

Indeed, Florida’s reliance on tourism makes it especially susceptible to a pandemic-induced recession, but the state’s strong economy before the coronavirus should help it weather the crisis. “Like a healthy person who gets the virus, the impact might not be as severe as it would’ve been if Florida’s economy had been teetering,” he says.


Read more in Florida Trend's June issue.
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