Times are tough for many people right now. The auto industry in the US has been shut down for approximately two months due to coronavirus, affecting hundreds of thousands of employees both directly connected to automakers, and those in the supply chain. Federal unemployment benefits have helped, and contracts with the United Autoworkers Union (UAW) also exist at the Detroit Three to provide unemployment paychecks as a supplement to benefits. However, it appears Fiat Chrysler Automobiles is now wanting to take back some of the benefits it paid out.
The information comes from The Detroit News, which claims it obtained a letter allegedly explaining the situation. Apparently, FCA sent supplemental unemployment payments for two weeks until the federal unemployment payments kicked in. However, the federal payment was made retroactive, so it ultimately covered employees for both weeks over and above FCA’s checks.
The report says approximately 24,000 FCA employees are now being asked to repay an average of $500 in supplemental unemployment income, with options ranging from a lump payment to $100 being deducted from weekly checks until the payback is complete. Some basic math tells us the total amount FCA seeks to recoup is around $12 million.
The situation is sticky because FCA did what it was contractually obligated to do. The UAW contract reportedly stipulates that workers temporarily laid off will receive 74 percent of their normal weekly income in a supplemental fashion. The first week of plant closures, that payment was made properly since federal unemployment hadn’t kicked in.
Assistance from the federal coronavirus relief act started on the second week, at the same time FCA’s second payment to employees went out. The federal payments reportedly equal or exceed the 74-percent requirement in the contract, so no further supplemental payments from FCA were required. But the automaker still issued the payments, as per its contract.
Is it right to have workers pay back that money? Does the overlap error fall to the federal program instead of FCA’s financial team? The report further states that neither Ford nor are seeking repayments from their employees, claiming that once federal payments started, both automakers simply ceased their supplemental checks. As you can imagine, at least some FCA employees are not happy about the situation.
Automaker plants are slowly beginning to come alive as the US tries to reopen its businesses. The coronavirus pandemic is far from over, however, with Ford already having three COVID-19-related closures within two days of restarting operations.