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Laid-off workers are getting bad severance packages, and worse communication, from their employers

Those in hospitality and retail are being hit the hardest as America’s coronavirus crisis deepens.

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For seven years, Mike worked as a bellhop at a Marriott hotel in Florida. “I had one of the best jobs ever,” Mike, who asked to be referred to by a pseudonym because he fears retribution from his employer, told Vox. That all changed last week, when he and tens of thousands of other Marriott workers abruptly lost their jobs.

The hotel conglomerate, which operates more than 6,900 properties worldwide, is one of many companies that has reduced its workforce in response to the coronavirus. Mike isn’t surprised he lost his job — if there’s one thing people likely aren’t doing amid a pandemic, it’s going on vacation — but he doesn’t agree with the way Marriott went about it.

In an average year, Mike makes about $60,000, much of which comes from tips. He’s received just one week of severance pay despite his seven years on the job, calculated using his base pay instead of his tipped wage. “It’s distasteful, disrespectful, and disappointing,” he said. “Marriott’s creed is ‘Take care of our employees so they take care of our guests,’ and they’re not really living that.”

A Marriott spokesperson clarified that no one had technically been laid off, but that tens of thousands of workers were being furloughed indefinitely. The company declined to tell Vox how much severance workers would receive, but an internal email sent to some employees says that full-time employees would receive 40 hours of pay while part-timers would get half that.

Hundreds of thousands of people are in a similar position, or may be soon. More than 3 million people filed for unemployment last week, according to data from the Department of Labor. It’s possible that millions more will soon lose their jobs. The hospitality industry is particularly vulnerable: The American Hotel & Lodging Association, a lobbying group for the industry, warns that 44 percent of hotel employees in the US could be laid off or furloughed because of the virus.

For workers like Mike, the problem isn’t just a loss of income, it’s how employers are structuring severance packages and communicating about furloughs and layoffs.

In Houston, workers at the dining room of the Post Oak Hotel — which is owned by billionaire Tilman Fertitta, the CEO of the restaurant conglomerate Landry’s — were reportedly told they wouldn’t be able to get their sick days or other time off paid out to make up for lost hours while the restaurant was closed for eat-in service. The hotel then backtracked, telling the Houston Chronicle that employees would be able to use their paid time off.

The Starr Restaurant Group in Philadelphia, which also placed its workers on indefinite furlough, similarly told employees they wouldn’t be able to use vacation or sick days to keep getting paid after the restaurants shut down. A Starr representative later told Eater Philadelphia that the restaurant group was in the process of paying out “hundreds of thousands of dollars” in sick leave.

The problem isn’t limited to restaurants and hotels. Last week, the president and CEO of Cirque du Soleil laid off 95 percent of the entertainment company’s staff via video, Jezebel reports. “I wish I had a chance to speak to you in person,” CEO Daniel Lamarre said in the video. “Unfortunately, given the current pandemic, a video was the best option for me to speak to all of you at the same time, and most importantly, protect your health.”

Full-time workers will have health insurance coverage for up to six months, but most won’t be able to use their accrued paid time off if they want to receive unemployment. According to the Jezebel report, workers asked if they would have their PTO paid out and were told no, because that would mean they had “quit” and wouldn’t qualify for unemployment benefits. (Cirque du Soleil didn’t respond to The Goods’ request for comment.)

Retailers are also shutting down operations across the country, leaving thousands of people without work; even direct-to-consumer brands that primarily fulfill orders online are feeling the squeeze. Everlane and Glossier closed their physical retail locations, though both brands said workers would be compensated until the stores opened again. Workers at other direct-to-consumer brands, however, say they were let go without notice or severance.

ThirdLove, a bra brand that trades on its feminist messaging and was previously investigated by Vox, laid off the entire retail staff for its New York pop-up without any notice, a person with knowledge of the situation said. The staffers initially weren’t offered severance and didn’t even get a phone call, said the source, who spoke to Vox on condition of anonymity.

“They said online they offered severance and benefits to the team,” the source said, noting the company also posted this information on Instagram, “but they hadn’t actually formally communicated anything to the team.” The source said some staffers posted about the disparity between ThirdLove’s public statement and their experience on social media, but those posts now appear to have been deleted.

“It definitely felt like the post they did was only because they were worried about the tweets and stuff becoming a thing,” the source said. “Two weeks [of payroll] shouldn’t bankrupt the company. It just seems like they’re behaving poorly.”

A ThirdLove spokesperson said around 10 people were affected by the layoffs, and that the brand chose to let each person know individually rather than in a larger meeting. ThirdLove CEO Heidi Zak told The Goods all laid-off retail staffers were offered severance, but didn’t clarify how much.

Workers at more established retailers aren’t safe from layoffs, either. New York City’s famous Strand bookstore laid off 188 employees, who reportedly received severance and had their vacation and sick time paid out. Powell’s, an Oregon-based bookstore, also laid off most of its staff. Oregon Live reports that employees were told their health insurance would only cover them until the end of the month they were last employed. If a worker was laid off on March 16, for example, they’d only be insured through March 31 — leaving them vulnerable during a particularly precarious time.

In a statement to Vox, ILWU Local 5, the union representing Powell’s employees, said it was “gravely disappointed” with the way the company handled the layoffs.

“While many other small businesses who are hurting have found ways to support and assist their staff during this time, reaching out to the greater community for support and ideas, the leader — arguably — of the independent bookselling world has so far done the bare minimum,” the union said. “The decision to lay workers off without reasonable provisions for their well-being will have a deep and lasting impact not only to them, but to the community at large. In this society, for any crisis event, it appears it is the workers who take the brunt of trauma.”

While laid-off and furloughed workers wonder how they’ll pay the bills in the middle of a global health crisis, the retail employees expected to continue showing up to work are dealing with a different, equally pressing problem: staying healthy.

Employees at Walmart and Target, both of which have been deemed essential businesses and are therefore allowed to stay open, told the Guardian their managers weren’t doing enough to protect them. “I’m 64 years old and according to the CDC, I should be staying home and practicing social distancing and in quarantine,” one Walmart employee told the paper. “So I go to work and pray that none of the hordes of shoppers I’m exposed to ... transmit it to me. The thing that scares me most is getting exposed and passing it to my 84-year-old mother.”

Walmart lets workers take unpaid time off, but for employees who can’t afford it, that policy is virtually meaningless. Target gives paid leave to workers over 65 and to those with underlying medical conditions — but new reports suggest that young, healthy people are increasingly falling sick with the coronavirus too.

Warehouse workers are also under pressure. Several Amazon warehouse workers told BuzzFeed News that the e-commerce company’s fulfillment centers aren’t properly equipped with cleaning supplies like hand sanitizer and disinfectant wipes. Like Walmart, Amazon is letting workers take unpaid time off — but that also means employees who are able to work have to make up for lost worker power during a surge in orders.

Retail, grocery, and warehouse jobs are among the few options left for people who have lost work due to the virus; Walmart, Target, and Amazon have all said they plan to hire hundreds of thousands of new employees in the coming months. Recently laid-off workers, especially those who have barely received any severance, now find themselves in a difficult position: rely on unemployment benefits to pay the bills, or take a job where the risk of exposure to the coronavirus is even higher.

For some, steady income may be more appealing — or more necessary — than unemployment checks, which are typically capped at a percentage of one’s former income. But working in the middle of a pandemic comes with its own risks when you can’t work from home. Some workers may benefit from the $1,200 stimulus checks the federal government is expected to send out soon, but those one-time payments will only go so far.

Mike, the former Marriott bellhop, said he’s still weighing his options. “I haven’t figured it out yet,” he said. “I was considering getting a job at a grocery store, but I have no solid plan for the moment.”