This story has been updated to add a response from the Oregon Bureau of Labor and Industries.
Vancouver-based fast-food chain Burgerville will lay off 612 employees across its restaurant locations, the company announced Wednesday, a cutback that affects about 42 percent of the company’s total workforce of 1,482.
Burgerville restaurants have all been operating on a drive-thru or delivery-only service model since mid-March due to the COVID-19 pandemic and the associated statewide stay-at-home orders in both Oregon and Washington.
The company previously announced on March 23 that it would fully or partially furlough 68 percent of its workforce due to the change in operating conditions.
According to a spokesperson, the company later learned that Oregon’s Bureau of Labor and Industries considers a full furlough to be a layoff if it is expected to last more than 35 days, so all of the employees who had previously had all their hours furloughed would need to be laid off.
The policy change is prompted by Oregon’s rules, but Burgerville said it intends to apply the same policy to workers at its Washington restaurants in the interest of consistency. Burgerville operates 41 restaurants in Oregon and Washington, 38 of which are still open during the pandemic.
Employees who were previously receiving health insurance from Burgerville will continue to do so through May 31, the company said. It’s unclear how many of the laid-off employees fall into that category.
When the original furloughs were announced, Burgerville stated that employees who had previously been receiving benefits would continue to do so on furlough, but it didn’t say how many of the furloughed employees were previously receiving benefits.
The shift from furlough to layoff will not impact the employees’ eligibility for unemployment, the company said, and all of the laid-off workers had already been reduced to zero hours.
The Oregon Bureau of Labor and Industries contested Burgerville’s description of the 35-day rule on Friday.
“Burgerville is confusing rules about the timing of final paychecks in the explanation of their business decision to lay off workers,” Oregon labor commissioner Val Hoyle wrote in an email. “The Bureau of Labor and Industries does not tell employers when or how to lay off workers. We simply govern the rules around how quickly workers must be paid their final wages when their employment ends. Employers decide the terms of layoffs and furloughs and can always be more generous than the law requires.”
Hoyle stated that the agency has no rule or guidance that would prevent an employer from continuing furloughs or providing health insurance during the pandemic, and that those are financial business decisions.
“If a worker is laid off for more than 35 days, they must receive their final paycheck in the same timeframe as if they were terminated – by the end of the next business day,” Hoyle wrote.