Eligibility for the coronavirus bailout, known as the CARES Act, requires airlines to “refrain from conducting involuntary furloughs or reducing pay rates and benefits until September 30, 2020” for employees other than corporate officers.
But it doesn't restrict airlines from seeking voluntary leaves of absence from employees.
Delta has been urging its employees to sign up for voluntary leaves of one month or more to help the company save cash as it burns through $60 million a day.
Delta has more than 36,000 employees based in Georgia.
Company CEO Ed Bastian told employees in a memo Thursday that nearly 35,000 of Delta’s 90,000 employees had volunteered to take unpaid leave. But, he said, the company still needs more to volunteer.
Bastian told employees he hopes to have the stimulus funding confirmed soon.
When asked whether Delta is disclosing to federal officials how many employees are on voluntary unpaid leave and qualify for unemployment, the company responded that the amount of money allocated to each carrier under the CARES Act is not based on today’s numbers, but on salary and benefit information provided between April 1, 2019 and September 30, 2019.
From April to September of last year, Delta had nearly 90,000 employees and paid out about $7 billion in salaries and benefits, according to the U.S. Bureau of Transportation Statistics.
Bastian also told employees that the federal grants “are not nearly enough” and that the company still needs to take steps to reduce costs. If it didn’t, “that money would be gone by June,” he said.
It’s yet to be seen how much Delta will actually receive. President Donald Trump said he would hold discussions with airlines this weekend.
“We are going to be in a position to do a lot to help them, so that they keep their employees and they save their businesses,” Trump said.
As for state unemployment benefits for those taking leaves, the Georgia Department of Labor's website says employers should not submit claims for employees who are voluntarily out of work. However, Delta said that won't apply in this case.
In a written statement, the airline said it worked with the state Department of Labor, which has “added flexibility through the Governor’s state of emergency executive order in the application of unemployment benefits.”
Delta said it is submitting data to the state Labor Department on a weekly basis to file unemployment claims on behalf of employees.
It said it has also secured similar assurances from other states where it has hubs or large operations, including Utah, Massachusetts, Michigan, Minnesota, California and Washington.
The CARES Act provides for an additional $600 weekly in federal unemployment benefits on top of regular state benefits and extends those benefits by 13 weeks.
The U.S. Department of Labor has issued guidance to states this month on unemployment benefits, saying there is additional flexibility for leave to self-quarantine or to care for a family member affected by the virus, for example, but "quitting work without good cause to obtain additional benefits would be fraud."
American Airlines is telling its employees who took voluntary leaves that “eligibility for unemployment benefits varies from state to state.”
“We will, however, not contest claims for unemployment filed under this program, and will provide a letter that explains the background for the special leave of absence program, which you may provide to the state agency if you apply, ” American Airlines says in a letter to its employees.
American says that the voluntary leaves could assist the airline in “potentially avoiding more dramatic cost-savings measures.”
The Association of Flight Attendants, a union, says on its website that unemployment insurance typically does not cover employees who left their jobs voluntarily “unless this leave was in response to the COVID-19 downturn.”
“Some States may deny benefits because the furlough was voluntary, which is why it is important to have a letter stating the leave/furlough is due to COVID-19,” the union says.