Fiat Chrysler Automobiles is requiring some workers at the Kokomo and Tipton plants who were temporarily laid off during the COVID-19 shutdown to pay back hundreds of dollars of supplemental unemployment benefits – better known as SUB pay.
Workers who were laid off received the supplemental unemployment payout from the company. The contract negotiated last year between FCA and the United Auto Workers gives temporarily laid-off employees 74% of their usual 40-hour wages.
However, workers also received an additional $600 per week through the federal Coronavirus Aid, Relief and Economic Security (CARES) Act, which by itself surpassed the 74% threshold owed to workers.
“The $600-a-week in economic support provided as part of the federally approved CARES Act is an offset to the company-paid supplemental unemployment benefits an employee may be entitled to receive,” FCA said in a statement.
“Because the CARES Act benefit was paid retroactively, some FCA employees received an overpayment of their supplemental unemployment benefits, averaging about $500, which they are now being asked to repay.”
The company said workers who were overpaid have the option of repaying the overages either in a lump sum, which many have already done, or through payroll deductions of no more than $100 per pay period until fully paid.
The Detroit News reported 24,000 employees must pay back the money. The company told the Tribune it would not reveal how many workers at the Kokomo and Tipton plants received the overpayment.
Jerry Price, vice president of the UAW Local 685, which oversees the local plants, said many workers were getting $990 a week in combined unemployment payouts from the company and the government. But, he said, not all workers were overpaid.
“A lot of people did a very good job of not signing up for the SUB, because it did cause an overpayment for some people,” Price said in a prerecorded video posted last month on the union’s website.
The UAW issued a statement on the situation, saying “this is a contractual matter and the UAW is closely monitoring how it is being applied.”
“Any member who thinks that they have received an overage letter in error should talk to their local union representative to look into these questions,” the union said.
The Detroit News reported that the repayment comes after FCA has “borrowed billions of dollars, halted development programs, laid off hundreds of supplemental workers and deferred portions of white-collar workers’ salaries to conserve cash amid the two-month production shutdown in North America.”
The local plants reopened on Tuesday. FCA restarted most of its other facilities on May 18.