Closures due to COVID-19 pandemic causing mass layoffs across state

After being forced to close due to the coronavirus, Minnesota restaurants and casinos are being forced to layoff staff statewide.

(FOX 9) - The COVID-19 pandemic and resulting closures of bars, restaurants and other public gathering spaces in Minnesota is causing mass layoffs across the state.

Earlier this week, Gov. Tim Walz signed an executive order closing all public gathering spaces such as theaters, gyms and bars and limited restaurants to carry-out and delivery. The governor estimated hundreds of thousands of people would be forced from work because of the closures.

Gov. Walz orders bars and restaurants across Minnesota to close to dine-in customers Tuesday night

Minnesota Gov. Tim Walz has ordered bars and restaurants to close to dine-in customers by 5 p.m. Tuesday and continue indefinitely, a move Walz said was necessary to control the spread of coronavirus.

Punch Bowl Social, a popular hangout spot in St. Louis Park, informed the Minnesota Department of Employment and Economic Development on Tuesday of its plans to permanently lay off approximately 118 employees due to the “unexpected and unforeseen business circumstances related to the COVID-19 pandemic.”

Can Can Wonderland, a bar and restaurant in St. Paul that offered mini golf, vintage arcade games and live shows, announced Wednesday that, due to the governor’s order, it would be closing for good.

“The simple truth is many businesses in the service industry do not have the economic resources to shut down and wait this out,” the owners said in a Facebook post. “Not knowing the legacy or severity of the COVID-19 outbreak greatly limits a company’s ability to prepare for an economic downturn such as we are now facing. It is with a very heavy heart that we had to lay off our leadership, our management and our incredible staff in hopes of weathering this storm.”

Can Can Wonderland said it hopes to be able to reopen when the pandemic has passed.

Running Aces, a casino, hotel and racetrack off Interstate 35 in Columbus, emailed employees Wednesday afternoon informing them it was laying off almost all of its staff.

“Given these rapidly developing changes, since our last communication regarding furloughs for RA employees, we have been forced to reevaluate our business and financial circumstances,” the email read. “Due to those changing circumstances, caused by the COVID-19 crisis, we have made the difficult decision to terminate your employment effective as of the last day you worked, as part of a company-wide reduction that will affect almost all RA employees.”

The company said it hopes to be able to rehire the laid-off employees in the near future. In a statement, a company spokesperson admits they are unsure what operations will look like once they are able to re-open but write: "Our deep hope is that our situation will look very much like a furlough then return-to-work situation. We hope to bring back as many employees as possible, as soon as possible."

"The critical difference between Running Aces’ decision to separate employees, rather than furlough them, is that employees who have been separated are immediately able to take a distribution of 100% of their 401(k) balance," Running Aces Director of Marketing Aaron Bedessem added. "They are not required to take a loan or manage the process of a hardship withdrawal. They have immediate access to 100% of the funds in their 401(k) account in their time of need. We understand that 401(k) accounts have been affected by the COVID-19 pandemic, too, but we believe that allowing employees to access their money is a valuable benefit for affected employees."

In anticipation of mass layoffs, Walz signed a second executive order this week ensuring all employees impacted by the spread of COVID-19 would have full access to unemployment benefits. The order requires the state’s unemployment insurance system to speed up payments to newly laid off workers.

Minnesota DEED sees spike in unemployment insurance requests after Governor’s announcement

The Minnesota Department of Employment and Economic Development says it has seen a dramatic increase in the number of employees hoping to collect unemployment insurance.

Unemployment checks cover half of a person’s typical wages, according to the state’s economic development commissioner, Steve Grove.

As of Wednesday night, around 72,000 unemployment applications were submitted in Minnesota this week with about 31,500 thousand of them coming in on Wednesday alone, according to the Minnesota Department of Employment and Economic Development.