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We often hear small business owners talk about how their employees are like family. And that can make layoffs tricky for people like Katie Tyler. She's the founder and president of Tyler 2 Construction in Charlotte. "I spend more time with these people than I do with my husband on many given days," says Tyler. "So it's a different relationship. It's a different commitment. It's much more personal." The recession has forced Tyler to shrink her staff by a third. But she's doing what she can to ease the pain. WFAE's Julie Rose reports: A year and a half ago, Katie Tyler had 35 employees and the kind of office space problem small business owners love. "We had every single one of these places filled, and we were looking at how do we get more people in here?" says Tyler, as she walks the employee work space of Tyler2 Construction. Today there's plenty of room for more workers, she just doesn't have work for them to do. Before the recession, Tyler's small construction firm had $32 million in annual revenues. But business dropped dramatically in the spring of last year. Tyler pulled the plug on all discretionary spending and temporarily stopped taking a salary. She cut employee pay by 10 percent. "And then we said, 'Okay, it's still not enough. What's next?'" says Tyler. "The way we got to the 'attached unemployment' was simply saying, 'How do we make this be as painless as possible for people we really want to bring back, but we don't have any current work for?'" "Attached unemployment" is when a company files the weekly paperwork for the people it's laid off, so they don't have to hassle with it. Often their unemployment checks come faster. Last year, two and a half percent of unemployment claims fit this category nationwide. Traditionally, manufacturers have used attached unemployment, but now more small businesses are using it, because it feels like a nicer way to treat employees. Katie Tyler's even spending thousands of dollars a month to pay health insurance for her laid-off workers. "Of course we'd be in a better financial position if we weren't paying that," says Tyler. "But for me it's never been just about the money." It's about employees like Gerzon Lopez, who's been with Tyler 2 Construction for more than four years. Since April, he's been on and off the payroll three times. At the moment he's back, installing video projectors and screens in a client's office. "This is the one we're doing here," says Lopez, flipping a switch to lower one of the screens. He's doing a final check of the equipment. The project is completed after today. "After this job, I was told we bidded on 9 new jobs," says Lopez. "If we didn't win any of those jobs, it would be layoff, again." Tyler 2 specializes in interior construction, which is a niche that's in pretty good shape. As companies downsize they need to rearrange their space. But Katie Tyler says competition is intense, since home builders who've never done this kind of work before are trying to get in on the business. "Plan D is to just lay off people and say 'Good luck, here's your reference,'" says Tyler. "We're not there yet. But right now, my crystal ball says this is as good as it's gonna get for awhile." Tyler's already had to cut three workers permanently. And six others have been out on attached unemployment at least once. Tyler calls them weekly with updates. Few have made a serious effort to find new jobs. Nick Willman says he's not ready to let go of Tyler2. "This is the job that I want and I kinda felt like if I got another job then I'd lose this one," says Willman. "And, so, you know I didn't look for a new job as much as I should have." Then again, it's not like many construction companies are hiring right now. And if there's one thing Katie Tyler's employees have in common? They're loyal. "I am without a doubt," says Willman. "She's been very loyal to me. She's been very upfront about everything. I know she's doing everything she can right now to keep everybody employed. I mean, I don't know what else to ask for." After all, he still thinks of himself as a Tyler2 employee, even when he's not receiving a paycheck. This story is part of a Morning Edition series on how small businesses are weathering the recession. Listen to other reports in the coming days online at http://www.npr.org/.