Rollout of Federal Pandemic Unemployment Compensation
On March 27, 2020 the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was signed into law. Under the CARES Act, states will receive aid from the federal government in order to expand and increase unemployment insurance benefits to those affected by the COVID-19 pandemic. One of the most notable aspects of the CARES Act is the additional $600 in Federal Pandemic Unemployment Compensation all individuals receiving unemployment insurance benefits will receive.
All additional unemployment insurance benefits provided by the CARES Act are administered by the states and require states to enter into agreements with the U.S. Department of Labor. On April 8, 2020, Minnesota became one of the first states to start providing the additional $600 in Federal Pandemic Unemployment Compensation. Many employers are questioning how this additional benefit may impact their employees who have been furloughed, laid off, or had their hours reduced.
Who gets the additional $600?
For all participating states, individuals receiving at least $1 in unemployment benefits will receive the $600 in Federal Pandemic Unemployment Compensation each week. This includes employees who are still working and receiving unemployment compensation benefits for partial wage loss. As you can probably conclude, many individuals will ultimately earn more by collecting unemployment insurance benefits than they would working at their normal hourly wage or annual salary.
What if my employee won’t return to work because they’re earning more collecting unemployment benefits?
While each state has its own unique unemployment compensation scheme, most require employees to report any offers of employment they refuse during the weeks in which they request unemployment benefits. An employee who refuses an offer of work will most likely become ineligible for unemployment insurance benefits.
Are all states providing the extra $600 now?
As of April 16, 2020, 29 states have started providing the additional $600 in unemployment insurance benefits pursuant to the CARES Act. Other states have had difficulties updating their programs to accommodate the additional payment but intend to begin issue the $600 payments in the upcoming weeks.
During these unprecedented times, HR professionals and employment attorneys alike have shifted their focus to learning the nuances of unemployment insurance. These nuances are ever-changing, as governors across the America continue to issue executive orders to accommodate the huge uptick in individuals applying for benefits. MyHRGenius and Thompson Coe continue to monitor these new HR laws and their impact on employers and employees throughout the country. For more information, including webinars, primers, summaries and podcasts on COVID-19 go to www.myhrgenius.co or www.thompsoncoe.com or call 651-389-5007.