Congress Expands Unemployment Benefits Under the CARES ACT
By Kevin M. Mosher • Apr 2, 2020
Last week, the Coronavirus Aid, Relief, and Economic Stability Act, commonly referred to as the CARES Act, was signed into law. This two trillion-dollar stimulus package provides aid to workers, individuals, and businesses affected by the COVID-19 pandemic. Though the Act provides incentives for employers who keep employees on the payroll, layoffs may be unavoidable in these unprecedented times. In making these difficult decisions, employers want to know what assistance will be available to their employees.
Under the CARES Act, individuals who may otherwise be ineligible for unemployment insurance benefits under state or federal law will be eligible for Pandemic Unemployment Assistance if they self-certify that:
They have been diagnosed with COVID–19 or are experiencing symptoms of COVID–19 and are seeking a medical diagnosis;
A member of their household has been diagnosed with COVID–19;
They are providing care for a family member or a member of the individual’s household who has been diagnosed with COVID–19;
A child or other person in the household for which they have primary caregiving responsibility is unable to attend school or another facility that is closed as a direct result of the COVID–19 public health emergency and such school or facility care is required for them to attend work;
They are unable to reach the place of employment because of a quarantine imposed as a direct result of the COVID–19 public health emergency;
They are unable to reach the place of employment because they have been advised by a health care provider to self-quarantine due to concerns related to COVID–19;
They were scheduled to commence employment and do not have a job or are unable to reach the job as a direct result of the COVID–19 public health emergency;
They have become the breadwinner or major support for a household because the head of the household has died as a direct result of COVID–19;
They have had to quit their job as a direct result of COVID–19;
Their place of employment is closed as a direct result of the COVID–19 public health emergency; or
They meet any additional criteria established by the Secretary for unemployment assistance under this section.
Individuals who have experienced any of these circumstances but would not qualify for regular unemployment or extended benefits under state or federal law because they are self-employed, seeking part-time employment, or do not have sufficient work history may also be eligible for Pandemic Unemployment Assistance.
Pandemic Emergency Unemployment Compensation
In addition to the Pandemic Unemployment Assistance, Pandemic Emergency Unemployment Compensation will be available to unemployed workers who have exhausted all entitlement to benefits under state law or who are otherwise ineligible to receive benefits under state or federal law for any week. Individuals must not be receiving unemployment compensation from Canada and must be actively seeking work to become eligible for these benefits. Pandemic Emergency Unemployment Compensation is equal to the normal amount of unemployment insurance benefits for a week of total unemployment under the applicable state law plus the additional $600 in Federal Pandemic Unemployment Compensation.
Workers who are teleworking or receiving any sort of paid leave of absence will not be eligible for benefits under the CARES Act. However, workers who are only partially employed or unable to work for one of the above mentioned reasons can still qualify.
Duration of Benefits
Individuals can receive assistance under the CARES Act for up to a total of 39 weeks, including any weeks they received regular unemployment assistance from the state. Under the CARES Act, unemployment benefits (Pandemic Unemployment Assistance, Pandemic Emergency Unemployment Compensation, or regular state unemployment insurance benefits) will be available without any waiting period. Benefits will be available for periods of unemployment due to the above mentioned circumstances between January 27, 2020 and December 31, 2020.
Amount of Benefits
Not only does the CARES Act expand eligibility for unemployment assistance, it enhances the amount of benefits unemployed individuals can receive. Yes, we’re talking about the extra $600 in weekly benefits. Under the CARES Act, individuals receiving unemployment assistance, in the form of Pandemic Unemployment Assistance, Pandemic Emergency Unemployment Compensation, or regular unemployment insurance benefits from the state, will be entitled to an extra $600 in Federal Pandemic Unemployment Compensation, regardless of their regular rate.
Short-Time Compensation Plans
The CARES Act also provides incentive for employers who enact short-time compensation plans. Under these short-time compensation plans, employers will pay the state 50% of short-time compensation paid pursuant to such plan. This amount will be deposited in the State’s unemployment fund and won’t be used to calculate the employer’s contribution rate.
States Will Administer the Benefits
In order for these benefits to become available to unemployed individuals, the state will need to enter into an agreement with the Secretary of Labor permitting the use of federal funds for these purposes. While it is assumed all states will accept the federal aid, each state will administer the benefits through their respective unemployment compensation agency, so administration will differ from state to state. We hope states will issue their own guidance instructing individuals how to access these additional benefits in the near future.
Though the CARES Act gives employers many options for keeping employees on the payroll, layoffs may be inescapable. Luckily, such employees should be eligible for expansive unemployment benefits in these unprecedented times. If you have any questions about unemployment benefits or how to best go about layoffs, please don’t hesitate to contact an HR attorney at Thompson Coe.
MyHRGenius and Thompson Coe continue to monitor these new HR laws and their impact on employers 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 651-389-5080.
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