New Unemployment Benefits Under the CARES Act
The recently enacted Coronavirus Aid, Relief and Economic Security Act, known as the CARES Act, includes three new federally-funded programs to provide additional unemployment compensation for workers. While the federal government is providing the funding, the programs will be administered by the states as part of their unemployment insurance systems. What follows is a brief summary of each program.
PANDEMIC UNEMPLOYMENT ASSISTANCE
The CARES Act creates the Pandemic Unemployment Assistance (PUA) program for individuals who are unemployed because of COVID-19. It is a temporary federal program covering the timeframe between January 27, 2020 and December 31, 2020.
The PUA program provides unemployment benefits, referred to as Pandemic Emergency Unemployment Compensation (PEUC), to workers who have exhausted their benefits and those who are not traditionally covered by unemployment insurance, such as the self-employed, independent contractors, gig workers, members of the clergy, individuals seeking part-time work, and those with insufficient work history. The program gives eligible workers up to 39 weeks of benefits. The 39-week limitation includes any weeks for which the covered individual receives unemployment or extended benefits under any federal or state law.
PUA is not available to individuals who are teleworking or who are on some form of paid leave, unless their pay or leave benefits are less than they are customarily paid. In order to qualify for PUA, an individual must self-certify that he or she is otherwise able to work and available to work, but are either (a) unemployed, (b) partially unemployed, or (c) is unable to work or unavailable to work because of one of the following reasons:
- The individual has been diagnosed with COVID-19 or is experiencing symptoms of COVID-19 and is seeking a medical diagnosis. This includes individuals who have come into contact with someone who has COVID-19 and, as a result, is advised to resign from his or her job and quarantine.
- A member of the individual’s household has been diagnosed with COVID-19.
- The individual is 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 the individual has 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 the individual to work. This includes individuals who could telework but are unable to due to constant caregiving.
- The individual is unable to reach the place of employment because of a quarantine imposed as a direct result of the COVID-19 public health emergency.
- The individual is unable to reach the place of employment because the individual has been advised by a health care provider to self-quarantine due to concerns related to COVID-19. This includes individuals who have come into direct contact with someone diagnosed with COVID-19 and individuals who have health conditions that have compromised their immune system.
- The individual was scheduled to commence employment and does not have a job or is unable to reach the job as a direct result of the COVID-19 public health emergency.
- The individual has become the breadwinner or major support for a household because the head of the household has died as a direct result of COVID-19.
- The individual must quit his or her job as a direct result of COVID-19. An example would be someone who has recovered from COVID-19 but is still experiencing health conditions caused by the illness that prevent the individual from being able to work.
- The individual’s place of employment is closed as a direct result of the COVID-19 public health emergency.
- The individual meets any additional criteria established by the Secretary of Labor for unemployment assistance under this section. The Secretary has already determined that independent contractors and gig workers may qualify for PUA benefits if they are unemployed, partially unemployed, or are unable to work or unavailable for work due to fact that the COVID-19 health emergency has severely restricted their ability to work.
Individuals are not qualified for PUA if they are able to telework with pay or are on some form of paid leave where they receive their customary number of hours.
ADDITIONAL INCREASED BENEFITS
In addition to PUA, the CARES Act also includes provisions that increase the amount of unemployment benefits. Unlike PUA, individuals qualifying for increased benefits do not have to certify that they are unemployed due to the COVID-19 pandemic.
Specifically, the CARES Act allows states to be reimbursed for the following:
- An extra $600 per week for payments made by the state to individuals eligible for unemployment benefits between April 5, 2020 and July 31, 2020 (Federal Pandemic Employment Compensation);
- An additional 13 weeks of benefits, ending on December 31, 2020, for those who have exhausted state benefits and who are able, available, and actively seeking work; and
- Compensation equal to the first week of unemployment benefits, intended to incentivize states that require a one-week waiting period to receive benefits to waive the requirement.
Individuals who receive an extra 13 weeks of benefits are also eligible during that time for the new $600 weekly increase.
The CARES Act also provides funding for states that create Short-Time Compensation (STC) programs in order to provide an alternative to layoffs. Virginia created such a program in 2014, but it was repealed in 2016 when necessary federal funding was not received. These programs apply to workers whose employer has reduced their hours by more than 10%, but not more than 60%, in lieu of layoffs. Employees can receive a pro-rata amount of unemployment compensation based on what they would have received had they remained fully employed. As with the PUA, the STC ends on December 31, 2020. While the CARES Act incentivizes states to create STC programs, it is unlikely that Virginia will be able to benefit from this part of the legislation because it has no such program in place and the 2020 legislative session has ended.
Jeff Wilson is a Pender & Coward attorney focusing his practice on employment law matters, including counseling and business litigation.
Filed Under: COVID-19 Articles and Resources