On April 4, 2020, the Department of Labor issued “Unemployment Insurance Program Letter No. 15-20” to provide guidance on the unemployment compensation benefits provisions of section 2104 of the CARES Act. The purpose of the letter is to provide guidance to states administering the federal portion of Federal Pandemic Unemployment Compensation (FPUC), which was provided by the CARES Act. This provides $600 in weekly benefits to individuals, in addition to what they would otherwise be entitled to under state unemployment schemes. To receive FPUC payments individuals must be otherwise receiving state unemployment compensation benefits.
On April 5, 2020, the Department of Labor issued “Unemployment Insurance Program Letter No. 16-20,” which focuses on Pandemic Unemployment Assistance (PUA), which is found in section 2102 of the CARES Act. PUA extends coverage to individuals who are traditionally not eligible for unemployment benefits, such as self-employed individuals, independent contractors, those who have exhausted their traditional unemployment benefits, and those who are unemployed due to COVID-19 related circumstances.
LETTER 15-20—FPUC PAYMENTS
States must enter into an agreement with the Department of Labor in order for FPUC benefits to be available, agreeing to conditions or agreeing to waive certain conditions. FPUC is available from the week of unemployment starting on or after the date in which the state enters into the agreement with the Department of Labor through the week of unemployment ending on or before July 31, 2020. No FPUC payments will be made after July 31, 2020. If a state is unable to immediately make these payments after the agreement, the state must provide retroactive FPUC payments to eligible individuals for any missed weeks.
FPUC Payments are made under the following programs:
- Pandemic Emergency Unemployment Compensation (PEUC);
- Pandemic Unemployment Assistance (PUA);
- Extended Benefits (EB);
- Short-time compensation (STC);
- Trade Readjustment Allowances (TRA);
- Disaster Unemployment Assistance (DUA); and
- Payments under the Self-Employment Assistance (SEA) program
Employees are eligible for the full $600 weekly benefit if they receive at least $1 in any qualifying week from regular state unemployment benefits or from any of the above programs.
FPUC benefits are 100% federally funded. Administrative and implementation costs are also 100% federally funded. Eligible individuals do not need to separately apply for FPUC; it will be processed along with the application for state unemployment compensation benefits.
Importantly, the guidance provides that states may not charge employers for FPUC benefits.
The guidance provides that employees whose underlying benefits are intercepted to pay debts are still eligible for the $600 weekly payment.
Child support obligations are to be reduced from FPUC payments to the same extent as they would be under regular unemployment compensation.
The guidance also clarifies that the FPUC payments are taxable.
Termination of Program
Either the state or the Department of Labor may terminate the program with 30-days’ notice. The federal government will terminate the program if a state violates the non-reduction rule. This means that states that modify their unemployment compensation program in a manner that reduces the number of eligible weeks or modifies the average weekly wage to lower the amount of state benefits will lose the FPUC payments.
LETTER 16-20—PUA PAYMENTS
Letter 16-20 covers PUA payments, which provides benefits to individuals who are not eligible for regular employment benefits or extended unemployment benefits under state or Federal law. According to the guidance, this includes individuals who are self-employed, those who have limited recent work history, gig workers, clergy and those working for religious organizations not covered by regular unemployment compensation programs, and other workers who may not be covered by the regular unemployment compensation under some state laws.
As with FPUC, states must enter into an agreement with the Department of Labor in order for PUA benefits to apply. Once the agreement is signed, PUA must be paid starting with weeks of unemployment beginning on or after January 27, 2020. The last week of unemployment is the week ending December 26, 2020, with no PUA payments made for weeks of unemployment ending after December 31, 2020.
Generally, PUA provides up to 39 weeks for qualifying individuals who are otherwise able to work and available for work, but who are unemployed, partially unemployed, or unable able to work for COVID-19 reasons enumerated in the CARES Act. Additionally, the guidance builds on and expands on the COVID-19 circumstances to include the following:
- An individual has to quit his job due to coming into direct contact with someone who has tested positive with the virus or has been advised by a medical professional to resign from his job in order to quarantine;
- An individual is providing care for a family member or household member who has been diagnosed with the virus where the provision of care requires ongoing and constant attention limiting the individual’s ability to perform work functions;
- A member of the individual’s household has been diagnosed with the virus and the individual is unable to work as a result;
- An individual is unable to reach his place of employment where doing so would require violation of state or municipal travel bans;
- A primary care-giver’s child is unable to attend school or whose child care facility is closed as a direct result of this crisis and the child going to school or the child care is required for the individual to work, including where such individual is allowed to telework with pay, but the care of the child or person requires such ongoing attention that it is not possible for the person to work at home;
- An individual whose immune system is compromised by a serious health condition and is advised by a health care provider to self-quarantine to avoid the greater than average health risks s/he would face if s/he were to become infected by the virus;
- An individual was diagnosed with the virus, and although the individual no longer has the virus, the illness makes the individual “objectively unable to perform his or her essential job functions, with or without a reasonable accommodation;”
- An individual’s place of employment is closed due to an emergency declaration or due to necessary social distancing protocols;
- An individual was offered a job, and was scheduled to start work, but the job offer was rescinded as a direct result of the COVID-19 public health emergency;
- An individual meets any additional criteria established by the Secretary, such as an independent contractor who becomes unemployed, partially employed, or unable to work, or a driver for a ridesharing service who otherwise would not be eligible because he does not have a “place of employment” that has been closed due to the virus.
The guidance provides that PUA is not available for those with the ability to telework with pay or who are receiving paid sick leave or other paid leave benefits, unless those benefits cover less than their normal work week. For instance, an individual receiving paid benefits in an amount less than his customary work week may still be eligible for a reduced PUA payment. Similarly, for an employee who is teleworking with pay, but is working less than before the COVID-19 crisis, s/he may be eligible for a reduced PUA payment.
The guidance indicates that quitting work without good cause to obtain unemployment compensation benefits is fraud.
Furthermore, the guidance explains that many of the qualifying circumstances under PUA are likely to be of short duration. For instance, an individual who has been advised to self-quarantine due to exposure to someone with the virus, and is thus unable to reach her or his place of employment, may be able to return to work within two weeks if s/he has not exhibited symptoms or tested positive for the virus in that time period.
Similarly, schools are not closed as a direct result of the COVID-19 public health emergency, after the date on which the school year was originally scheduled to end, which in most states, is mid-May.
The cost of PUA benefits is 100% federally funded. Implementation costs and ongoing administrative costs are also 100% federally funded. Letter 16-20 does not provide that states may not charge employers for PUA benefits, but it would be inconsistent to prohibit charging employers for FPUC benefits, as provided by letter 15-20, but to allow states to charge employers for PUA benefits.
Since legal developments pertaining to COVID-19 are constantly evolving, we recommend that our clients call the Kullman Firm attorney(s) with whom they work for the most current guidance on these matters.