Over this past weekend, The Kullman Firm provided a synopsis of many of the major employment-related features of the new Coronavirus Aid, Relief, and Economic Security Act (CARES.) We are supplementing that bulletin with a more detailed discussion of the unemployment compensation benefits provisions of the new law which have received much attention in the press. As always, if you have any questions regarding the following information, please do not hesitate to contact the Kullman attorney(s) with whom you work.
The Coronavirus Aid, Relief and Economic Security (CARES) Act includes the Relief for Workers Affected by Coronavirus Act (RWACA), which operates in tandem with states’ unemployment compensation systems. It provides additional benefits to those affected by the COVID-19 virus, provides additional benefits beyond the maximum amounts paid by the states, and provides coverage to many employees who would not otherwise be eligible for unemployment compensation benefits.
Amount of Benefits
The Act provides $600 per week for eligible individuals in addition to any amount to which such individual may be entitled, for a four-month period, through July 31, 2020. As several Senators observed prior to the passage of CARES, this will result in a windfall for many employees, at least temporarily.
Generally speaking, RWACA requires that states enter into agreements with the Secretary of Labor in order for these benefits to apply. Because this part of the legislation adds substantial benefits to states’ citizens, and imposes minimal conditions limited to the COVID-19 public health emergency, we anticipate that every state will embrace these benefits.
Additional Weeks of Compensation
The Act provides up to 13 additional weeks of unemployment compensation payments after state unemployment benefits are no longer available. Most states cap unemployment compensation benefits at 26 weeks, so this extends the maximum compensation period up to 39 weeks through December 31, 2020.
Length of Program
The program runs from January 27, 2020 to December 31, 2020. Individuals will be entitled to retroactive benefits, including weeks where an individual received regular state unemployment compensation benefits.
The Act drastically expands the list of individuals who otherwise would be ineligible under most states’ unemployment compensation statutes. The Act provides that the following individuals who are otherwise able to work and available to work within the meaning of applicable state law are eligible:
- the individual has been diagnosed with COVID-19 or is experiencing symptoms and seeking a medical diagnosis;
- a member of the individual’s household has been diagnosed with COVID-19;
- the individual is caring for a family member or member of the 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 result of the COVID-19 emergency (i.e. child care) and the school or facility care is required for the individual to work;
- the individual cannot go to work because he/she has been advised by a health care provider to self-quarantine due to COVID-19;
- the individual was scheduled to start work and does not have a job or is unable to reach the job as a direct result of COVID-19;
- 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 has to quit his or her job as a direct result of COVID-19;
- the individual’s place of employment is closed as a direct result of COVID-19; or
- the individual meets any additional criteria established the Secretary for unemployment under this section.
It is significant to note that these criteria do not include an employee who simply quits his or her job during the public health emergency. One of the criteria is where an employee “has to quit” his or her job as a direct result of COVID-19, but that would presumably relate to one of the other criteria, such as contracting the virus itself or taking care of someone infected with the virus.
Unemployment Assistance for Individuals Traditionally Not Eligible
The Act provides unemployment benefits for an individual who is self-employed, is seeking part-time employment, does not have sufficient work history, or otherwise would not qualify for regular unemployment or extended benefits under state or federal law and is able and available to work and is actively seeking work and meets one of the criteria above. This also runs from January 27, 2020 to December 31, 2020.
- Individuals who have the ability to telework with pay;
- an individual who is receiving paid sick leave or other paid leave benefits, regardless of whether they satisfy one of the requirements above; or
- Undocumented workers, as individuals must be authorized to work.
Most states have a one-week “waiting period” before an individual can begin receiving unemployment compensation benefits. Under the Act, however, states that agree to waive this waiting period will be reimbursed 100% by the federal government for that week, including administrative expenses necessary for processing payments, so that eligible individuals can receive assistance immediately. This means that states must affirmatively “opt-in” to waive the one-week waiting period; it will not occur automatically under this legislation.
“Short Time” Compensation
Where employers reduce hours instead of laying off employee this results in a pro-rated unemployment compensation benefit. The Act provides that the government will pay 100% of such payments through December 31, 2020 in states that already provide these types of payments. For states that do not currently provide short time compensation, the federal government will pay 50% of the costs if they start providing such benefits.
Under the Act, states that participate in this program are prohibited from taking any action to decrease the maximum number of weeks for which an employee receives unemployment benefits established by state law or procedures.
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.