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Update on Most Recent US DOL Guidance on Unemployment Provisions of CARES Act (US)

The US Department of Labor (DOL) has issued a number of publications offering guidance to the states for implementing certain federal unemployment insurance provisions contained in the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), including the Pandemic Unemployment Assistance (PUA), Federal Pandemic Unemployment Compensation (FPUC), and Pandemic Emergency Unemployment Compensation (PEUC) programs.  As previously discussed here, these provisions of the CARES Act provide up to 39 weeks of unemployment benefits and a $600 per week federally-funded additional benefit for eligible individuals, which includes individuals who are not typically covered by state unemployment programs, such as self-employed individuals, independent contractors, and gig workers, as well as those who do not have sufficient work history to qualify for state unemployment benefits.

The initial guidance, issued on April 2, 2020, is the first of several Unemployment Insurance Program Letters (UIPL); it focuses on state staffing and the implementation of state and federal unemployment benefits during this unprecedented time.  As stated by Secretary of Labor Eugene Scalia, “The [DOL] is offering guidance and support so that States can provide benefits quickly while protecting the integrity of the unemployment insurance system.”  This initial guidance and the subsequent UIPLs note the important role of the states in preventing fraud and ensuring that only eligible individuals receive benefits; however, it also sets forth that the CARES Act includes an appropriation of $26 million to be used by the DOL to carry out audits, investigations and other oversight activities related to states’ adherence to existing unemployment insurance laws and policies.  Additionally, the initial guidance and subsequent UIPLs make clear that the CARES Act and related benefits apply only to individuals who are no longer able to work due to COVID-19 related reasons through no fault of the own.  Significantly, individuals who quit their jobs without good cause to obtain additional benefits would be committing fraud and, if that occurs, the individual is ineligible for any additional benefit payments, must pay back the benefits and is subject to federal prosecution.

The DOL’s second UIPL, issued on April 4, 2020, provides states with guidance for the FPUC program and, specifically, for the administration of the additional $600 federally-funded weekly benefit to eligible individuals through July 31, 2020.  Eligible individuals are those receiving unemployment compensation under state programs and extended federal programs.  States will decide eligibility for FPUC based on eligibility for the underlying program, meaning that individuals do not have to separately apply for FPUC.

On April 5, 2020, the DOL published another UIPL providing states with guidance in implementing the PUA program, including program eligibility for individuals not typically covered by unemployment insurance, including self-employed individuals, independent contractors, gig workers, and persons with insufficient work history who would not qualify for state unemployment benefits, each of whom are unemployed due to COVID-19 related circumstances.  The guidance also includes direction as to those who are not eligible for PUA, that is, individuals who have the ability to telework with pay or who are receiving paid sick leave or other paid leave benefits.  The guidance reiterates qualifying COVID-19 related circumstances for PUA eligibility, which can extend for up to 39 weeks of benefits; however, it also provides that many of the qualifying circumstances are likely to be of short-term duration.  For example, an individual who has been advised to self-quarantine by a health care provider because of the individual’s exposure to a person who has tested positive for the coronavirus, and is therefore unable to reach his or her place of employment, may be able to return to his or her place of employment within two weeks of the exposure if he or she does not exhibit symptoms of COVID-19 or test positive for the coronavirus.

One notable area of inconsistency exists between the benefits under the FPUC and PUA programs.  The statutory language and guidance issued to date suggests that in order to receive the $600 weekly pandemic supplement under the FPUC program, an individual must qualify for at least $1 in state unemployment benefits.  The PUA program, however, indicates that benefits are available to persons who are “not eligible for regular compensation or extended benefits under State or Federal law,” including those who self-certify that they “do[] not have sufficient work history, or otherwise would not qualify for regular unemployment or extended benefits under State or Federal law…”  The PUA program language states that, in that case, the amount of available assistance includes the minimum state weekly benefit plus the $600 weekly pandemic supplement, suggesting that an individual need not qualify for or receive any state unemployment benefits but still remains eligible to receive not only the minimum weekly benefit amount under state law, but also the supplemental pandemic benefit.

The guidance thus far demonstrates the involvement of the DOL in the states’ implementation of federal unemployment programs and allotment of federal funds during the COVID-19 pandemic.  However, despite the DOL’s considerable efforts to provide clarifications and guidance under the CARES Act, many questions remain.  We will continue to provide relevant updates as they become available.

© Copyright 2020 Squire Patton Boggs (US) LLPNational Law Review, Volume X, Number 99

TRENDING LEGAL ANALYSIS


About this Author

Daniel B. Pasternak, Squire Patton Boggs, Phoenix, Labor Litigation Layer
Partner

Dan Pasternak focuses his practice on litigating labor and employment claims, representing management in traditional labor relations matters, and working with employers to develop and enforce business-sensible policies and practices to effectively manage their human resources.

Dan represents employers before federal and state courts and administrative agencies, and in arbitration and mediation proceedings, in employment matters arising under the array of federal and state employment laws, including discrimination, harassment, retaliation,...

602 528 4187
Traci L. Martinez Labor & Employment Attorney Squire Patton Boggs Columbus, OH
Partner

Traci Martinez is a member of the firm’s Global Board and is the deputy office managing partner of the Columbus, Ohio, office. She is an experienced civil litigation and labor and employment lawyer. Traci has a unique and broad practice that focuses on the business objectives of her clients, whether through counseling, litigation or transactional matters. Traci is also a demonstrated leader in the Central Ohio community.

As a member of the firm’s Global Board, Traci assists in the strategic planning of the firm’s initiatives, including expansion into new markets, such as Asia and Italy. She is also instrumental in the evaluation and advancement of partners across the firm and has led the planning of the firm’s global partners’ meetings.

In her practice, Traci spends a large portion of her time devoted to trial work, which is a true passion. She has successfully tried numerous cases and obtained full defense verdicts in multiple jurisdictions concerning discrimination, contracts, catastrophic claims and disputes involving electrical, communication and gas utilities matters.

A trusted adviser to employers across the US, Traci regularly counsels boards of directors and C-suites on the complex employment issues they face, including alleged sex-harassment claims and threatened executive takeovers. She also advises employers on compliance with federal and state employment laws, including covenants not to compete, trade secrets, independent contractor issues, social media law, the FMLA, Title VII, the ADA and the ADEA.

Traci regularly volunteers her time to advance diversity initiatives within the firm and her community. Currently, she serves as vice-chair of the firm’s Advancing Women’s Task Force and is consistently recognized for her efforts relating to diversity and inclusion. She was selected by Latino Leaders magazine as a Top Latino Lawyer and Most Powerful Women in Law, earned Profile’s in Diversity magazine’s Women Worth Watching Leadership Award, and was shortlisted for Inspiring Role Model in Promoting Gender Diversity in the Legal Profession – Chambers USA Women in Law Awards.

Prior to attending law school, Traci was an elementary school teacher. Currently, she is an Executive Committee member of Experience Columbus and is a member of its Board of Directors, where she is serving a term as Secretary.

614-365-2807
Anne Marie Schloemer, Employment Attorney, Squire Patton Boggs Law Firm
Associate

Anne Marie Schloemer (Prack) researches and analyzes legal sources for drafting memorandum, pleadings and position statements related to employment law. She also drafts discovery requests and responses, and prepares for depositions and litigation.

In addition, Anne Marie participates in all aspects of workers’ compensation administrative hearings including the preparation of client defenses to employees’ claims and medical histories and summaries.

614.365.2757