Across the U.S., employers have many questions regarding how employees out of work due to the 2019 novel coronavirus (COVID-19) pandemic can benefit from the expanded unemployment insurance (UI) benefits offered by the Coronavirus Aid, Relief, and Economic Security Act (CARES Act).
Last weekend, the U.S. Department of Labor’s (DOL’s) Employment and Training Administration issued two guidance letters that clarified elements of the CARES Act. The guidance letters, sent to administrators of state workforce agencies, offer insight on how states can implement and operate two of the main programs included as part of the CARES Act:
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The Federal Pandemic Unemployment Compensation program (FPUC), which provides an extra $600 per week on top of the weekly benefit amounts an employee would have otherwise received through the UI program through the end of July; and
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The Pandemic Unemployment Assistance (PUA) program, which provides UI benefits under certain situations to individuals (including some independent contractors, self-employed individuals and gig workers) who would not otherwise be eligible to receive UI benefits under the prior UI structure.
FPUC GUIDANCE
With respect to the FPUC program, the guidance clarifies a number of points:
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If an individual is eligible to receive at least $1 of UI benefits for the claimed week, whether under a state’s regular UI program, the PUA program or one of a number of other specified UI programs, he or she will receive the full $600 benefit provided by the FPUC program.
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Put another way, under FPUC, the theoretical minimum benefit that an individual eligible for UI benefits could receive in any state instantly will increase from $1 to $601. The maximum benefit in any state will likewise increase by $600. In Wisconsin where the regular maximum benefit is $370 per week, that amount will increase to $970 per week.
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Employees who would otherwise be eligible for partial benefits, due to receiving some compensation in a claimed week, are eligible for the FPUC $600 benefit so long as they would otherwise receive at least $1 in weekly benefits under their state’s regular program.
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Employees who quit without good cause are not eligible for regular UI or PUA benefits. Consequently, they would not be eligible for FPUC benefits.
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FPUC is payable for weeks of unemployment beginning on or after the date on which the state in question enters into an agreement with the DOL. This means that the earliest that FPUC benefits could be paid in any state is the week ending April 4, 2020. The last week that FPUC is payable is the week ending July 26, 2020.
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States will have flexibility to pay the $600 FPUC benefit either at the same time and in the same manner as regular UI payments, or to make those payments separately, so long as they are made on a weekly basis.
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All individuals are automatically eligible for FPUC benefits if they are otherwise eligible to receive UI benefits, either under the regular UI program, PUA or another approved program. No additional enrollment steps can be required by the states.
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States may not charge employers for any FPUC so as to impact an employer’s experience rating and future UI tax rate.
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Many, but not all, states have also taken steps to ensure that all coronavirus-related UI claims will not be charged to an employer’s experience rating, or to spread out that experience over the employer pool such that employers are not incentivized to discourage employees from applying for UI.
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PUA GUIDANCE
For the PUA program, the guidance is largely focused on outlining which individuals are and are not eligible for the program:
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The PUA guidance specifically states that while PUA is generally not available to individuals who have the ability to telework with pay, or who are receiving paid sick leave or other paid leave benefits, an individual who is receiving paid sick leave or other paid leave benefits for less than his or her customary work week may still be eligible for a reduced benefit.
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The guidance also clarifies the employee certification requirement. To be a “covered individual” under PUA, an individual must self-certify that he or she is otherwise able to work and available for work, as provided under state law, except that the individual is “unemployed, partially unemployed, unable to work or unavailable for work” due to circumstances that generally fit within at least one of the following ten categories, each of which are expanded upon in greater detail in Attachment I, which begins on page 8 of the guidance:
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The individual has been diagnosed with COVID-19 or is experiencing symptoms of COVID-19 and is seeking a medical diagnosis;
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A member of the individual’s household has been diagnosed with COVID-19;
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The individual is providing care for a family member or a member of the individual’s household who has been diagnosed with COVID-19;
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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;
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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;
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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;
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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;
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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;
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The individual has to quit his or her job as a direct result of COVID-19; or
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The individual’s place of employment is closed as a direct result of the COVID-19 public health emergency.
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PUA is payable for weeks of unemployment, partial unemployment or inability to work due to any of the above reasons beginning on or after Jan. 27, 2020. This means that the earliest that PUA benefits could be paid in any state is the week ending Feb. 8, 2020. The last week that FPUC is payable is the week ending Dec. 27, 2020. As noted above, individuals who are eligible for PUA are also eligible for the enhanced $600 FPUC benefit, but only during the time period when FPUC benefits are in effect (April 4, 2020, through July 26, 2020).
UI BENEFIT CONSIDERATIONS
When making the decision as to whether or not to layoff or furlough employees so that they can collect UI benefits, a few factors should be considered:
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For an employee to be eligible for benefits, under most circumstances, he or she must be involuntarily unable to work. As such, the employer should be the one initiating the layoff or furlough, not the employee.
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Some employees may earn close to or exceed their normal weekly wage when factoring in FPUC benefits. For others (for example, anyone earning less than $970 per week in Wisconsin), UI benefits will constitute a reduction in their regular pay. While some employers may be tempted to try and make employees whole by supplementing UI benefits, doing so will either reduce the employee’s weekly benefit or render the employee totally ineligible to receive benefits.
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It is ultimately the responsibility of each employee to file for UI benefits and to provide the UI agency in their respective state with the information it needs to process benefits. While some states have offered programs for employers to certify multiple employees’ eligibility in the context of a mass layoff, most states, at least at this point, continue to consider each application on a case-by-case basis. Employers should resist pressure to file for benefits on behalf of their employees or to provide anything other than general advice with respect to UI requirements. Ultimately, employers do not have the capability to choose whether to grant or deny UI benefits to employees and should avoid intimating such.
The DOL intends to publish additional guidance concerning the expanded UI benefits program.
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