Employer Insights: Unemployment Insurance Provision Updates under the CARES Act

The Coronavirus Aid, Relief, and Economic Security Act (“CARES Act” or “Act”) was enacted on March 27, 2020 to provide emergency assistance and health care response for individuals, families, and businesses affected by Covid-19. Employers should be aware of two programs under the Act designed to work in coordination with one another to provide benefits to certain affected employees – the Pandemic Unemployment Assistance (PUA) program and the Pandemic Emergency Unemployment Compensation (PEUC) program. Title II Subtitle A of the CARES Act establishes new unemployment insurance provisions specifically designed to alleviate unemployment problems that arise due to the Coronavirus and its impact on the economy.

Pandemic Unemployment Assistance (PUA)

The Pandemic Unemployment Assistance (PUA) program extends unemployment benefits to those not traditionally eligible, namely self-employed individuals and independent contractors, who are unable to continue working as a result of COVID-19. On April 5, 2020, the U.S. Department of Labor published updated guidance on the PUA program, clarifying that certain individuals who self-certify that they are unemployed, partially unemployed, or unable to work due to specified Covid-19 related reasons may be covered. Notably, individuals who can telework for pay, or are receiving paid sick leave or other paid leave benefits, are not eligible to receive PUA benefits.

According to the DOL, “PUA provides up to 39 weeks of benefits to qualifying individuals who are otherwise able to work and available for work within the meaning of applicable state law, except that they are unemployed, partially unemployed, or unable or unavailable to work due to Covid-19 related reasons, as defined in the CARES Act.” This 39 week period is significantly longer than the 26 weeks permitted under most state unemployment programs. The DOL also states that “benefit payments under PUA are retroactive, for weeks of unemployment, partial employment, or inability to work due to Covid-19 reasons starting on or after January 27, 2020.”

Individual factors that may show unemployment status as a result of Covid-19 include:

  1. An individuals who is diagnosed with Covid-19 or experiencing symptoms and seeking a medical diagnosis;
  2. a member of the individual’s household has been diagnosed with Covid-19;
  3. the individual is providing care for a family member or household member who was diagnosed with Covid-19;
  4. a child or household member, for which the individual has primary caregiving responsibility, is unable to attend school or another facility that is closed due to Covid-19 and such school or facility being open is required for the individual to attend work;
  5. the individual is unable to reach their job because of a quarantine;
  6. the individual is unable to reach their job because a health care provider has advised they self-quarantine;
  7. the individual was scheduled to commence employment and does not have a job or is unable to reach their job because of Covid-19;
  8. the individual has become the breadwinner because the head of household has died because of Covid-19;
  9. the individual has to quit his or her job because of Covid-19;
  10. the individual’s job has closed as a direct result of Covid-19; or
  11. the individual meets additional criteria established by the Secretary of Labor (guidance expected but not yet received).

Amount of Assistance: Eligible individuals will receive an amount of unemployment or partial compensation benefits under the applicable state unemployment compensation law plus the supplemental payment of $600 for every week the worker is unemployed, partially unemployed, or unable to work.

Pandemic Emergency Unemployment Compensation (PEUC)

The Pandemic Emergency Unemployment Compensation Program (PEUC) provides up to 13 weeks of additional federally funded benefits to workers and individuals who have exhausted regular unemployment compensation under state or federal law, have no rights to regular unemployment compensation under any other state or federal law, and meet other specific requirements. On April 10, 2020 the U.S. Department of Labor published updated guidance on the PEUC program.

Amount of Assistance: The weekly benefit is equal to the amount of regular compensation under the applicable state law plus the $600 Federal Unemployment Compensation. As with Pandemic Unemployment Assistance, the Federal Unemployment Compensation is only available through July 31, 2020.

Additional Unemployment Provisions

Short-Time Compensation: Those states that have (or later establish) Short-Time Compensation programs may receive funding for such programs beginning on the enactment date and extending through December 31, 2020. Generally, Short-Time compensation is available to individuals who are permanently employed but whose hours and wages have been cut due to an unexpected downturn. Short-Time Compensation promotes the ability of an employer to reduce hours of numerous employees instead of having to lay off a portion of its workforce. This funding will provide for payments up to a maximum of 26 weeks per individual, provided the individual is permanently employed by his or her employer.

Mary Ruth Houston and Paul Scheck are able to advise employers of their obligations, especially under the FFCRA, EFMLA and EPSLA, as well as the quickly evolving employment law implications of coronavirus (Covid-19) in the workforce.

  • Paul J. Scheck

    Paul Scheck is a partner in the Orlando office of Shutts & Bowen LLP, where he is a member of the Labor and Employment Practice Group.

    A Martindale Hubbell AV® rated attorney, Paul has been named one of the Best Lawyers in America® in ...

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