The CARES Act & “Non-UI” COVID-19 Stimulus Unemployment

By April 8, 2020August 7th, 2020CARES Act, COVID-19

The Department of Labor (DOL) issued UI PL 16-20 to deliver operating, financial, and reporting instructions regarding the CARES Act. Employers can review the DOL’s instruction at the following website: https://wdr.doleta.gov/directives/attach/UIPL/UIPL_16-20.pdf.

The CARES Act helps alleviate the economic effects of COVID-19 with the following provisions: temporary benefits for individuals who exhausted their entitlement to regular unemployment benefits and for individuals who are not eligible for regular UC (such as those who are self-employed or who have limited recent work history).

However, the CARES Act will challenge states to make proper determinations in a timely fashion. The DOL advises that the states’ systems that are normally used for Disaster Unemployment Assistance (DUA) claims may be impacted by the volume of new claims being filed as a result of COVID-19. Also, the DOL expects that the states will need new programming and training to accommodate the CARES Act, especially since the act will allow for states to accept claims that may be filed for weeks retroactively going back to weeks before or after January 27, 2020. Finally, the DOL says that if states require individuals to first apply for regular unemployment benefits, the volume of new applications (many of which will be denied) will negatively impact the regular unemployment claims.

Please see snippets of the CARES Act below:

  • Provides benefits for weeks of unemployment going back to the weeks before or after January 27, 2020.
  • Provides unemployment benefits to individuals who are otherwise not eligible under state law, federal law, or pandemic emergency unemployment compensation. These individuals include those that are self-employed, seeking part-time employment, lacking sufficient work history, exhausted prior benefits, and/or do not qualify for regular unemployment benefits. The Pandemic Unemployment Assistance (PUA) will provide up to 39 weeks of benefits to qualifying individuals who are able to work and available for work within applicable state unemployment law. However, these individuals are unemployed, partially unemployed, or unable or unavailable to work due to one of the COVID-19 related reasons identified in Section 2102(a)(3)(A)(ii)(I) of the CARES Act and listed below and are determined not eligible to receive regular unemployment benefits:
  1. The individual has been diagnosed with COVID-19 or is experiencing symptoms of COVID-19 and is 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 a member of the individual’s household who has been diagnosed with COVID-19;
  4. 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;
  5. 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;
  6. 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;
  7. 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;
  8. 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;
  9. The individual has to quit his or her job as a direct result of COVID-19; or
  10. The individual’s place of employment is closed as a direct result of the COVID-19 public health emergency.

 Please be aware that the reasons listed above could result in an individual qualifying for unemployment benefits. The unprecedented claims volume puts a heavy burden on the states deciding to whether to accept individuals’ claims based solely on their statements as to why they were separated, especially since these statements cannot be easily and quickly verified. As a result, the DOL advises that states may be at risk of paying benefits with a higher occurrence of fraud, overpayment, or delayed payment in order to meet due process standards. The states may be required to verify that the information presented by individuals is not truthful or accurate.

Additionally, the PUA Weekly Benefit Amount (WBA) is equal to the WBA authorized under state unemployment law where the individual was employed.  In no case will the amount be less than the minimum WBA. The DOL predicts that it will be difficult and time consuming for states to determine applicable WBAs under the DUA regulations.

Finally, individuals will be eligible to receive PUA, as well as FPUC, for weeks of unemployment before or after March 27, 2020 and ending on or before July 31, 2020. FPUC allots individuals an additional $600 per week. Also, PUA benefits and their duration is typically limited to at least 39 weeks, excepting some circumstances.  The weeks for which an individual collected PEUC will not be taken from the individual’s PUA entitlement.

 Our office will monitor COVID-19 updates closely and will send out additional announcements as we become aware of any updates. You can also review these updates on our website at http://covid19.thomas-and-company.com/covid-19/ too.

Please reach out to your representative with any questions.

Mike Parker

Author Mike Parker

Mike has 30 years of experience in unemployment cost control management, and has been with Thomas & Company for 25 years. He is the primary contact with state agencies building strong relationships, lobbying for opportunities that increase quality of service and efficiencies, and insuring compliance with state specific requirements. He works with the client service team, answering technical questions related to the unemployment insurance programs administered by the individual states and oversees the processes associated with wage audits and fraudulent claim inquiries. Mike is a member of the SIDES Operations Committee and currently sits on four Operations Committee subcommittees.

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