CARES Act: Department of Labor guidance helps employers understand new unemployment programs

Like many things recently, the rules related to unemployment compensation benefits are changing rapidly. Employers are finding themselves trying to navigate the parameters of these new unemployment programs while tackling many other pandemic-related employment issues. 

To assist employers, the Department of Labor has issued a Unemployment Insurance Program Letter 14-20 outlining relevant unemployment provisions of the Coronavirus Aid, Relief and Economic Security Act. The Unemployment Insurance Program Letter covers issues related to the administration of and eligibility criteria for state unemployment insurance programs and the enhanced federal provisions. The new Unemployment Insurance Program Letter is the first of several upcoming guidance documents the Department of Labor will issue on the unemployment insurance provisions of the CARES Act.

New Unemployment Programs. The Unemployment Insurance Program Letter outlines the new unemployment programs under the CARES Act.

• Federal Pandemic Unemployment Compensation
  • Program scope: This program provides an additional $600 per week to individuals who are collecting regular unemployment compensation benefits. Among the requirements of this program is a non-reduction rule, which prohibits states from changing the computation method governing regular unemployment benefits in a way that results in the reduction of average weekly benefit amounts or the number of weeks of benefits payable.
  • Eligibility: Eligible individuals who are collecting certain unemployment insurance benefits, including regular unemployment compensation, will receive an additional $600 per week in federal benefits. This additional payment will be paid by the state along with regular unemployment compensation benefits, although there may be a delay in payment as the program gets set up. 
  • Dates:  This benefit is available for weeks of unemployment beginning after the date on which a state enters into an agreement with the Department of Labor and ends with weeks of unemployment ending on or before July 31, 2020.  The maximum period of this benefit is four months.
• Pandemic Unemployment Assistance
  • Program scope: Pandemic Unemployment Assistance provides benefits for eligible individuals who are self-employed, seeking part-time employment, or who otherwise would not qualify for unemployment insurance benefits under state or federal law.
  • Eligibility: To be eligible, among other requirements, individuals must demonstrate that they 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 because of COVID-19 related reasons. Coverage also includes individuals who have exhausted all rights to regular unemployment compensation or extended benefits under state or federal law, or Pandemic Emergency Unemployment Compensation.
  • Dates: Pandemic Unemployment Assistance is available starting with weeks of unemployment beginning on or after Jan. 27,2020 and ending on or before Dec. 31, 2020.
• Pandemic Emergency Unemployment Compensation
  • Program scope: The Pandemic Emergency Unemployment Compensation program allows those who have exhausted benefits under regular unemployment compensation or other programs to receive up to 13 weeks of additional benefits. States must offer flexibility in meeting Pandemic Emergency Unemployment Compensation eligibility requirements related to “actively seeking work” if an applicant’s ability to do so is impacted by COVID-19.
  • Eligibility: Eligible individuals who are collecting certain unemployment insurance benefits, including regular unemployment compensation, will also receive an additional $600 in federal benefits per week.
  • Dates:  Weeks of unemployment beginning after the date of signed agreement between the Department of Labor and state through Dec. 31, 2020.
• Short-Time Compensation/Work Share Programs
  • Program Scope: Short-Time Compensation, also known as Shared Work or Work Share, is a state program intended to avoid lay-offs by reducing the hours for a group of workers and allowing those workers to receive a partial unemployment benefit payment while still working. States with an existing program may be reimbursed for 100% of Short-Time Compensation benefit costs, up to a maximum of 26 weeks of Short-Time Compensation per individual.
  • Eligibility: Employers who choose to participate in existing or newly created state programs. 
  • Dates: Reimbursements are available starting with weeks of unemployment beginning on or after March 27, 2020 and ending with weeks of unemployment ending on or before Dec. 31, 2020.

Coordination of unemployment compensation benefits programs. The Unemployment Insurance Program Letter also addresses a frequent question posed by employers: Can an employee establish eligibility for multiple benefit programs, including multiple programs authorized in the CARES Act?   The answer is yes.

The Unemployment Insurance Program Letter outlines the order of unemployment compensation payments, which is contingent upon an individual meeting all eligibility criteria for the respective program or programs. It is also contingent on the state having entered into applicable agreements with the Department of Labor related to such programs.

Answering another frequent question, the Department of Labor also notes: The Federal Pandemic Unemployment Compensation, which provides for the additional $600 per week, is available for individuals collecting regular unemployment compensation, benefits as self-employed (and other Pandemic Emergency Unemployment Compensation reasons) and benefits under a Work Share program – among other reasons (see the Unemployment Insurance Program Letter for the full list).  Individuals will receive FPUC payments concurrently with payments under these programs. Upon execution of an agreement between the state and Department, this applies to all weeks of unemployment ending on or before July 31, 2020.

Finally, the Unemployment Insurance Program Letter includes a chart summarizing the new unemployment programs for employers.  

The McDonald Hopkins Labor and Employment Response Team will continue to monitor developments and provide additional updates related to employment issues impacted by the COVID-19 crisis.