The CARES ACT & Unemployment Insurance 5.14.20 Update

Extended UI benefits

At the end of April 2020, the US Department of Labor announced that the national unemployment rate was 14.7%, with over 30 million Americans filing for unemployment compensation.  As of May 3, 2020, the number of unemployment claims has triggered extended benefits in 22 states. The Federal-State Extended Unemployment Compensation Act of 1970 provides standing law that extends benefits when a state’s unemployment rate is equal to or exceeds 6.5% for 3 months. Affected states must provide an additional 13 weeks of unemployment benefits, on top of regular unemployment. In most states claimants will be eligible to collect up to 39 weeks of unemployment benefits, along with the Federal Emergency Unemployment Compensation that is currently providing an additional $600 per week through July 2020.    As of today states extending benefits are: AK, CA, CT, GA, LA, ME, MA, MI, MN, MT, NV, NH, NJ, NY, OH, OR, PA, PR, RI, VT, WA, and WV, although several other states are close to the threshold.  The funding for these extended benefits remains to be confirmed.

Reimbursement of benefits?

The CARES Act includes language indicating that the federal government would provide 50% reimbursement to state unemployment trust funds for benefit reimbursed employers, ie non-profit employers.  States were given leeway to reimburse these employers for 50% of unemployment benefits charged to their accounts. Several states have committed to this (please see state-specific updates–>Employer Accounts COVID 19).  One caveat is that any federal reimbursement is contingent upon employers having paid their bills in full, prior to funds being released to the states to be passed on to employers.  If an employer does not remit timely payment for reimbursable bills, they may be precluded from receiving state reimbursement. Accordingly, although reimbursement for 50% of benefits paid should ultimately be credited to employers’ unemployment accounts, employers should budget to pay their full amount of benefits on time. The CARES Act does grant leeway to states to be flexible with payment deadlines, but this is subject to interpretation.

UI or PUA?

States are issuing determinations on claims filed for Covid-19 related separations. A claimant may be ineligible for regular unemployment insurance benefits, but eligible for Pandemic Unemployment Assistance. If someone files for benefits, is disqualified and their separation was a result of the pandemic (i.e.: child care obligations, caring for sick relative, etc.) the employee may be eligible for PUA. Many states have integrated the filing process so that a single filing for benefits will direct the claim to the appropriate program. Other states require a claimant to be disqualified from receiving regular unemployment benefits, and then to refile for the PUA program.  We recommend that employees refer to their state’s unemployment website for further instructions on filing claims.

All claimants receiving UI benefits, PUA, partial unemployment, or Shared Work benefits will receive the additional FEUC of $600 per week through the end of July.