In response to the growing unemployment numbers due to business slowdowns across the country, the Coronavirus Aid, Relief, and Economic Security (CARES) Act provides expanded unemployment insurance (UI) benefits to workers impacted by COVID-19.  The move is no doubt well intentioned, but serious questions have been raised about the specific benefit design adopted by Congress and the ability of state unemployment agencies—hardly models of efficiency in the best of times—to respond to the deluge of claims now inundating them.  In fact, one of the potentially most attractive UI features in the new law—its short-time compensation provisions—seems likely to face serious obstacles to implementation due to lack of administrative resources and the vagaries of state law.

As addressed in our prior Client Alert, the UI provisions of the CARES Act provides the following:

  • Pandemic Unemployment Assistance (Section 2102): Extended eligibility for individuals who have traditionally been ineligible for UI benefits (e.g., independent contractors, self-employed workers, and individuals who lack sufficient work history);
  • Pandemic Unemployment Compensation (Section 2104): Additional $600 per week, on top of existing state UI benefits, to all UI recipients until July 31, 2020;
  • Pandemic Emergency Unemployment Compensation (Section 2107): Additional 13 weeks of UI benefits, for a total of 39 weeks of federal and state UI benefits; and
  • Funding for State Waivers of One-Week Waiting Period (Section 2105): Federal funding for states to cover costs associated with waiving their standard one-week waiting period requirement, thus allowing individuals to receive UI benefits as soon as they become unemployed.

Eligibility For UI Benefits

What are the traditional requirements for an individual to be eligible to receive UI benefits?

The specific eligibility requirements are established by each state’s UI program.  Generally, states require applicants for UI benefits to show that they are:

  • Totally or partially unemployed;
  • Unemployed through no fault of their own;
  • Available for work;
  • Physically able to work;
  • Ready and willing to accept work; and
  • Actively looking for work.

In addition, workers must typically show that they have worked for the employer long enough and have earned enough wages during the 12-month base period to establish a claim.

How have states adjusted the traditional requirements for eligibility in light of COVID-19?

A growing number of states have relaxed some of the traditional eligibility requirements for workers who have temporarily lost their jobs or whose hours or pay have been reduced due to COVID-19.  For example, some states no longer require furloughed employees—whose employer has temporarily ceased operations with the expectation that the employee will return to work once business resumes—to be actively searching for work amid the COVID-19 pandemic.  As another example, individuals who are unable to go to work because their place of employment has been shut down by a government order may be eligible to collect UI benefits.

How much in UI benefits can an individual receive?

The maximum weekly benefit varies by state.  For example, the maximum weekly benefit in New York and Florida is $504 and $275, respectively.  As discussed below, the CARES Act provides all eligible individuals with an additional $600 a week until July 31.  The number of weeks for which an individual may receive benefits depends on the state.

How are UI benefits determined for workers who are partially employed?

In most states, an individual is considered to be partially unemployed if they are working less than full-time and their earnings are less than the weekly benefit amount that they would be eligible for if they were unemployed.  Such employees may receive partial UI benefits, which are calculated using each state’s specific metrics.

Are employers required to assist employees with filing UI claims?

Amid the COVID-19 landscape, some states now request or even require that employers file for unemployment on behalf of their employees.  For example, Georgia employers must file partial claims on behalf of their employees if the employer temporarily reduces work hours or has no work available for a short period.  Other states request that employers provide eligible employees with UI information in order to expedite the UI application process.  As a practical matter, employers should inform employees of their potential eligibility for UI benefits.  Providing information and assistance to employees during this difficult time may improve employee morale and generate goodwill.

UI Benefits Provided By CARES Act

How has the CARES Act extended workers’ eligibility for UI benefits?

Under the Pandemic Unemployment Assistance (PUA) provision of the CARES Act, individuals who are not traditionally eligible for UI benefits—such as self-employed workers, independent contractors, gig economy workers, and those with a limited work history—may now be eligible.  The PUA program provides UI payments for weeks of unemployment beginning on or after January 27, 2020 and ending on or before December 31, 2020, for a maximum of 39 weeks.  To obtain UI benefits under PUA, the worker must apply through the UI program of the state in which he or she resides.

How much in additional UI benefits can individuals receive?

Under the CARES Act’s Pandemic Unemployment Compensation (PUC) provision, individuals who are eligible for state UI benefits would also be eligible to receive $600 per week in addition to his or her weekly benefit amount as calculated under state law.  The extra weekly payment of $600 ends July 31, 2020.

Can workers receive UI benefits if they were unemployed before the CARES Act went into effect or if they have already exhausted their state UI benefits?

The Pandemic Emergency Unemployment Compensation program of the CARES Act provides up to 13 additional weeks of federally funded payments to individuals who are close to exhausting (or have exhausted) their state UI benefits and who are actively seeking work (subject to flexibilities related to COVID-19).  Some states provide UI payments for up to 26 weeks.  This provision, which expires December 31, 2020, is intended to assist workers who remain unemployed after their state UI benefits have run out by extending the total UI coverage to up to 39 weeks.