The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law on March 27, 2020 as a federal response to the economic crisis caused by the Coronavirus. As we previously reported, the Act greatly expands unemployment benefits for workers affected by the COVID-19 pandemic, but many questions remained about how the Act would be applied. The DOL recently issued guidance answering some of these questions.
The DOL recently summarized the sections of the CARES Act that apply to unemployment compensation in its April 2, 2020 guidance. DOL also provided instructions to states for implementing the Federal Pandemic Unemployment Compensation Program in its April 4, 2020 guidance, and the Pandemic Unemployment Assistance Program in its April 5, 2020 guidance. Below, we highlight a few of the important takeaways from DOL’s recent guidance.
As previously reported, individuals must meet the eligibility requirements of the individual unemployment compensation program for which they apply and must be no longer working through no fault of their own, but able and available for work.
Pandemic Emergency Unemployment Compensation (PEUC)
Section 2107 of the CARES Act provides up to 13 weeks of benefits to individuals who have exhausted all rights to regular state unemployment compensation, have no right to regular compensation under other state or federal laws, and are able, available, and actively seeking work. The DOL Guidance further clarifies this provision as follows:
- States should offer flexibility in meeting the “actively seeking work” requirement if an individual is unable to search for work because of COVID-19.
- States are prohibited from changing the computation method governing regular unemployment compensation benefits in a way that would reduce the average weekly benefit amount or the number of weeks in which benefits are payable.
Federal Pandemic Unemployment Compensation Program (FPUC)
Section 2104 of the CARES Act provides for a temporary emergency increase in unemployment compensation benefits of $600 per week until July 31, 2020, in addition to the weekly benefit amount an individual receives from other unemployment compensation programs. The new guidance clarifies who is eligible to receive the benefit and just how much an eligible individual is entitled to:
- If an individual is eligible to receive at least $1 of unemployment compensation benefits for the week, that individual is eligible for the full $600 FPUC payment.
- An individual is not entitled to receive FPUC for a week in which the individual is ineligible for regular unemployment or the underlying benefit from another federal program, including PEUC and PUA.
- Individuals are eligible for and may receive FPUC concurrently with payments under state and federal unemployment programs, including PEUC and PUA.
Pandemic Unemployment Assistance (PUA)
Section 2102 of the CARES Act provides for up to 39 weeks of benefits to individuals who are self-employed, seeking part-time employment, or otherwise would not qualify for regular unemployment compensation, as well as those who have exhausted all rights to such benefits. The Guidance from the DOL clarifies how this program will work, including the following:
- To qualify for PUA, an individual must be unemployed, partially unemployed, or unable to work because of certain COVID-19 related reasons set out in the CARES Act.
- Individuals receiving paid sick leave or other paid leave benefits may be eligible for PUA benefits, but the amount of any paid leave benefits will be deducted from the benefit amount.
- Individuals who are offered the option of teleworking with pay and who choose to do so, but whose hours are less than their customary work week, may be eligible for a reduced PUA benefit.
- Individuals who qualify for the PUA benefit also may qualify for the extra $600 under the FPUC (section 2104). The Guidance clarifies that this extra FPUC benefit expires on July 31, 2020, however.
- PUA benefits can extend up to 39 weeks, minus any weeks of regular unemployment compensation and Extended Benefits the individual received. However, the weeks in which an individual collects PEUC benefits are not deducted from an individual’s PUA entitlement, although PEUC entitlement must be exhausted before an individual can become eligible under PUA.
- The PUA period begins February 2, 2020. Claims may be backdated to the first week after that date in which the individual is eligible for PUA.
Coordination of Programs
Assuming their state has entered into an agreement with the federal government, individuals may be eligible for multiple unemployment compensation benefit programs, but must satisfy the eligibility requirements for each particular program to receive benefits under that program. For example:
- An individual eligible for regular unemployment may be eligible to: (1) apply for regular state unemployment; (2) after exhausting regular state unemployment, apply for an additional 13 weeks of PEUC payments; (3) after exhausting PEUC payments, apply for extended benefits if offered by the state; and (4) if the individual is ineligible for or has exhausted regular UI, PEUC, and extended benefits, apply for PUA benefits.
- An individual who is not eligible for regular unemployment compensation, extended benefits under state or federal law or PEUC, and who meets the requirements of section 2102, may apply for and collect PUA benefits for up to 39 weeks.
The Guidance also makes clear that FPUC eligibility ends on July 31, 2020, and no payments for PEUC or PUA may be made for weeks of unemployment ending on or after December 31, 2020.