The new two plus trillion dollar stimulus package — otherwise known as the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) — contains a massive unemployment expansion called the “Relief for Workers Affected by Coronavirus Act” (“the Relief for Workers Act”). In short, the Relief for Workers Act expands unemployment benefits available to millions of workers impacted by the coronavirus. Although the federal government will provide the funding, state unemployment agencies will administer and issue the benefits. Below is an overview of how the program will work.
Categories of Eligible Workers: Eligible Employees and Covered Individuals
Two categories of workers are eligible for new and/or enhanced unemployment benefits under the Relief for Workers Act. First, employees who are currently eligible for unemployment benefits under state law (“Eligible Employees”) will temporarily receive a $600 per week enhancement. Second, “Covered Individuals” who are not currently eligible for unemployment benefits under state law may receive “Pandemic Unemployment Assistance” equal to the benefits normally available under the federal disaster unemployment program (as calculated under existing federal law), plus $600 per week.
As defined in detail below, “Covered Individuals” are workers who are impacted by COVID-19 and unable to fully work but not otherwise eligible for state unemployment benefits. This includes, for instance, self-employed workers, independent contractors in the gig economy, and employees with a short work history.
Effective and End Date
To receive federal funding, states must immediately incorporate the new requirements created by the Relief for Workers Act. The $600 per week enhancement for “Eligible Employees” and “Covered Individuals” lasts four months, until July 31, 2020. The Pandemic Unemployment Assistance for “Covered Individuals” is retroactively applied to January 27, 2020, and lasts until December 31, 2020.
Weekly Benefit Enhancement Without Any Negative Impact
“Eligible Employees” and “Covered Individuals” will receive an extra $600 per week in addition to any benefits the worker would qualify for under either: 1) the state unemployment insurance program; or 2) the Pandemic Unemployment Assistance Program. State agencies can make the normal payment and the additional $600 payment simultaneously or separately, so long as both payments are made on a weekly basis.
The Relief for Workers Act will not negatively impact any individuals already receiving unemployment benefits.
Extended Timeline and Elimination of Waiting Periods
The Relief for Workers Act provides “Covered Individuals” with an additional 13 weeks of Pandemic Unemployment Assistance on top of the maximum time normally allowed by the employee’s resident state unemployment system. For example, in Oregon, an unemployed resident is normally entitled to benefits for up to 26 weeks, so a “Covered Individual” would be eligible for up to 39 weeks of Pandemic Unemployment Assistance.
But to be clear, the extra $600 enhancement payment for both “Eligible Employees” and “Covered Individuals” will only last for up to four months, until July 31, 2020. The 13-week extension also does not apply to normal unemployment benefits for Eligible Employees.
To receive federal funding under the Relief for Workers Act, state agencies are required to waive any waiting week requirements. As a result, “Eligible Employees” and “Covered Individuals” will receive compensation for the first week of partial or complete unemployment. Please note many states have already waived the one week period under emergency rules and in accordance with the Families First Coronavirus Response Act (“FFCRA”), which was signed into law on March 18, 2020.
Definition of “Covered Individuals”
“Covered Individuals” consist of the following categories of workers not at full-employment due to COVID-19:
- The individual has been diagnosed with COVID-19 or is experiencing symptoms of COVID 19 and is seeking a diagnosis;
- A member of the individual’s household has been diagnosed with COVID-19;
- The individual is providing care for a family member of the individual’s household who has been diagnosed with COVID-19;
- The individual must stay home and cannot work to care for a child unable to attend school or child care due to a COVID-19 related public health emergency;
- 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;
- The individual is unable to reach the place of employment because a health care provider has advised the individual to self-quarantine due to concerns related to COVID-19;
- The individual was scheduled to commence working and does not have a job or is unable to reach the job as a direct result of the COVID-19 public health emergency;
- The individual has become the breadwinner or major support for a household because the head of household has died as a direct result of COVID-19;
- The individual has to quit their job as a direct result of COVID-19;
- The individual’s place of employment is closed as a direct result of the COVID-19 public health emergency; or
- The individual meets any additional criteria established by the Department of Labor for unemployment assistance under the Relief for Workers Act.
Importantly, “Covered Individuals” include those who are not traditionally covered by state unemployment laws, such as those who are self-employed, seeking part-time employment, do not have sufficient work history, or have exhausted their unemployment benefits. But a worker is not a “Covered Individual” if: 1) the individual is eligible to telework with pay; or 2) the individual is receiving paid sick leave or other paid leave benefits.
State Work Search Requirements May Still Apply
The conditions of state law applying to claims for unemployment compensation related to searching for work still generally apply, subject to exceptions that may be issued by the Department of Labor. At this time, many states have suspended work search requirements, so employers should encourage employees to confirm work search requirements with their respective state agency. In most cases, furloughed and stand-by employees can satisfy the requirement by checking in with their supervisor. But again, the frequency of the check-in and related requirements will be determined on a state-by-state basis.
Impact on Prior Denials
Employees who were previously denied unemployment benefits because they lacked sufficient work history or failed to meet income-based eligibility requirements may now be eligible for benefits dating back to January 27, 2020.
Funding for Short-Term Compensation Programs
The Relief for Workers Act also provides states with federal funds to assist with short-time compensation programs, often known as “work-share” programs. Short-term compensation programs are optional state programs that allow employers experiencing a temporary reduction in business to lower the average hours of employees in lieu of laying them off. Interested employers should contact their local state agency for further details.
Employer Considerations
Businesses across the U.S. are making difficult workforce decisions due to government orders and economic ripples caused by the coronavirus. These decisions include, among other things, restructuring schedules, reducing hours, issuing leave, and temporary and permanent layoffs. Before your business takes further employment action, we recommend consulting with counsel to discuss how the Relief for Workers Act may provide another source of support for your workforce
For more information, consult Lane Powell’s COVID-19 Resource Center or contact Hank Stebbins or Will Weiner.