Kramer, Elkins & Watt

Unemployment Benefits under CARES

Unemployment Benefits under CARES

 

 

 

 

 

 

On March 27, 2020 the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) became law.  Among many provisions, the bill bolsters unemployment aid for those affected by the COVID-19 pandemic by expanding both the aid available and range of people eligible for the aid. The full Act can be accessed here.

Unemployment insurance is a dual state and federal program whereby the federal government provides guidelines to states as far as what states need to contain in the programs, and some funding is provided, though it is typically largely funded by a tax paid by employers. The changes to unemployment insurance under CARES are items which states need to adopt under an agreement with the federal government. It is expected that Wisconsin will adopt the provisions listed herein.

The focus of this article will be the provisions of additional unemployment benefits provided for in CARES and the effects in Wisconsin. The subtitle of the CARES Act providing such support is referred to as the “Relief for Workers Affected by Corona Virus Act” and contains three sections (with confusingly similar names) providing unemployment support to individuals:

  • Pandemic Unemployment Assistance (“PUA”) which expands the pool of individuals eligible for unemployment insurance, allows for benefits collection for a total of 39 weeks, through December 31, 2020, and provides an additional $600 weekly in addition to what would normally be provided under regular state benefits;
  • Federal Pandemic Unemployment Compensation (“FPUC”) which provides an additional $600 weekly to individuals who are already or otherwise become eligible for benefits under state law, until July 31, 2020;
  • Pandemic Emergency Unemployment Compensation (“PUEC”) which provides an additional 13 weeks of benefits, through December 31, 2020, to individuals who have exhausted or will exhaust benefits they are already receiving pursuant to regular state law unemployment insurance benefits.

 

Under all three sections (PUA, FPUC, and PUEC), there is a weekly benefit of $600 in addition to regular state benefits. The Federal government will be compensating states for both the full amount this extra $600 additional costs to administer the programs, and the additional regular state weekly amount available under PUA. Many states, including Wisconsin, are still working out the details of exactly when the extra weekly $600 will be available to individuals. Currently, the Wisconsin Department of Workforce Development (DWD) estimates that the extra weekly $600 will be available mid- to late-April. The DWD website is the best place to look for updates on timing of the extra weekly $600.

Regular state unemployment benefits are available, generally, to those individuals who meet various wage and work requirements that are unemployed through no fault of their own. For more details on this, visit Unemployment Insurance Questions Answered and How do Probationary Periods Affect Unemployment Insurance?

CARES casts a wide net to include a variety of individuals that would otherwise be left out of traditional unemployment benefits. How wide? Wide enough to catch just about anyone who has been remotely affected by this pandemic.

 

Pandemic Unemployment Assistance (“PUA”) [i]

Who is eligible for PUA?

PUA expands the pool of individuals eligible for unemployment benefits to include the following:

  • Individuals not already eligible for compensation or benefits under existing state or federal law;
  • Individuals who have exhausted regular unemployment;
  • Individuals who are self-employed; and
  • Individuals without sufficient work history for typical unemployment insurance

 

In order to qualify for PUA, the above-mentioned individuals must also be able and available to work, but are unemployed or partially unemployed, or unable or unavailable to work because of any one of the following reasons:

  • the individual has been diagnosed with COVID-19 or is experiencing symptoms of COVID-19;
  • a member of the individual’s household has been diagnosed with COVID-19;
  • The individual is providing care for a family member or a member of the individual’s household that has been diagnosed with COVID-19;
  • a child or other person in the household for which the individual has primary caregiving responsibility is unable to attend school or another facility that is closed as a direct result of the COVID–19 public health emergency and such school or facility care is required for the individual to work;
  • 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 the individual has been advised by a health care provider to self-quarantine due to concerns related to COVID–19;
  • the individual was scheduled to commence employment 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 the household has died as a direct result of COVID–19;
  • the individual has to quit his or her 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 Secretary of Labor for unemployment assistance under this section.

 

Note, an individual does not qualify for PUA if either of the following applies:

  • the individual can telework with pay; or
  • the individual is receiving any type of paid leave benefits

 

How long are individuals eligible for PUA?

PUA eligible individuals may receive unemployment benefits for a maximum of 39 weeks.

  • PUA benefits will be available until the period of unemployment caused by COVID-19 ends or at the end of 2020, whichever is shorter.
  • Eligible individuals will be able to receive benefits as far back as January 27, 2020, if they were unemployed at that time.

 

How much do individuals receive under PUA?

Individuals will receive the sum of the following:

  • Weekly Benefit Rate. The weekly benefit amount authorized by the state in which the individual completed work; and
    • In Wisconsin, the maximum benefit amount is $370. For a detailed analysis of how this benefit amount is calculated, please look to the following KEWTips articles, Unemployment Insurance Questions Answered and How do Probationary Periods Affect Unemployment Insurance?
  • $600 per week.

So, this means that eligible individuals may receive up to $970 each week.

 

Do individuals need to search for work under PUA?

No. PUA makes no mention of a work search requirement.

 

Do self-employed individuals that are still operating but receive a cut in pay qualify for PUA?

No. The owner of a business that has seen a slow down in business will not qualify for PUA.

However, an owner of a business that shuts its doors due to COVID, will qualify for the $600 weekly benefit under PUA.

 

Federal Pandemic Unemployment Compensation (FPUC)[ii]

FPUC is a tool to instantly increase the amount of unemployment benefits for individuals already eligible to receive traditional state unemployment benefits.  In other words, individuals that qualify under state law and not PUA.

FPUC is a weekly benefit of $600, in addition what the individual receives under traditional state unemployment benefits.

FPUC terminates on July 31, 2020.

 

Pandemic Emergency Unemployment Compensation[iii] (“PEUC”)

In short, PEUC extends the unemployment insurance benefit period, for those who are eligible under regular state benefit law (not PUA) by 13 weeks.

 

Who is eligible for PEUC?

To be eligible for PEUC, individuals must

  • Have exhausted all rights to regular state unemployment compensation with respect to a single benefit year and have no rights to other unemployment compensation (this includes individuals who are currently receiving benefits but exhaust them while PEUC is in effect); and
  • Be able, available and actively seeking work.

 

Can a partially employed individual be eligible for PEUC?

No. An individual must be completely unemployed to be eligible for PEUC. So, someone who’s hours are reduced would not be eligible for PEUC.

 

Do individuals need to search for work to be eligible for PEUC?

Not at the moment, in Wisconsin. Governor Evers’ Emergency Order No. 7, issued on March 18, 2020, stated that the public health emergency satisfies the work search requirement. So, effectively, there is no work search requirement through the end of the public health emergency, which is currently April 24, 2020.  Once Wisconsin’s public health emergency expires, individuals receiving PEUC will again be required to search for work in accordance with the state law requirements.

 

How much do individuals receive under PEUC?

Individuals will receive the sum of the following:

  • Weekly Benefit Rate. The weekly benefit amount authorized by the state in which the individual completed work; and
  • $600 per week, up until July 31, 2020.

 

How long will an individual be eligible for benefits under PEUC?

Individuals are eligible for PEUC benefits for 13 weeks (after exhausting their regular benefits).

From a practical perspective, this means that an individual in Wisconsin that had been receiving unemployment benefits since before COVID, will now be able to extend the period of receiving those benefits an additional 13 weeks for a total of 39 weeks.

 

Eliminating the Waiting Week[iv]

Typically, claimants in Wisconsin face a one week waiting period when applying for unemployment benefits. The federal government will provide 100% reimbursement for states to waive the one week waiting period before an otherwise qualified individual can receive unemployment benefits.

In Wisconsin, we are still waiting for the implementation of the waiver of the one-week waiting period.

 

What is charged to the employer’s account?

Under PUA, none of the benefits are charged to the employer’s account, not even the state weekly amount.  Under FPUC and PEUC, the PUC $600 is not charged to the employer, but the regular state benefits are, just like they would be without the pandemic.

 

 

[i] § 2102

[ii]§ 2104

[iii]§ 2107

[iv]§ 2105