The U.S. DOL Issues Updated Guidance on CARES Act Unemployment Programs

Since our March 28, 2020 post, “Phase Three COVID-19 Response Bill Now Law: What it Means for Businesses and Employees,” the United States Department of Labor (DOL) has issued three additional Unemployment Insurance Program Letters (UIPL), No. 15-20, No. 16-20, and No. 17-20, to provide additional guidance to states on the administration of the three unemployment insurance programs available under the CARES Act.

UIPL No. 15-20

UIPL No. 15-20, issued on April 4, 2020, addresses Section 2104 of the CARES Act—Federal Pandemic Unemployment Compensation (FPUC) benefits—which provides “eligible” individuals who are already collecting state-provided unemployment benefits an additional $600 per week in federal benefits through July 31, 2020.

Who is eligible for the additional $600 FPUC payments?

Individuals collecting regular unemployment compensation under state programs, Pandemic Emergency Unemployment Compensation (PEUC), Pandemic Unemployment Assistance (PUA), Extended Benefits (EB), Short-Time Compensation (STC), Trade Readjustment Allowances (TRA), Disaster Unemployment Assistance (DUA), and Payments under the Self-Employment Assistance (SEA) program. FPUC is not available, however, for those receiving “additional benefits” (referred to as “extended benefits” by state UC programs) that extend the duration of benefits during high unemployment to those in approved training programs who have exhausted benefits, or for several other reasons.

Individuals must be eligible for and receiving benefits under the above programs in order to be eligible for and receive FPUC benefits.

Are all eligible individuals entitled to the full $600 weekly payment?

Individuals earning at least $1 in a qualifying week under any of the above programs are entitled to the full $600 FPUC weekly payment. States are required to determine the weekly benefit amount under one of the above programs. So long as the benefit amount is at least $1, the individual is entitled to the full $600 weekly benefit.

This eligibility threshold has raised some concerns that an individual who is out of work or working reduced hours could, through the combination of wages (if applicable), state unemployment benefits, and FPUC benefits collect more in UC than the individual would be paid if he or she were working his or her regular schedule. Although this concern was raised before this UIPL was issued, and many thought the DOL would address it, it has not expressly done so, and the possibility of UC benefits in excess of actual earned wages remains for individuals at lower earning levels.

When is the $600 payment available?

FPUC will be available for weeks of unemployment starting on or after the date on which the applicable state enters into an agreement with the DOL and continues through the week of unemployment ending on or before July 31, 2020. A state that is unable to immediately pay FPUC benefits in the week following the execution of its agreement with the DOL must provide retroactive payments to eligible individuals for the weeks they would have been entitled to the benefit.

New Jersey, New York, and Pennsylvania have each offered guidance to applicants. See NJ “Workers: Frequently Asked Questions During the Coronavirus Emergency,” NY “What You Need to Know and Do About the Cares Act,” and PA “Information for Pennsylvania Employees Impacted by COVID-19.” New York has indicated that FPUC payments began on April 5, 2020. In New Jersey, benefits began to arrive on April 14, 2020 for the week ending March 29, 2020. Pennsylvania has not specified when payments will begin, but they will be retroactive to April 4, 2020.

How do individuals know if they are eligible for FPUC?

States must notify an individual of his or her entitlement to FPUC. The notification will include both the beginning and end dates for the FPUC program. An individual does not need to file a separate unemployment claim for FPUC.

How will FPUC be paid?

States have some flexibility in how they issue FPUC payments. They may pay the additional $600 either (1) at the same time and in the same manner as any regular unemployment compensation otherwise payable for the week involved; or (2) at the option of the state, by payments that are made separately from, but on the same weekly basis as, any regular UC otherwise payable. New Jersey has already indicated that the payment will be made separately.

How are FPUC benefits funded?

FPUC is 100 percent federally funded. Employers will not be charged for FPUC benefits.

UIPL No. 16-20

UIPL No. 16-20, issued on April 5, 2020, addresses Section 2102 of the CARES Act—Pandemic Unemployment Assistance (PUA)—which expands coverage to certain individuals who are not otherwise eligible for UC under state law and are unemployed due to certain COVID-19 related reasons.

Who is eligible for PUA benefits?

PUA provides benefits to individuals who are “not eligible for regular unemployment compensation or extended benefits under state or Federal law or PEUC, including those who have exhausted all rights to benefits.” It also covers individuals who have not historically been eligible for unemployment benefits, including individuals who are self-employed, those seeking-part-time employment, those lacking sufficient work history, independent contractors, and some “gig” workers.

“PUA provides up to 39 weeks of benefits to qualifying individuals who are otherwise able to and available for work … except that they are unemployed or partially unemployed, or unable or unavailable to work” due to one of these COVID-19 related reasons:

1. The individual has been diagnosed with COVID-19 or is experiencing symptoms of COVID-19 and is seeking a medical diagnosis.
2. A member of the individual’s household has been diagnosed with COVID-19.
3. The individual is providing care for a family member or a member of the individual’s household who has been diagnosed with COVID-19.
4. 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.
5. 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.
6. The individual is unable to reach the place of employment because the individual has been advised by a healthcare provider to self-quarantine due to concerns related to COVID-19.
7. 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.
8. 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.
9. The individual has to quit his or her job as a direct result of COVID-19.
10. The individual’s place of employment is closed as a direct result of the COVID-19 public health emergency.

Some of these PUA qualifying reasons are also qualifying reasons for emergency paid sick leave under the Families First Coronavirus Response Act (FFCRA) and for state-provided paid sick leave. The DOL has explained that PUA is not available to individuals who are receiving paid leave benefits, including paid sick leave. However, individuals receiving paid leave benefits for less than their regular workweek may still be eligible for partial PUA benefits.

PUA is not available to individuals who have the ability to telework with pay. If an individual has the ability to telework with pay but works less than the individual worked prior to the COVID-19 pandemic, the individual may be eligible for partial weekly benefits.

Some of the PUA qualifying reasons are likely short term. For example, a child’s school is not “closed as a direct result of COVID-19” after the date the school year was originally scheduled to end. In addition, an individual who is suffering from COVID-19 and temporarily unable to work would not be entitled to benefits when the individual has recovered, so long as he or she has a job to which to return.

When are PUA benefits available, and what is the benefit amount?

PUA benefits are available after the state enters into an agreement with the DOL and may be backdated to February 2, 2020 if the individual meets the eligibility requirements. PUA is not available for weeks of unemployment ending after December 31, 2020. As noted above, NJ, NY, and PA have already entered into agreements with the DOL and have added information to their websites concerning PUA benefits.

The PUA weekly benefit will include the weekly benefit amount under state law plus the FPUC payment. PUA can be provided for up to 39 weeks, minus any weeks during which the individual received regular compensation of extended benefits under state or federal unemployment compensation law.

How will PUA claims be paid?

Generally, PUA claims are subject to the same filing and determination procedures as regular UC benefits under applicable state law. In processing PUA claims, states are required to verify that individuals are not entitled to regular unemployment benefits. If an individual’s eligibility for regular benefits is questionable (for example, where there are wages in the base period but no claim is filed or where a job separation has not been adjudicated), then the state must first require the individual to file for regular unemployment benefits. If the individual is subsequently disqualified from receiving state benefits, then the state may consider the individual for PUA benefits.

How are PUA benefits funded?

PUA is 100 percent federally funded. Employers will not be charged for FPUC benefits.

UIPL No. 17-20

UILP No. 17-20, issued on April 10, 2020, addresses Section 2107 of the CARES Act—PEUC—which provides “eligible individuals with up to 13 additional weeks of benefits to individuals who have exhausted their regular unemployment compensation entitlement.”

Who is eligible for PEUC benefits?

PEUC provides benefits to individuals who:

1. Have exhausted all rights to regular compensation under state law or federal law with respect to a benefit year that ended on or after July 1, 2019.
2. Have no rights to regular compensation with respect to a week under any other state or federal UC law, or to compensation under any other federal law.
3. Are not receiving compensation with respect to a week under the UC law of Canada.
4. Are able to work, available to work, and actively seeking work, while recognizing that states must provide flexibility in meeting the actively seeking work requirement if individuals are unable to search for work because of COVID-19, including because of illness, quarantine, or movement restrictions.

An individual has exhausted benefits under the following circumstances:

• “[N]o payments of regular UC may be made under state law because such individual has received all available regular UC based on employment or wages during such individual’s base period”; or
• “[T]he individual’s right to such regular UC has been terminated by reason of the expiration of the benefit year with respect to which such rights existed (excluding any benefit year that ended before July 1, 2019).”

When are PEUC benefits available?

PEUC benefits are available after the state enters into an agreement with the DOL. PEUC is not available for weeks of unemployment ending after December 31, 2020. Depending on when the week of unemployment in a particular state ends (either on Saturday or Sunday), the first week for which these benefits were payable was either the week ending April 4, 2020 or the week ending April 5, 2020.

How will PEUC claims be paid, and what is the benefit amount?

As with PUA claims, PEUC claims are subject to the same filing and determination procedures as regular UC benefits under applicable state law, and states are required to verify that individuals are not entitled to regular unemployment benefits. States are required to identify individuals who may be eligible for PEUC and provide those individuals with notice of their potential entitlement.

The PEUC weekly benefit amount depends on whether the individual is totally unemployed or partially or part-total unemployed. In both cases, PEUC includes both the weekly benefit amount under applicable state or federal law and FPUC payment under Section 2102 (for weeks of unemployment ending on or before July 31, 2020).

How are PEUC benefits funded?

PEUC is 100 percent federally funded. Employers will not be charged for PEUC benefits.

Coordination of CARES Act Unemployment Benefits

Thankfully, the DOL has offered some guidance on the interplay between the federal unemployment programs created by the CARES Act in UIPL No. 14-20. The UIPL distinguishes between those eligible for regular UC and those who are not.

For those who are eligible for regular UC, the individual must first apply for and receive regular UC benefits, the amount and duration of which are determined by the state’s program. Once regular UC is exhausted, the individual may then be eligible for PEUC for a period limited to 13 weeks. The next available benefits depend on whether the state has “triggered on” to extended benefits (EB) under the Federal-State Extended Unemployment Compensation Act of 1970. If the state has triggered on, then the individual may be eligible to receive EB up to 13 or 20 weeks, which depends on the state. If there are no EB benefits, then the individual may be eligible to receive PUA if one of the COVID-19 related reasons applies. These benefits are limited to 39 weeks, less any weeks that the individual received regular UC or EB. Notably, the 13 weeks that the individual received FEUC are not deducted from the PUA entitlement.

For individuals who are not eligible for regular UC, extended benefits under state or federal law, or PEUC, the individual may be entitled to PUA if he or she meets the PUA eligibility requirements. The same 39 weeks are available, less any previously received regular UC and EB.

Layered on top of all of these benefits and until July 31, 2020, an individual receiving regular UC, PEUC, PUA, EB, or any of the other benefits listed in that section of this blog would also receive the $600 weekly FPUC benefit.

If you have any questions regarding this blog, please feel free to contact any attorney in the Gibbons Employment & Labor Law Department.