Coronavirus Aid, Relief, and Economic Security Act (“CARES” Act)
adopted by Congress on March 27, 2020.
By Beth Sufian, JD
Nothing in this article is meant to be legal advice but is only meant as information.
A. COVID-19 Pandemic Unemployment Compensation Benefits.
1. What is the unemployment compensation benefit program?
Unemployment compensation, or unemployment insurance, is a joint state and federal program that provides cash benefits to eligible workers when they are capable of working but employment is not available. Each state administers its own separate unemployment insurance program, but all states follow the same guidelines established by federal law.
2. Unemployment benefit changes.
Each state sets its own unemployment insurance benefits eligibility guidelines. Unemployment benefits under ordinary circumstances range between 50% and 60% of wages and are typically paid for up to 26 weeks in most states. Because of the unusual and extraordinary circumstances of the COVID-19 pandemic, Congress has made several adjustments and enhancements to the program.
Under the CARES Act, Congress created the Federal Pandemic Unemployment Compensation (“FPUC”) program, which provides a federal enhancement of state unemployment benefits. The FPUC pays an additional $600 a week to the amount workers usually receive in unemployment compensation. Additionally, the FPUC adds 13 weeks to the benefit period provided under current state law. The typical maximum benefit period in most states is 26 weeks. With the additional 13 weeks under FPUC, the maximum benefit period in most states is now 39 weeks.
3. Can self-employed or independent contractors receive unemployment benefits?
Under ordinary circumstances, most states disqualified claimants who are self-employed individuals, individuals unable to work, independent contractors, workers without recent earnings history, or workers who refused suitable work without good cause.
However, because of the extraordinary circumstances of the COVID-19 pandemic, the CARES Act created the Pandemic Unemployment Assistance (“PUA”) Program, which expands the availability of unemployment benefits to workers who usually would not qualify for such benefits. Self-employed workers, independent contractors, gig-workers, those with limited work history, workers seeking part-time employment, and others who would not usually qualify are now able to receive weekly unemployment compensation payments. To qualify for the PUA benefit, the worker must be:
a. ineligible for any other state or federal unemployment benefits;
b. unemployed, partially unemployed, or cannot work due to the COVID-19 public health emergency; and,
c. cannot tele-work or receive paid leave.
The benefit under the PUA equals the usual amount of state unemployment benefits plus $600 per week for up to 39 weeks.
4. Does an employer have to terminate employment or lay off a person for that person to receive unemployment insurance payments?
No. An employer can furlough workers, who will then be eligible for unemployment insurance payments. It is also possible for an employer to continue to pay an employee’s health benefits during a furlough, which would still allow the employee to receive unemployment insurance payments until they are called back to work. Depending on the way the state calculates unemployment insurance payments, it may be possible for those with reduced hours or reduced pay to receive unemployment insurance payments as well.
5. Is it true that people who were not laid off or furloughed can also qualify for unemployment benefits?
Yes. If the reason the work is not available is related to COVID-19, individuals may qualify for PUC if they provide a self-certification that they had to stop work for a specific COVID-19-related reason and they do not have the ability to tele-work with pay, do not have access to paid sick leave, and do not have access to other paid-leave benefits.
6. What does it mean to “self-certify”?
PUC will cover individuals not otherwise covered by traditional unemployment benefits. To receive the expanded benefits under the CARES Act, the worker must self-certify that he or she is able to work and available for work (as defined in the state unemployment insurance law); however, the worker is unemployed, partially unemployed, unable to work, or unavailable to work for one of the following COVID-19 related reasons:
a. worker is diagnosed with COVID-19;
b. worker has symptoms of COVID-19 and is in the process of seeking a medical diagnosis;
c. worker’s household member has COVID-19;
d. worker is providing care to a household member with COVID-19;
e. worker is the primary care giver for a child (or other person in the household) who is unable to attend school or daycare due to COVID-19 public health emergency;
f. worker is unable to reach work due to a quarantine;
g. worker is unable to attend work because a healthcare professional advised him or her to self‑quarantine;
h. worker is scheduled to commence employment but unable to start or reach the job because of COVID-19;
i. worker is the sole wage earner in his or her household due to death of the head of household as a result of COVID-19;
j. worker was required to quit his or her job as a result of COVID-19;
k. worker’s place of employment closed due to COVID-19; or
l. worker is self-employed, is seeking part-time employment, does not have sufficient work history, or otherwise would not qualify for unemployment benefits under another state unemployment program.
7. Who is not eligible?
Ineligible individuals under the CARES Act include:
a. individuals who can tele-work with pay;
b. individuals who are already receiving paid leave under their employer’s plans or policies;
c. individuals who are already receiving paid leave under an applicable federal, state or local law; and
d. new entrants into the workforce who have not been employed before who cannot find employment
8. Can I apply for Unemployment benefits immediately, or is there a waiting period?
Usually, most states required a one-week waiting period before a person can file for unemployment insurance. However, the CARES Act encourages states to end one-week waiting periods by providing 100% federal funding for the first week for states without one-week waiting periods. It remains up to each state to remove existing one-week waiting periods.
9. If an employer reduces hours because of COVID-19, can a worker receive unemployment insurance payments?
Yes, individuals can receive benefits for partial unemployment. In a few states, an individual is considered totally unemployed in a week even though small amounts of wages are earned. 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 to receive if they were unemployed.
10. Do unemployment insurance payments count when determining eligibility for federal means-tested programs?
Yes, both the usual state unemployment benefit and the $600-per-week federal enhancement under the CARES Act are counted as unearned income for federal means-tested programs, such as SSI, SNAP, Medicaid, ACA premium credits, TANF, housing assistance, or other income-related federal programs.
For individuals receiving SSI, the Social Security Administration will count unemployment benefits as unearned income. This means a person who receives SSI benefits will have their monthly SSI benefit reduced by one dollar for every dollar received in unearned income during that month.
It is important to note that unemployment benefits are treated differently from the COVID-19 stimulus payment. Unemployment insurance benefits will be counted as income and unemployment insurance benefits will affect the recipient’s eligibility for federal means-tested programs. The CARES Act stimulus payment will not be counted as income and the stimulus payment will not affect the recipient’s eligibility for federal means‑tested programs.
11. Can I receive both the stimulus payment and unemployment benefits?
Yes, stimulus payments do not affect receipt of state or federal unemployment compensation.
Beth Sufian has practiced law for 30 years. Beth is 54 and has cystic fibrosis. Beth is the current President of CF Roundtable. You may contact her with your legal questions about CF-related issues at CFLegal@sufianpassamano.com.