Covid-19 unemployment insurance
Flexibilities updated 31 march 2020
- Section 2104, which provides most individuals an emergency increase in traditional unemployment insurance (UI) benefits of $600 per week through July 31, 2020, likely increasing benefits beyond what many workers were earning before becoming unemployed;
- Section 2102, the Pandemic Unemployment Assistance program, which provides up to 39 weeks of UI to people not otherwise eligible for regular unemployment compensation (including the self-employed and those who have exhausted their regular and extended benefits); and
- Section 2107, which creates the Pandemic Emergency Unemployment Compensation program to provide 13 weeks of emergency UI for people who remain unemployed after they have exhausted their benefits or are not otherwise eligible for benefits.
- What if our company uses Independent Contract labor?The plan includes self-employed people. Unemployment assistance will be available to suchindependent contractors under Section 2102 of the CARES Act if the individual certifies that heor she:
- is diagnosed with COVID-19 or experienced symptoms or is seeking a diagnosis,
- has a member of his or her household that has been diagnosed with the illness,
- is providing care to a family member with COVID-19,
- has primary caregiving responsibility to a child that is unable to attend school due to COVID-19,
- cannot reach his or her place of work because of a quarantine or advice of a health care provider to self-quarantine,
- has become a breadwinner after the head of household has died from COVID-19,
- has had to quit his or her work as a result of Coronavirus, or
- has a work location that is closed as a direct result of a COVID-19 public health emergency.
- What if our company uses Independent Contract labor?The plan includes self-employed people. Unemployment assistance will be available to suchindependent contractors under Section 2102 of the CARES Act if the individual certifies that heor she:
Pandemic unemployment assistance is available not only if such independent contractors are“unemployed” but also if “partially unemployed.” This benefit is not available,though,if andwhen such self-employed individuals are receiving paid sick leave or other paid leave benefits,including such benefits available to independent contractors under the federal Families FirstCoronavirus Response Act or a state law providing such paid benefits to self-employed workers.
- How much will my employees receive in unemployment assistance?
Typically,when employees do not receive wages in any given week,or receive wages that areless than the WBA (weekly benefit amount) as determined by individual state unemploymentstatutes,they are eligible for unemployment benefits. This situation does not change for COVIDclaims. If individuals are out of work,or are not receiving wages in any given week due to theCOVID crisis,they will be eligible for unemployment benefits. The amount of the award willdepend on the wages they have received historically over the past 18 months. Those amountsdiffer by state and range from $10.00 to as high as $823.00. Please see the specific amounts bystate listed on our website at UCAdvantage Inc. Resources
The CARES Act further allows for an expansion of up to an additional $600.00 over and aboveweekly benefits to be paid to eligible COVID impacted employees. As an example,if anemployee is given a typical unemployment claim award of $300.00 per week for reduced hoursor no hours in a given week,that employee will receive the $300.00 and an additional $600.00for a total weekly benefit amount of $900.00 – if they are deemed eligible.
- Who is paying for the unemployment benefits?
The only thing that is clear at this point is that the Fed. is going to reimburse states 100% of theadditional $600.00 that will be paid over and beyond the typical weekly benefit amountawarded. The baseline unemployment award becomes the question at this point. Most stateshave provisions to be able to non-charge employers for unemployment claims under extremecircumstances,which the COVID issue would certainly qualify. In a recent memo from JohnPallasch,Assistant Secretary,Employment and Training Administration Advisory System with the U. S. Department of Labor,he addresses the non-charging of benefits paid for the COVIDrelated claims:d. Employer charging and trust fund impacts,p. 5,Many states do not chargeindividual employers for benefit costs under certain circumstances. These “noncharging”provisions are found in practically all state experience-rating laws. When determining in thecontext of COVID-19,whether certain unemployment benefits should be charged to employers,states should consider how to fairly distribute the costs to employers. If states considerchanging their laws to increase availability of UI benefits in the context of the COVID-19 virus,they should also consider the impact on trust-fund solvency. There are currently 21 states andjurisdictions below the recommended solvency standard and only 31 states that meet theeligibility criteria for interest free borrowing. State UI Trust Fund Solvency Report
- When will the state process the unemployment insurance claim?
States have eliminated the waiting week for unemployment benefits to ensure thatunemployment benefit payments will be received by the worker as soon as possible. Under thisbill,the federal government would also fully finance the first week of benefits throughDecember 31,2020,for states that lift the one-week waiting period. Many states currentlyimpose a one-week waiting period because federal funds are not available for the first week after a claim is filed,although the Families First Act,enacted on March 18,2020,now allowsstates to receive federal matching for the first week.
- What about Extended Benefits and how do they affect Employers?
If unemployment reaches a high enough level in a given state,UC benefits may be extendedunder the permanent Extended Benefit program by up to 13 to 20 additional weeks,dependingon the circumstances. Benefits under the Extended Benefit program are also jointly funded bythe federal and state governments
- What if I am a reimbursing employer, how will the payment of benefits be charged?
CARES Act. will reimburse the states 100% for the additional $600.00 in benefits paid above thetypical award for unemployment. At this point,federal funding will be provided togovernmental entities and non-profit organizations for an amount equal to half of the benefits(50% relief) paid to workers of these organizations from March 13 to December 31,2020.
UC Advantage,Inc. along with other stakeholders,are working specifically with California onthis issue in order to provide additional assistance to reimbursing status employers. If effortsare successful in California,additional states will be included. We will provide information asthis effort moves forward.