On March 27, 2020, President Trump signed the Coronavirus Aid, Relief, and Economic Security Act (the “CARES” Act) into law, which was the second large stimulus recovery bill passed by Congress, which is intended to provide direct financial aid to companies and individuals affected by the COVID-19 public health emergency.
The text of the actual Act is LONG (880 pages, to be precise), and contains a lot of different provisions and forged a variety of new federally-funded programs and initiatives. In this article we will address some of the most important employee–focused topics: the creation of three new unemployment programs:(1) Pandemic Unemployment Compensation; (2) Pandemic Emergency Unemployment Compensation; and (3) Pandemic Unemployment Assistance.
You would think that the group of minds that came up with such a snappy title like the “Coronavirus Aid, Relief, and Economic Security Act,”—just so they could shorten it to “the CARES Act”—would have thought up names for these three new unemployment programs that were a little more. . . original. But, while the titles all sound the same and might lend themselves to confusion, these new programs serve three distinct—and important—purposes.
(1). Federal Pandemic Unemployment Compensation, or “FPUC” for short, gives claimants who receive state unemployment compensation an additional $600 in benefits per week. This is a flat amount available to anyone who receives unemployment, even those only receiving partial benefits. It also applies to any benefit weeks under the new Pandemic Emergency Unemployment Compensation and Pandemic Unemployment Assistance programs (more on those below). These additional benefits may be paid either with a claimant’s regular unemployment benefits, or at a different time. But either way, they must be paid on a weekly basis. FPUC benefits are not considered to be income for purposes of Medicaid or CHIP eligibility. FPUC benefits will apply for all unemployment claims existing at the time the law was passed, or those claims approved through July 31, 2020.
(2). Pandemic Emergency Unemployment Compensation, or “PEUC”, creates supplemental federal emergency unemployment benefits that tacks on an additional 12 weeks of unemployment compensation to the end of a claimant’s normal eligibility under state law (similar to the Emergency Unemployment Benefits Congress passed during the housing crisis a few years back). Pennsylvania, for example, caps its state unemployment benefits at 26 weeks. With PEUC, however, a Pennsylvania claimant may be eligible to receive up to 38 weeks of total unemployment benefits (26 weeks state unemployment plus 12 weeks of PEUC benefits). The only condition is that recipients must continue to actively look and apply for work that is appropriate when considering one’s experience and skill set (just like when receiving normal unemployment benefits), and keep a record of those search efforts. But the CARES Act also requires States to be flexible towards recipients who have trouble finding a job because they are sick with, quarantined by, or are subject to travel restrictions because of, COVID-19.
(3) Pandemic Unemployment Assistance, or “PUA” (show of hands: who’s tired of hearing the word “pandemic” yet?) creates a new federally-funded unemployment system specifically for individuals who find themselves outside a traditional state unemployment system. Some states (like Pennsylvania) only provide unemployment compensation for employees, not independent contractors. So, if you live in one of those states and work in the “gig-economy”—like an UBER or LYFT driver—and suddenly find yourself out of work, you normally may have no ability to receive state unemployment benefits. But the PUA changes that for self-employed workers, independent contractors, or other individuals who find themselves ineligible for traditional unemployment benefit programs. Specifically, PUA sets up a new system of federal unemployment compensation benefits specifically for these individuals that provides for up to 39 weeks of benefits, so long as the need for unemployment benefits is connected to the COVID-19 pandemic.
In order to participate in the PUA program, an individual:
(a). cannot be eligible to receive traditional, state-funded unemployment benefits (because he/she is not otherwise eligible, has exhausted all state-funded benefits, is self-employed, or doesn’t have sufficient work history); and
(b). is partially- or fully-unemployed or is unable and unavailable to work because one of the following:
(i). he/she has been diagnosed with COVID-19;
(ii). he/she is experiencing symptoms of COVID-19 and are seeking a medical diagnosis;
(iii). someone in his/her household has been diagnosed with COVID-19;
(iv). he/she is caring for a family member (or someone else in their household) who has been diagnosed with COVID-19;
(v). he/she has a child (or someone else in the household they are primarily responsible for) whose school or care facility is closed because of
the COVID-19 public health emergency and school or facility care is required for the applicant to work;
(vi). he/she cannot travel to his/her job because of a COVID-19 quarantine;
(vii). he/she cannot travel to his/her job because a health-care provider has recommended that he/she self-quarantine because of COVID-19 concerns;
(viii). he/she was scheduled to begin a job, but now either no longer has it or can’t reach it because of the COVID-19 public health emergency;
(ix). he/she has become the “breadwinner” (Congress’s word, not mine) or primary wage earner in the household because the previous head of the household has died because of COVID-19;
(x). he/she has been forced to quit his or her job as a direct result of COVID-19;
(xi). his/her employer closed (even temporarily) because of the COVID-19 public health emergency (although in Pennsylvania, this would likely qualify an applicant for traditional, state-funded benefits);
(xii). he/she meets any other criteria that the U.S. Department of Labor might establish at a later time (basically, in case Congress forgot something or some other unanticipated shoe drops).
PUA benefits will be available to anyone who fits these criteria between January 27, 2020 and December 31, 2020.
What weekly benefits does the PUA provide? Generally, the formula under the CARES Act is: (a) the amount of weekly unemployment benefits the applicant might have been eligible for under the state unemployment system where he/she lives plus (b) $600 in FPUC benefits (described above). So basically, if you are eligible for benefits under the PUA program, you can receive the same amount as someone who proceeds under the traditional state-funded unemployment system, up to a maximum of 39 weeks (which is actually 1 week longer than a traditional-unemployment plus PEUC recipient in Pennsylvania might get).
Last week, more than three million Americans filed unemployment benefit claims (a statistic that will probably be outdated by the time this article gets posted). That’s a staggering number. But with passage of the CARES Act, Congress has provided the tools and—more importantly—the money that will prevent state unemployment programs from getting crushed by this onslaught and enable them to weather the current storm.
So if you’re an employer who has been forced to lay off (or is considering laying off) workers, or if you now find yourself without a job or unable to find work, and you want to know more about unemployment rights under the CARES Act, reach out to us. As I’ve said before: we may be working remotely, but we’re still here.
MICHAEL J. DAVEY, ESQUIRE
Employment Law Department
Eckell Sparks Law Firm