Unemployment Benefits in the Time of Covid-19

The United States has seen a staggering rise in claims for unemployment with nearly 3.3 million new jobless claims. With no clear end to the COVID-19 crisis in sight, Congress passed legislation and states have revised policies to ease the growing unemployment burden. This article provides an overview of the unemployment provisions of the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) and new measures taken by Missouri and Illinois to provide relief.

The CARES Act

The CARES Act provides for $260 billion to dramatically expand unemployment coverage for workers who are unable to work as a result of the pandemic.

In the event a worker becomes unemployed as a result of COVID-19, the worker will be eligible for Federal Pandemic Unemployment Compensation (FPUC) of $600 per week. This payment is in addition to any benefits a worker is entitled to under applicable state law. The supplemental payments will be provided through July 31, 2020.

The CARES Act also provides for 13 weeks of Pandemic Emergency Unemployment Compensation (PEUC), in addition to regular length of time a worker may receive regular state benefits. To receive these extended benefits, a worker must be actively searching for work, though the CARES Act requires states to provide flexibility in applying this requirement when COVID-19 restricts an individual’s ability to look for work.

Workers who usually do not qualify for unemployment benefits, including those who are self-employed, independent contractors and freelancers, among others, will be eligible for Pandemic Unemployment Assistance (PUA). PUA is also available to those who have already exhausted all rights to regular unemployment benefits (including the extended benefits described above). Certain criteria specific to the COVID-19 pandemic apply to individuals seeking PUA. For those who meet the criteria, PUA is available for weeks of unemployment, partial unemployment, or inability to work caused by COVID-19 for up to 39 weeks of the time period of January 27, 2020 through December 31, 2020.

Another portion of the CARES Act expands “work sharing” programs to provide partial benefits to workers with reduced hours. These programs allow employers to put workers on part-time status with partial unemployment benefits. Currently, the cost of these programs, intended to prevent layoffs, is borne by individual states. The CARES Act provides funding to states to promote and utilize these programs.

Missouri’s Response

The recently passed Families First Coronavirus Response Act (FFCRA) goes into effect April 1, 2020. The FFCRA provides states an initial influx of funding to handle the dramatic increase in unemployment benefit applications and allowed flexibility in modifying policies and procedures. Missouri Governor Mike Parson announced changes being made by the Missouri Department of Labor and Industrial Relations:

• Missouri is waiving the normal one-week waiting period for unemployment claims. The CARES Act provides federal funding to fully reimburse the state for this week of benefits and the expenses incurred in processing those payments.
• Missouri is relaxing the requirements that individuals must demonstrate attempts to find work.
• Missouri is also waiving charges for COVID-19 related claims on employers’ unemployment insurance accounts to avoid adversely affecting their payroll tax rate.

Illinois’ Response

Illinois adopted emergency rules to allow its unemployment insurance system to adapt to the pandemic.

• Illinois will expand the availability of benefits to those who are unable to work for reasons arising out of the pandemic, including self-isolation and caring for children whose schools are closed.
• An individual laid off temporarily because of COVID-19 will not have to register with the state employment service but will be considered to be actively looking for work if prepared to return to work when the employer is reopened.

If you have any questions, one of our employment attorneys can assist you.For additional COVID-19 related information, go to our Coronavirus/COVID-19 Resource Center.