The CARES Act Greatly Expands Unemployment Benefits - Client Alert
On March 27, 2020, Congress passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act which expands eligibility for unemployment benefits, increases the amount of unemployment benefits individuals can receive, and extends the duration of unemployment benefits.
In particular, the CARES Act allows:
- Eligible workers to collect unemployment benefits for up to 39 weeks;
- Eligible workers to receive an additional $600 (above and beyond what is currently available) in unemployment benefits per week for up to four (4) months; and
- Eligible workers who have exhausted or will exhaust their unemployment benefits to collect additional benefits.
Under the Act, the enhanced benefits are available for the period beginning on January 27, 2020 and ending on December 31, 2020. In addition, the Act provides funding for states to waive any waiting periods for receiving unemployment benefits.
The CARES Act makes more workers eligible for unemployment benefits. An individual will be eligible for benefits under the Act if:
- The individual has been diagnosed with COVID-19 or is experiencing symptoms and seeking a medical diagnosis;
- A member of the individual’s household has been diagnosed with COVID-19;
- The individual is providing care for a family member or household member who has been diagnosed with COVID-19;
- The individual is the primary caregiver for a child or other person in the household who is unable to attend school or another facility as a direct result of COVID-19;
- The individual is unable to reach the place of employment because of a quarantine imposed as a direct result of COVID-19;
- The individual is unable to work because a health care provider has advised the individual to self-quarantine due to COVID-19 concerns;
- 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 COVID-19;
- The individual has become the breadwinner or major support for a household because the head of household has died as a direct result of COVID-19;
- The individual has to quit their job as a direct result of COVID-19; or
- The individual’s place of employment is closed as a direct result of COVID-19.
The U.S. Secretary of Labor may also establish additional eligibility criteria.
It should be noted that individuals are not eligible for benefits if they have the ability to telework with pay or are receiving paid sick leave or other paid leave benefits.
The CARES Act also expands unemployment to cover those who traditionally are not eligible to receive such benefits, including:
- Individuals who are self-employed (i.e., independent contractors);
- Individuals seeking part-time employment;
- Individuals who do not have sufficient work history, or otherwise would not qualify for regular unemployment or extended benefits if they meet a qualifying reason above.
In addition, the Act relaxes the “actively seeking work requirement” where the individual is unable to search for work due to COVID-19.
Finally, employers should note that the CARES Act does not include any provisions concerning the manner in which states calculate an employer’s unemployment tax rate. As a result, an increase in unemployment claims by former employees could result in a future increase to the employer’s unemployment tax rate.