Synthesized summary guidance on federal unemployment assistance for the COVID-19 pandemic
When Congress enacted the Coronavirus Aid, Relief, and Economic Security (CARES) Act, it provided for emergency assistance to individuals who lost work because of the COVID-19 pandemic. Congress allocated money to the states for temporary coverage of individuals who had exhausted their entitlement to regular unemployment compensation benefits and for individuals who were not otherwise eligible for regular unemployment benefits, like gig workers, independent contractors and individuals with limited recent work histories. Congress also provided that individuals collecting certain unemployment benefits would receive an additional $600 in federal benefits per week for weeks of unemployment ending on or before July 31, 2020.
Since these new federally funded benefits would be administered by the states through their respective unemployment offices, the U.S. Department of Labor (DOL) issued several memoranda, Unemployment Insurance Program letters (14-20, 15-20 and 16-20), offering further explanations of the programs and guidance as an aid to their administration. Certainly very informational, the DOL cites specifically to sections of the CARES Act and identifies the various programs by their initials, which can be confusing when the acronyms are quite similar (e.g., PUA, FPUC, etc.). News reporting has complicated this understanding because it often simply describes the available benefits without differentiating between the programs. However, the DOL gifted the public with a chart attached to the following memorandum, which summarizes the unemployment insurance provisions in Title II, Subtitle A of the CARES Act.
Hoping to make further sense of the available benefits by program, we liberally quote below from the DOL’s memoranda and chart.
PUA: Pandemic Unemployment Assistance
The Pandemic Unemployment Assistance (PUA) program is described in section 2102 of the CARES Act. It provides up to 39 weeks of benefits and is available starting with weeks of unemployment beginning on or after Jan. 27, 2020, and ending on or before Dec. 31, 2020.
This program will cover individuals who are self-employed, seeking part-time employment and who otherwise would not qualify for regular unemployment benefits under existing state or federal laws, or the Pandemic Emergency Unemployment Compensation (PEUC) program under section 2107 of the CARES Act. The PUA program also provides coverage for individuals who have exhausted their rights to regular unemployment benefits under existing state or federal laws or PEUC.
To be eligible for PUA benefits, individuals must demonstrate that they are otherwise able and available to work, but they are unemployed, partially employed, or unable or unavailable to work because of the following COVID-19 related reasons, outlined in Section 2102(a)(3)(A)(ii)(I):
- The individual has been diagnosed with COVID-19 or is experiencing symptoms of COVID-19 and is 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 a member of the individual’s household who has been diagnosed with COVID-19.
- A child or other person in the household, for which the individual has primary caregiving responsibility, is unable to attend school or another facility that is closed as a direct result of the COVID-19 public health emergency and such school or facility care is required for the individual to work.
- The individual is unable to reach the place of employment because of a quarantine imposed as a direct result of the COVID-19 public health emergency.
- The individual is unable to reach the place of employment because the individual has been advised by a healthcare provider to self-quarantine due to concerns related to COVID-19.
- 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 the COVID-19 public health emergency.
- The individual became the breadwinner or a major financial support for a household because the head of the household has died as a direct result of COVID-19.
- The individual quit their job as a direct result of COVID-19.
- The individual’s place of employment closed as a direct result of the COVID-19 public health emergency.
FPUC: Federal Pandemic Unemployment Compensation
The Federal Pandemic Unemployment Compensation (FPUC) program is detailed in section 2104 of the CARES Act. It provides an additional $600 per week to individuals who are collecting regular unemployment compensation benefits and other federal benefits, including PUA. It is only available for weeks of unemployment beginning after the date the state enters into an agreement with the DOL and ends with weeks of unemployment ending on or after July 31, 2020.
PEUC: Pandemic Emergency Unemployment Compensation
The Pandemic Emergency Unemployment Compensation (PEUC) program is outlined in section 2107 of the CARES Act. This program provides up to 13 weeks of benefits and is available for weeks of unemployment beginning after the date on which the state enters into an agreement with the DOL and ending with weeks of unemployment on or before Dec. 31, 2020. The PEUC program covers individuals who have exhausted all rights to regular unemployment compensation benefits under existing state or federal laws, have no rights to regular unemployment under any other state or federal law and are able to work, available for work and are actively seeking work. States are directed to offer flexibility to individuals who may be unable to search for work because of COVID-19, including because of illness, quarantine or movement restrictions.
Short-time compensation (STC) program
Many states offer short-term compensation programs (also known as shared work or work share programs), which allow employers to avoid layoffs by temporarily reducing the hours of their workers while permitting the affected workers to receive partial unemployment benefits. In Dec. 2014, Gov. Pat Quinn signed the Illinois Shared Work Benefits bill that provided a short-term compensation program for Illinois. Unfortunately, under the next administration, the Illinois Department of Employment Security did not issue necessary rules for the program. Therefore, although Illinois has a short-term compensation program, it is not currently in effect.
Section 2108 of the CARES Act provides 100% reimbursement to states with existing short-time compensation programs for up to a maximum of 26 weeks per individual. The reimbursements are available starting with weeks of unemployment beginning March 27, 2020, and ends with weeks of unemployment ending on or before Dec. 31, 2020.
Under Section 2109 of the CARES Act, states without an existing short-term compensation program, which may include Illinois, may offer short-term compensation benefits after entering into an agreement with the DOL. Once they have an agreement in place, the states will be reimbursed for up to one-half of the benefit costs, up to a maximum of 26 weeks per individual. This program is available for weeks of unemployment beginning or after the date on which the state enters into the agreement with the DOL and ends with weeks of employment ending on or before Dec. 31, 2020.
Temporary federal funding to eliminate the waiting period
Section 2105 of the CARES Act provides temporary full federal funding to states for the compensation of indivduals’ first week of regular unemployment if there is no waiting period. (Many states, including Illinois, mandate a waiting period of one week.) For states that do not require a waiting period and that enter into an agreement with the DOL, they will receive 100% federal funding for the total amount of regular unemployment benefits paid to individuals for their first week of regular unemployment. This funding is available for weeks of unemployment beginning after the date on which the state enters into an agreement with the DOL and ends with weeks of unemployment ending on or before Dec. 31, 2020.
Do not just quit your job to apply for these benefits
The DOL has advised the states to be watchful for fraudulent claims. A person should not quit or seek benefits unless they are eligible. Individuals falsely seeking benefits may be subject to repayment and can be disqualified from receiving other benefits for a period of time.
In this difficult time, the economic effects of COVID-19 are causing unprecedented demand on the states’ unemployment systems. Millions of people have submitted or have tried to submit claims for benefits due to loss of work as a result of the pandemic.
How the benefits coordinate
If an individual is eligible for regular unemployment compensation benefits, they should first apply for and receive regular benefits. When the individual exhausts their regular unemployment benefits, they may be eligible to receive an additional 13 weeks of PEUC benefits under Section 2107. The individual may be eligible to receive even more benefits from a state extended benefit program. If the individual has exhausted all these benefits, they may be eligible to receive PUA under section 2104 but they have to satisfy one of the COVID-19 related reasons. The duration of these benefits is limited to 39 weeks, minus the weeks the individual already has received benefits. The weeks that the individual collected PEUC will not be deducted from their PUA entitlement.
If an individual is not eligible for regular unemployment benefits or PEUC, but meets one of the COVID-19 reasons, the individual may collect PUA under section 2102. The duration of the benefits is limited to 39 weeks.
The Federal Pandemic Unemployment Compensation (FPUC) program under section 2104 provides for an additional $600 per week to an individual collecting regular unemployment benefits and PEUC and PUA as well as other benefits under other programs. Individuals receive FPUC payments concurrently with payments under the other programs. FPUC applies to all weeks of unemployment ending on or before July 31, 2020.
For more information, contact one of Chuhak & Tecson’s Employment law attorneys.
Client alert prepared by Jeralyn H. Baran (312 855 4613), Principal and Employment practice group leader.
This Chuhak & Tecson, P.C. communication is intended only to provide information regarding developments in the law and information of general interest. It is not intended to constitute advice regarding legal problems and should not be relied upon as such.