A record 6,648,000 Americans filed for unemployment benefits for the week ending March 28, 2020, which marked an increase of 3,341,000 filings from the previous week’s level.[1] The Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) provides approximately $260 billion in enhanced and expanded unemployment insurance. The CARES Act also amends paid leave and paid sick leave provisions.
Expanded Unemployment Benefits [Title II, Subtitle A of the CARES Act]
The CARES Act includes expanded rights to unemployment compensation for individuals who are unemployed due to various reasons related to COVID-19, entitled “Relief for Workers Affected by Coronavirus Act.” This subtitle creates three new unemployment insurance programs: (1) Pandemic Unemployment Assistance, (2) Pandemic Unemployment Compensation, and (3) Pandemic Emergency Unemployment Compensation.
1. Pandemic Unemployment Assistance [Section 2102 of the CARES Act]
Pandemic Unemployment Assistance (“PUA”) provides emergency unemployment assistance to workers who are not eligible for regular state or federal unemployment benefits or PEUC (see below) or who have exhausted all rights to regular state or federal unemployment benefits or PEUC (see below). This program provides up to 39 weeks of assistance to workers who are immediately eligible to receive PUA. The amount of assistance provided is the weekly benefit amount dictated by the state where the individual was employed (in New York, up to $504/week) plus $600/week (federal) (amount dictated by the Federal Pandemic Unemployment Compensation).
Eligible individuals include:
Self-employed workers
Independent contractors
Freelancers
Workers seeking part-time work
Workers who do not have a long-enough work history to qualify for state unemployment insurance
Workers are not eligible for PUA if they can telework with pay or are receiving paid sick days or paid leave.
In order to receive PUA, applicants must provide a self-certification that they are:
-able to work and available for work, except the individual is unemployed, partially unemployed, or unable or unavailable to work because—
the individual has been diagnosed with COVID–19 or is experiencing symptoms of COVID–19 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 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 health care 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 has become the breadwinner or major support for a household because the head of the household has died as a direct result of COVID–19;
the individual has to quit his or her job as a direct result of COVID–19;
the individual's place of employment is closed as a direct result of the COVID–19 public health emergency; or
the individual meets any additional criteria established by the Secretary for unemployment assistance under this section; or
-Self-employed, seeking part-time employment, does not have sufficient work history, or otherwise would not qualify for regular state or federal unemployment benefits or PEUC (see below) and meets the requirements above.
The PUA program will expire on December 31, 2020, unless otherwise extended. PUA benefits can be paid retroactively for periods of unemployment beginning on or after January 27, 2020. In New York, a PUA application can be submitted online at labor.ny.gov. However, an applicant cannot apply for PUA until he/she has been determined ineligible for regular state unemployment insurance benefits.
2. Federal Pandemic Unemployment Compensation [Section 2104 of the CARES Act]
For individuals that qualify for regular unemployment compensation, they are entitled to receive Federal Pandemic Unemployment Compensation (“FPUC”), which provides an additional $600 to amounts that would otherwise be paid by the state. Individuals in New York will be eligible to receive up to $504/week in state benefits plus $600 in federal benefits.
FPUC is available once the United States Department of Labor and the state enter into an agreement concerning funding and payment and shall end on or before July 31, 2020.
3. Pandemic Emergency Unemployment Compensation [Section 2107 of the CARES Act]
Pandemic Emergency Unemployment Compensation (“PEUC”) provides up to an additional 13 weeks of state unemployment insurance benefits after he/she has exhausted all of his/her regular state unemployment insurance benefits. In order to receive PEUC, the applicant must have exhausted all rights to state and federal unemployment compensation with respect to the benefit year beginning on or after July 1, 2019. In addition, the applicant must be actively engaged in searching for work. However, the CARES Act explicitly provides that “a State shall provide flexibility in meeting such [work search] requirements in case of individuals unable to search for work because of COVID-19, including because of illness, quarantine, or movement restriction.” The amount to be paid is the amount of regular compensation (up to $504/week in New York) plus $600/week (federal).
All three programs are fully federally funded. States will also receive additional administrative funds to operate these programs. However, there is a “non-reduction rule” in the CARES Act, which means that as long as the states are participating in these programs, they may not do anything to decrease the maximum number of weeks of unemployment insurance benefits or the weekly benefits available under state law as of January 1, 2020. Any worker receiving PUA, FPUC, or PEUC will be entitled to receive any increase in the weekly benefit that occurs after the enactment of the CARES Act. Finally, waiting periods are eliminated under the CARES Act, so more individuals will be eligible for benefits sooner to prevent gaps in pay.
Legislative Amendments
Several sections within the CARES Act amended portions of the Family and Medical Leave Act of 1993 (“FMLA”) (as added by the Emergency Family and Medical Leave Expansion Act). Such amendments include:
-Limitation on Paid Leave [Section 3601 of the CARES Act]
Under FMLA, employers could not pay more than $200/day and $10,000 in the aggregate for each employee for paid FMLA leave
The CARES Act struck this provision
The new provision states that employers are not required to pay employees more than the aforementioned monetary limit
-Paid Leave for Rehired Employees [Section 3605 of the CARES Act]
The CARES Act makes an employee who was laid off on March 1, 2020 or later, and subsequently rehired by the same employer, eligible for paid leave under FMLA, so long as the employee was employed by the employer for at least 30 of the last 60 calendar days prior to layoff
The CARES Act also amends the Families First Coronavirus Response Act as follows:
-Emergency Paid Sick Leave Act Limitation [Section 3602 of the CARES Act]
Added that employers are not required to pay more than either $511/day and $5,110 in the aggregate for each employee if the employee (1) is subject to a federal, state, or local quarantine or isolation order related to COVID-19, (2) has been medically advised to self-quarantine due to COVID-19, or (3) is experiencing COVID-19 related symptoms and is seeking a diagnosis
Employers also are not required to pay more than $200/day and $2,000 in the aggregate for each employee if the employee (1) is caring for an individual who is subject to a federal, state, or local quarantine or isolation order related to COVID-19, or who has been medically advised to self-quarantine due to COVID-19, (2) the employee is caring for a son or daughter due to the closure of the son’s/daughter’s school or place of care, or the child care provider of such son or daughter is unavailable, due to COVID–19 precautions, or (3) the employee is experiencing any other substantially similar condition specified by the Secretary of Health and Human Services in consultation with the Secretary of the Treasury and the Secretary of Labor
Finally, the CARES Act (1) grants the Department of Labor the authority to investigate and gather data to ensure compliance with the Emergency Paid Sick Leave Act; and (2) clarifies that employers cannot discriminate against employees who have taken emergency paid leave or filed a complaint under the Act or participated in a proceeding to enforce the Act.
The full text of the CARES Act can be found at https://www.congress.gov/bill/116th-congress/house-bill/748/text#toc-HB497FA84BE3B40479927BB8EC35E9886.
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[1] U.S. Dep’t of Labor, News Release, Unemployment Insurance Weekly Claims (Mar. 26, 2020), available at https://www.dol.gov/ui/data.pdf.
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