Expanded Unemployment Benefits with the CARES Act

Expanded Unemployment Benefits with the CARES Act

By Kelsey O’Sullivan

Unfortunately, the COVID-19 crisis has created many issues and unusual circumstances for business owners and employees across the country. The need to acknowledge these circumstances is being addressed by the government in the form of the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”). Part of the CARES Act includes expanding unemployment benefits. This is an overview of how these benefits are coming together to help those in need. 

Unemployment Benefits in Normal Circumstances

Unemployment Insurance (UI) is a joint state-federal program that provides cash benefits to eligible workers. Each state administers a separate UI program, but all states follow the same guidelines established by federal law. Before the CARES Act, the process of receiving unemployment was different. Back then (less than one month ago), to qualify, you must be unemployed through no fault of your own and meet your state’s work and wage requirements. Benefits are based on a percentage of an individual’s earnings over the most recent 52-week period – up to a state maximum amount. In general, benefits can be paid for a maximum of 26 weeks in most states. 

How The CARES Act Expands Unemployment Benefits

Among various forms of relief, the CARES Act aims to increase and expand unemployment insurance benefits available to workers, including individuals who are unemployed, partially unemployed, or unable to work due to COVID-19. These expanded benefits broaden who qualifies, increase monetary payment, and lengthen time of coverage. 

Who Qualifies for Benefits?

Part of the CARES Act includes the Pandemic Unemployment Assistance (PUA). PUA expands unemployment benefits to cover certain workers who traditionally are not eligible for unemployment benefits under state law. The expanded list of those that can qualify for UI benefits includes individuals who are self-employed, independent contractors, have limited work history, or who have exhausted all rights to regular or extended unemployment benefits, among others. 

If you have been kept from work due to one of the following circumstances related to the pandemic, you may be eligible for unemployment in your state: 

  • If you have been diagnosed with or exposed to COVID-19 
  • If you must care for someone in your immediate family who is sick with COVID-19 
  • If you cannot reach your place of work because of a quarantine 
  • You are unable to work because you must care for a child because of a school closure 
  • You are working significantly reduced hours due to the COVID-19 pandemic. 

If you continue to receive a paycheck while you work remotely, you will most likely be ineligible to file for unemployment benefits. Additionally, some states are currently unable to provide unemployment to individuals who must stay home to care for children who are home due to school closures. 

Increases in Payment

The CARES Act also includes the Federal Pandemic Unemployment Compensation (FPUC). FPUC provides eligible individuals an additional $600 weekly payment. According to FPUC, individuals who are eligible for unemployment benefits will receive the extra $600 weekly benefit for all weeks of unemployment between April 5, 2020 and July 31, 2020. 

Length of Coverage

In addition to the above mentioned, the CARES Act includes the Pandemic Emergency Unemployment Compensation (PEUC). PEUC extends benefits for an additional 13 weeks after regular unemployment benefits have been exhausted. In total, an eligible individual may collect benefits for a maximum of 39 weeks between January 27, 2020 and December 31, 2020. 

In summary: 

  • Pandemic Unemployment Assistance (PUA): Expands who is eligible for unemployment benefits 
  • Federal Pandemic Unemployment Compensation (FPUC): Provides an additional $600 federal unemployment benefit. 
  • Pandemic Emergency Unemployment Compensation (PEUC): Extends unemployment benefits for an additional 13 weeks 

Please note that although the above measures have been enacted by many state and local governments, the exact availability and rules of unemployment assistance will be dependent on the state in which you live. 

Please click here to find unemployment information relevant to your state. 

Sources (Department of Labor, Equifax, Proskauer, The National Law Review