CARES Act – Relief for Workers Affected by Coronavirus Act

The House passed the Senate’s CARES Act today. The Relief for Workers Affected by Coronavirus Act is within the CARES Act and includes important unemployment insurance provisions: 

PANDEMIC UNEMPLOYMENT ASSISTANCE ELIGIBILITY

The law expands the scope of individuals who are eligible for unemployment benefits, including those who are furloughed or out of work as a direct result of COVID-19, self-employed or gig workers, and those who have exhausted existing state and federal unemployment benefit provisions.

• The only individuals expressly excluded from coverage are those who have the ability to work remotely with pay and those who are receiving paid sick leave or other paid benefits.
• Duration of unemployment assistance is no greater than 39 weeks, unless the duration of benefits is extended after enactment of the law.
• Amount given out is equal to the state rate, but must not be less than 50% of the average compensation in that state.

EMERGENCY UNEMPLOYMENT RELIEF FOR GOVERNMENTAL ENTITIES AND NONPROFIT ORGANIZATIONS IMPLEMENTATION

• The benefits are administered by each state and upon the state’s written agreement with the Secretary of Labor to provide the specific benefits.  States that enter into such an agreement with the Secretary of Labor will be reimbursed in whole or in part for the cost of the benefits plus administrative expenses.

EMERGENCY INCREASE IN UNEMPLOYMENT COMPENSATION BENEFITS PROVIDED AND TIME PERIODS OF EXPANDED BENEFITS

• The law provides an increase of $600 per week in the amounts available for unemployment under state law.  This increase applies for unemployment payments made from law’s enactment through July 31, 2020 (approximately four months).
• States can agree to waive the waiting period for receipt of benefits so that individuals do not experience gaps in income.
• States can agree to provide pandemic emergency unemployment compensation to individuals who have either exhausted all of the benefits available to them under existing state and federal law or who are not otherwise eligible for benefits under existing state and federal law.  Individuals must be able and available to work and actively seeking work, unless they are unable to do so as a result of COVID-19 illness, quarantine, or movement restriction.
• The federal government will temporarily fund short-time compensation under existing state plans.  States that do not yet have short-time compensation plans in place may agree to implement a plan, provided that employers who enter into short-time compensation plans must be required to pay to the state half of the short-time compensation paid under the plan.
• The law provides unemployment benefit assistance to covered individuals who are not otherwise entitled to benefits under existing state or federal law for weeks of unemployment, partial unemployment, or inability to work caused by COVID-19 during the period January 27, 2020 through December 31, 2020.  This includes any waiting periods for benefits under applicable state law.
• The $600 weekly benefit increase will be applicable to weekly payments made through the end of July 2020.
• The additional unemployment compensation provided is not considered income for purposes of Medicaid and CHIP.
• A recovery benefit in the amount of $1,200 shall be payable to a qualified Railroad employee with respect to any registration period in which the employee received unemployment benefits and in any registration period in which the employee did not receive unemployment benefits due to limitations or due to reaching the maximum number of days of benefits in the benefit year beginning July 1, 2019.
• Emergency state staffing flexibility makes it easier to temporarily hire staff if needed to deal with the corona virus outbreak