DOL Addresses CARES Act Unemployment Compensation Provisions

On April 4 and 5, 2020, the U.S. Department of Labor’s Employment and Training Administration (DOL ETA) issued two new Unemployment Compensation Program Letters that provide helpful guidance to employers and to individuals seeking unemployment compensation pursuant to the Federal Pandemic Unemployment Compensation (FPUC) and Pandemic Unemployment Assistance (PUA) programs.

Unemployment Compensation Program Letter (15-20) – Addressing FPUC

On April 4, 2020, the DOL ETA issued Unemployment Insurance Program Letter No. 15-20, which provides states with operating, financial and reporting instructions for the FPUC program. The FPUC provides certain individuals collecting unemployment with an extra $600 per week on a short term basis.

In order to for an individual to receive FPUC, the applicable state must have signed an agreement with the Department of Labor. Assuming this is the case, FPUC is payable to individuals who are otherwise entitled to receive regular unemployment compensation (UC)[1] and to individuals receiving PUA, Pandemic Emergency Unemployment Compensation (PEUC), Extended Benefits (EB), Short-Term Compensation (STC), Trade Readjustment Allowances (TRA), Disaster Unemployment Assistance (DUA) and payments under the Self-Employment Assistance Act (SEA) program.

States must notify a potentially eligible individual of his or her entitlement to FPUC. Individuals do not have to separately apply for FPUC.

If the individual is entitled to receive at least $1.00 of underlying benefits for the claimed week, the individual will receive the full $600 for the week.

FPUC is payable in a state for weeks of unemployment beginning after the date on which the state enters into an agreement with the Department of Labor. The last week that FPUC is payable is the week ending July 25, 2020 or on July 26, 2020 depending on when the state’s unemployment week ends.

States must issue payments of FPUC as soon as administratively feasible and may pay the additional $600 at the same time and in the same manner as regular unemployment compensation or may pay it separately, but on the same weekly basis as regular unemployment compensation.

Importantly, states may not charge employers for any FPUC benefits paid so as to impact the employer’s experience rating.

Unemployment Compensation Program Letter (16-20) – Addressing PUA

On April 5, 2020, the DOL ETA issued Unemployment Insurance Program Letter No. 16-20 to provide states with operating, financial and reporting instructions for the PUA program. The PUA program generally allows states that enter into an agreement with the Secretary of Labor to pay up to 39 weeks of benefits to individuals who are not eligible to receive or who have exhausted regular UC, EB and PEUC and who otherwise meet the CARES Act eligibility requirements. The PUA program extends benefits to certain individuals not eligible for regular UC under state law, such as those who are self-employed or who have limited recent work history.

In general, the PUA provides up to 39 weeks of benefits to qualifying individuals who are otherwise able to work and available to work within the meaning of applicable state unemployment compensation law, except that they are unemployed, partially employed, or unable or unavailable to work due to one of the following COVID-19 related reasons listed in the CARES Act:

  • 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 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 Section 2102(a)(3)(A)(ii)(I) of the CARES Act.

The letter includes examples and explanations of circumstances that fall under each of the above listed categories. Additionally, individuals must complete a self-certification as to their eligibility, either on-line or on paper, which includes a statement that they may be subject to criminal prosecution if they are found to have committed fraud.

The last week which for PUA may be paid is the week ending December 26, 2020 or December 27, 2020, depending on the applicable state’s unemployment week.

PUA is generally not payable to individuals who have the ability to telework with pay or who are receiving paid sick leave or other paid leave benefits. However, if an individual is teleworking with pay, but is working less than the individual customarily worked prior to the COVID-19 pandemic, or if an individual receives paid sick leave or other paid leave benefits for less than his or her customary work week, he or she may still be eligible for a reduced PUA weekly benefit amount.

Stay tuned to Stevens & Lee’s Alerts and Newsletters and COVID-19 Resource Center for further legal updates related to COVID-19. In the meantime, if you have any questions about the interpretation and implementation of the CARES Act as it relates to unemployment compensation or other COVID-19 related legal questions concerning labor and employment law, please contact Lisa M. Scidurlo, Daniel J. Sobol, Jennifer A. Ermilio or the Stevens & Lee attorney with whom you regularly work.

[1] This includes Unemployment Compensation for Federal Employees (9UCFE) and Unemployment Compensation for Ex-Service Members (UCX).

This News Alert has been prepared for informational purposes only and should not be construed as, and does not constitute, legal advice on any specific matter. For more information, please see the disclaimer.

Close