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The CARES Act Series: Title II, Part A - Unemployment Benefits

Posted by Rachael J. Leah | May 05, 2020 | 0 Comments

This post is part of the CARES Act Blog Series that I have put together to guide small businesses and workers through the CARES Act and help them understand what it means for them. I will do my best to include everything that I think will be relevant to the readers, but keeping in mind that, if you wanted to read something that was hundreds of pages long you would be reading the 335-page CARES Act itself, not this blog post. Where possible, I will add links to the websites of federal and state government and agencies that are implementing the parts of the CARES Act that are in Title I. 

Please note: The CARES Act is a lengthy and detailed document. It also very new and may be modified by the US Congress later on. In fact, the US Congress has already passed a new law that would modify the terms of the CARES Act or make other changes that would indirectly impact the CARES Act. Because of this, please keep in mind that this CARES Act Series is intended as a general guide only and not as legal advice or assurances. Please consult the agency responsible for carrying out the programs or contact a licensed attorney or other professional who can help you given your particular circumstances. 

Title II of the CARES Act creates and expands programs in order to provide much-needed assistance to workers, individuals, and businesses. Here are some of the programs that seem to be the most immediately relevant and in high demand:

1. Changes to Unemployment Benefits

1.a. Pandemic Unemployment Assistance

1.b. Pandemic Emergency Unemployment Compensation

2. New Tax Laws for Individuals (discussed here)

2.a. Recovery Rebates

2.b. Waiver of Minimum Distribution Rules for Retirement Plans & Accounts

2.c. Charitable Contributions - Deductions and Changes in Donation Limits

3. New Tax Laws for Businesses:

3.a. Employee-Retention Tax Credits

3.b. Delayed Payment of Payroll Taxes

The unemployment programs are administered by the U.S. Department of Labor and the Department of Labor at the state-level. The tax programs are administered by the Internal Revenue Service (IRS)

Changes to Unemployment Benefits 

The unemployment assistance and benefits portion of the CARES Act creates a new law: "Relief for Workers Affected by Coronavirus Act." Among other things, the new law includes the following:

1.a. Pandemic Unemployment Assistance

"Covered individuals" are entitled to "Pandemic Unemployment Assistance" (PUA) to compensate them for loss of employment income due to the COVID-19 Pandemic. 

To be eligible for PUA benefits or assistance, the worker must meet two broad requirements:

** Requirement 1: The worker generally must not be eligible for other types of unemployment assistance. The CARES Act identifies a couple types or sources of unemployment assistance that the worker may not be eligible for if they would like to seek Pandemic Unemployment Assistance. 

Here are some of the types of benefits or compensation that may disqualify you from PUA:

  • Pandemic Emergency Unemployment Compensation (PEUC, discussed below)
  • Other types of unemployment compensation, regular compensation, or other extended benefits under Federal or State law. This may include regular unemployment benefits, Disaster Unemployment Assistance, or other benefits. 
  • If you exhausted your right to those types of benefits or compensation (e.g., the time for you to receive those benefits has expired or run out), then you may not be eligible for PUA. 

In addition, if the following apply to you, then you may not qualify for PUA:

  • You have the ability to telework with pay
  • You are receiving paid sick leave or other paid leave benefits (regardless of whether your situation meets "Requirement 2")

** Requirement 2: The worker must meet "Requirement 1" and must certify that the following applies to him or her:

Option A - The worker is ready and able to work but cannot do so or is unemployed for at least one of the following reasons:

    • The worker either has or is likely to have COVID-19. If the worker likely has COVID-19, they are required to show that they are seeking a medical diagnosis. 
    • Someone in the worker's household has COVID-19. 
    • The worker is providing care for a family member or a household member who has COVID-19. Note that, if the worker is caring for a family member who has COVID-19, the worker meets this requirement regardless of whether the family member and the worker live together. 
    • The worker cannot go to work because the worker is the primary caregiver for a child or other household member that is no longer able to attend school or receive daycare due to COVID-19. Here, schools or daycare facilities being closed isn't enough to meet this requirement. The school or daycare being closed needs to directly impact the worker's ability to go to work. 
    • The worker cannot "reach the place of employment" because of a quarantine order that directly stems from the public health emergency. In other words, this may generally mean that the person is unable to get to work due to a quarantine order in the area. 
    • The worker cannot go to work because a medical professional has advised them to self-quarantine due to concerns related to COVID-19. An example that may fall under this category is someone who is considered high-risk (due to age or underlying health conditions) being strongly advised by a doctor to stay home. 
    • The worker was scheduled to start a job, but does not have a job or cannot go to work because of COVID-19. 
    • The worker has become the breadwinner or major support for a household because the head of the household died as a direct result of COVID-19.
    • The worker had to quit their job because of COVID-19. 
    • The worker's place of employment closed because of COVID-19. 
    • The worker meets other criteria set by the Secretary of Labor for the worker to be eligible for PUA. 

Option B - The individual meets the Option A requirements and the following applies:

    • The individual is self-employed
    • The individual is seeking part-time employment
    • The individual does not have sufficient work history
    • The individual would not qualify for regular Federal or State unemployment or extended benefits or pandemic emergency unemployment compensation (discussed below) 

** Please Note: The PUA section uses the word "eligible" when it talks about other types of employment assistance. This means that, even if you have not applied for or are receiving the other types of unemployment benefits mentioned, you may not be eligible for PUA. In general terms, this means that being eligible for another type of unemployment assistance may mean that you are ineligible for PUA. PUA is still something that you may want to look into, but keep in mind that, if you are eligible for other types of assistance, there is a chance that you will not be able to get the benefits under PUA. 

1.b. Pandemic Emergency Unemployment Compensation (PEUC)

PEUC is a new program created by the CARES Act. The PEUC gives States the option to enter into an agreement with the Federal government to provide pandemic emergency unemployment compensation to individuals. If the individual lives or works in a State that has agreed to provide PEUC, the individual must meet all of the following criteria in order to be eligible for benefits:

    • The individual has exhausted all rights to regular Federal or State compensation for the given benefit year (excluding benefit years that ended before July 1, 2019)
    • The individual has no rights to regular or unemployment compensation for a week under State or Federal law
    • The individual is not receiving compensation for the week under Canadian unemployment compensation law
    • The individual is able to work, available to work, and actively seeking work. 

Please note here that the Pandemic Emergency Unemployment Compensation program is something that individual States can, but do not have to, sign up for. If they do sign up for it, they may qualify for additional funding to provide unemployment compensation to applicants. That said, it is entirely up to the individual State. Make sure you check your state's local unemployment office to see what unemployment compensation benefits are available, or contact a professional who can help you navigate the unemployment benefits process and options. 

Please note: The CARES Act is a lengthy and detailed document. It also very new and may be modified by the US Congress later on. In fact, the US Congress has already passed a new law that would modify the terms of the CARES Act or make other changes that would indirectly impact the CARES Act. Because of this, please keep in mind that this CARES Act Series is intended as a general guide only and not as legal advice or assurances. Please consult the agency responsible for carrying out the programs or contact a licensed attorney or other professional who can help you given your particular circumstances. 

About the Author

Rachael J. Leah

WHAT THE PRACTICE OF LAW MEANS TO ME What motivates and guides me in the client-centered practice of law is my curiosity, compassion, and critical thinking. I thrive in situations where I systematically identify, research, and strive to solve client issues. By keeping the human element in the practice of law, I am mindful of where you - the client - are, and am always aware that what I do impacts your life. My job as a lawyer is not merely academic; it is to assist clients to achieve their individual goals and have a positive impact on their lives.

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