As discussed in our previous alert, on March 27, 2020, President Trump signed into law the CARES Act (the “Act”). Section 2102 of the Act creates a temporary federal program called Pandemic Unemployment Assistance (PUA) that provides states with funding for up to 39 weeks of unemployment benefits for individuals. To address questions and concerns surrounding the administration of PUA benefits, the United States Department of Labor issued Unemployment Insurance Program Letter (UIPL) No. 16-20. The letter focuses on state administrative responsibilities and worker eligibility for PUA benefits, and serves as a useful overview of the program and how it will impact employers and workers.
UIPL No. 16-20 notes that despite the fact that PUA is administered by states, it is a federally-funded program, with a statutorily defined time limit. PUA is available retroactively starting with weeks of unemployment beginning on or after January 27, 2020, and ending on or before December 31, 2020. States are required to ensure public knowledge of PUA availability through state-wide news media coverage. However, states are not required to notify individuals about program availability.
Claims and Eligibility
The PUA program is an emergency program for individuals who are ineligible for, or who have exhausted their entitlement to, regular unemployment compensation. While an individual must self-certify that he or she is unemployed, partially unemployed, or unable or unavailable to work because of a COVID-19 related reason – under PUA these individuals do not have to provide proof of employment or self-employment, nor does PUA take into account the individual’s principal source of income. In addition, to partake in the PUA program, an individual must be ineligible for Pandemic Emergency Unemployment Compensation (PEUC) under section 2107 of the CARES Act. The PEUC provides individuals with 13 weeks of emergency unemployment insurance if they remain unemployed after they have exhausted their benefits or are not otherwise eligible for benefits.
In most instances, PUA is not payable to an individual who has the ability to telework with pay. However, if domestic violence, sexual violence, or stalking prevents an individual from teleworking, the individual may be qualified to receive PUA if he or she is unemployed, partially unemployed, or unable or unavailable because of COVID-19 related reasons listed in section 2102(a)(3)(A)(ii)(I) of the CARES Act, such as a stay-at-home order.
- Working in Multiple States
Individuals living in one state and but self-employed in another state must file for unemployment with the state where they were working when they became unemployed, partially unemployed, or unable or unavailable to work because of a COVID-19 related reason. If an individual worked in multiple states at this time, the individual may file in any of those states.
- Students and Volunteers
A full-time student who works part-time, and who is unemployed, partially unemployed, or unable or unavailable to work because of a COVID-19 related reason, is eligible for PUA. Peace Corps and AmeriCorps participants who are no longer volunteering because their volunteer sites are closed due to COVID-19, and who have suffered losses of income, are also eligible for PUA.
- Individuals Who Refuse to Return to Work
Individuals who refuse to return to work when called back by their employers because they want to receive unemployment benefits are not eligible for PUA. If a state’s stay-at-home order is lifted, an individual who refuses to return to work because of general concern about COVID-19, but who does not have a COVID-19 related reason (as listed in section 2102(a)(3)(A)(ii)(I) of the CARES Act), is not eligible for PUA. Individuals who refuse an offer of work are also ineligible.
Individuals on approved unpaid medical leave from their employer who are not eligible for state unemployment compensation because they are unable to work, may qualify for PUA if the individual is on leave for a COVID-19 related reason. An individual does not have to test positive for COVID-19 to qualify for a COVID-19 related reason. Any diagnosis from a qualified medical professional, including one made via phone, is sufficient.
- Calculating Benefit Entitlement
There is no minimum monetary requirement for an individual to be eligible for PUA. However, base period wages are considered when calculating the individual’s weekly benefit amount. The base period to be used is the most recent tax year, which is 2019.
The PUA weekly benefit amount will be the amount of compensation an individual would have been paid regularly under the state’s unemployment statue, using the state’s existing wage records and any additional supporting evidence provided by the individual. An individual will be provided the minimum PUA weekly benefit amount if the state does not have any existing wage records and he or she does not provide evidence to support a higher amount.
Employers looking to reduce work schedules in the wake of the COVID-19 crisis should consider whether their employees will qualify for partial unemployment under PUA in combination with other state assistance programs. Programs such as PUA provide employers with flexibility in managing their businesses, and limiting terminations of employment.
* * *
If you have any questions regarding this alert, please do not hesitate to contact us.