April 6, 2020

Unemployment Benefit Provision Under the CARES Act

The Act (1) increases weekly benefits by providing an additional $600 on top of regular state law benefits (“Federal Pandemic Unemployment Compensation”), (2) extends the period for which unemployment benefits are available and (3) provides benefits to individuals that would otherwise be ineligible to receive unemployment benefits (e.g. the self-employed).

Increased Compensation Benefits – Federal Pandemic Unemployment Compensation

Section 2104 provides that a state, in agreement with the Secretary of Labor, shall make payments of unemployment compensation to individuals as if state law had been modified to include:

  • Regular weekly benefit determined under state law
  • “Federal Pandemic Unemployment Compensation” under CARES Act Section 2104 ($600)

Maximum benefit entitlement is determined based upon individuals “benefit year” under state and federal law. The additional compensation is only available through July 31, 2020.

Extending Benefits – Pandemic Emergency Unemployment Compensation

Section 2107 provides that a state, in agreement with the Secretary of Labor, shall make payments of “Pandemic Emergency Unemployment Compensation” to individuals who:

  • have exhausted all rights to regular unemployment compensation under state or federal law with respect to a “benefit year” ending after July 1, 2020;
  • have no rights to regular compensation for a benefit week under state or federal law;
  • are not receiving benefits with respect to any benefit week under the unemployment laws of Canada; and
  • are able to work, available and actively seeking work.

Benefits are deemed exhausted if an individual’s rights are terminated because the individual has received all available benefits in his “base period” under state law or the individual’s “benefit year” has expired under state law.

Weekly Benefit Amount:

  • Regular weekly benefit determined under state law
  • Federal Pandemic Unemployment Compensation ($600)

Benefit will expire December 31, 2020.

Coverage for Excluded Individuals- Pandemic Unemployment Assistance

A “covered individual” under Section 2102 of the CARES Act is an individual who is not eligible for regular unemployment benefits under state or federal law, including an individual who has exhausted those benefits and who has exhausted other extended benefits under Section 2107 (discussed above), and including self-employed and gig workers or workers with limited employment history. A covered individual is also an individual that certifies that (1) the individual is otherwise able to work but (2) has been affected by COVID 19 (diagnosed, symptoms, family, child-care, shelter in place order) OR (3) is self-employed and also COVID 19 affected under (2), above.

Duration of Benefits

A covered individual is entitled to benefits:

  • for weeks from January 27, 2020 to December 31, 2020;
  • for up to 39 weeks; and
  • while unemployed.
Amount of Weekly Benefits

A covered individual is entitled to a weekly benefit equal to:

  • Regular weekly benefit determined under state law
  • “Federal Pandemic Unemployment Compensation” under CARES Act Section 2104 ($600)

Benefit will expire December 31, 2020.

Conclusion

The above three major components of the unemployment provisions of the CARES Act can be summarized as follows. Regular benefits are extended to 39 weeks ending December 31, 2020 and increased in amount by $600 ending July 31, 2020 through state agreement with federal government. An additional period of coverage can be provided to those that have exhausted state benefits until December 31, 2020. Finally, benefits equal in amount can be provided to individuals otherwise ineligible such as the self-employed, those without sufficient work history and those that have completely exhausted all other benefits, ending December 31, 2020.

For more support and information relating to COVID-19, please visit the Kerr Russell COVID-19 Resource Center. If you have questions relating to employment or benefit matters, please contact a Kerr Russell attorney.

Liam K. HealyLiam K. Healy of Kerr Russell practice clients maintain compliance with state and federal tax laws that govern individuals and businesses focuses his practice on helping clients maintain compliance with the myriad of state and federal tax laws and regulations that govern individuals and businesses. A particular focus of Liam’s practice is in the area of employee benefits and ERISA. Liam specializes in designing pension and executive compensation plans to benefit business owners and executives. His practice includes drafting and reviewing deferred compensation agreements, severance agreements and non-compete agreements, representing employers in multi-employer plan collection and withdrawal liability matters.

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