Updated Guidance on Emergency Unemployment Assistance Under the CARES Act

Posted by Attorney David McClurg in COVID-19 / Comments

The Department of Labor has just issued guidance relating to the Emergency Unemployment Benefits available under the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”). Under this Act, states will, through July 31, 20, provide an additional $600 weekly payment in Federal Pandemic Unemployment Compensation benefits (“FPUC”) to eligible individuals who are receiving “regular” unemployment compensation under existing state law, as well as those who will soon be receiving compensation under the new Pandemic Emergency Unemployment Compensation and Pandemic Unemployment Assistance Programs. (This additional payment will also go to individuals whose UI payments are being intercepted to pay debts.)

The Pandemic Emergency Unemployment Compensation (“PEUC”) section of the CARES Act provides that weekly payments will be made to individuals who:

(A) have exhausted all rights to regular compensation under State and Federal law, and remain unemployed for reasons not necessarily related to the pandemic; and

(B) are able to work, available to work, and actively seeking work. States are directed, however, to be flexible with the job search requirements based on the pandemic.

The “Weekly Benefit Amount” will be equal to the amount of the individual’s regular unemployment compensation (including any dependents' allowances) under state law; plus, the $600 in Federal Pandemic Unemployment Compensation (“FPUC”) benefits.

The PUEC provides for an additional 13 weeks of unemployment benefits for eligible individuals who have exhausted their regular unemployment benefits, thus extending those benefits in Wisconsin up to a maximum of 39 weeks. The extended benefits are available through December 31, 2020. Any of the additional 13 weeks of benefits received prior to July 31, 2020 should include the extra $600 weekly FPUC payment.

The Pandemic Unemployment Assistance (“PUA”) provides up to 39 weeks of benefits,  including the extra $600 weekly FPUC payments, to workers not traditionally eligible for unemployment benefits (self-employed, independent contractors, workers with limited work history, and others) who are unable to work as a direct result of the COVID-19 Coronavirus public health emergency. The weekly benefits for self-employed individuals is calculated based on a formula described in 20 C.F.R. § 625.6. These individuals will receive at least the minimum weekly benefit under state law.

The Wisconsin DWD indicates that the PUA will cover individuals:

• Diagnosed with COVID-19 or with COVD-19 symptoms, and seeking diagnosis;
• Otherwise not qualified for regular or extended UI benefits; and affected by COVID-19;
• With “sufficient work history” and affected by COVID-19;
• Seeking part-time employment, but affected by COVID-19;
• Who are self-employed/Independent Contractors/1099 filers/Farmers–and affected by COVID-19;
• Whose place of employment closed as a direct result of COVID-19;
• Who quit their job as a direct result of COVID-19;
• Who became the major breadwinner because head of house hold died fromCOVID-19;
• Who are scheduled to commence new employment and cannot reach work place as direct result of COVID-19;
• Who are unable to reach place of employment due to an imposed quarantine or because advised by medical provider to self-quarantine due to COVID-19;
• Who are the “primary caregiver” for a child unable to attend school or another facility closed due to COVID-19;
• Who are providing care for family or household member diagnosed with COVID-19; or
• Who are members of households including individuals who have been diagnosed with COVID-19.

Individuals receiving paid sick leave or other paid leave benefits (regardless of meeting a category listed above) and individuals that can telework with pay are not eligible to receive Pandemic Unemployment Assistance.

The DOL recently issued guidance emphasizing that individuals will only be eligible to receive the additional $600 Pandemic Unemployment Compensation payment for weeks in which the individual receive benefits (of $1 or more) under either their regular unemployment laws, the PEUC, PUA or other special federal unemployment assistance programs. Thus, employees who receive no benefits because their income (based on a reduced work schedule) exceeds the state’s “maximum weekly earnings,” may, even though they remain technically “eligible” for unemployment, forfeit not only their regular UI benefits but also the additional $600 FPUC payment. The "maximum weekly earnings" amount that cuts off an employee’s weekly benefits under Wisconsin law is not the same for every claimant. Each individual employee’s weekly benefit rate (WBR) determines what his/her “maximum weekly earnings” amount will be, based on the following formula:

Subtract $5.00 from your weekly benefit rate

Divide the remainder by .67 (67%)

Add $30.00

The enhanced FPUC benefit payments are fully federally-funded, and will be available for distribution to eligible Wisconsinites as soon as appropriate modifications can be made to the DWD’s computer programs. When payments begin, eligible individuals will receive retroactive payments back to their date of eligibility. These emergency unemployment benefits, like all unemployment benefits are taxable, but will be disregarded for purposes of determining income for Medicaid or Children's Health Insurance Program (“CHIP”) eligibility. The CARES Act specifies that the $600 FPUC benefit payments will end with payments for the last week of unemployment before July 31, 2020.