COVID-19: Expanded Unemployment Insurance Eligibility and Benefits Available Pursuant to the Coronavirus Aid, Relief, and Economic Security Act (CARES Act)

In response to the COVID-19 emergency, the federal government has passed the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) which includes provisions that significantly expand eligibility for unemployment benefits and increase available unemployment compensation. These changes are in addition to the recent changes made to the unemployment insurance program in Massachusetts, as explained in Bello Welsh’s prior client alert, available here. The following is a summary of these provisions, found in the Relief for Workers Affected by Coronavirus Act (“RWACA,” Title II, Subtitle A of the CARES Act).

Relief for Individuals Not Otherwise Eligible for Unemployment Compensation

The RWACA makes “Pandemic Unemployment  Assistance” (PUA) available to covered individuals who are not otherwise eligible for regular unemployment compensation under state or federal law, including self-employed individuals, independent contractors, those with limited work history, and those who have exhausted all rights to regular unemployment compensation under state or federal law.  (This is separate from the “Pandemic Unemployment Compensation” provisions discussed in the next section.)

Such individuals must certify that they are otherwise able and available to work (within the meaning of state law), but are unemployed, partially unemployed, or unable or unavailable to work for a wide range of reasons related to COVID-19:

  • The individual was diagnosed with COVID-19 or is experiencing symptoms and seeking a medical diagnosis;
  • A member of the individual’s household was diagnosed with COVID-19;
  • The individual is providing care for a family member or household member diagnosed with COVID-19;
  • A child or other person for which the individual has primary caregiving responsibility is unable to attend school or a childcare facility which is closed for the COVID-19 emergency;
  • The individual is unable to reach the place of employment because of quarantine or because the individual has been advised by a healthcare provider to self-quarantine;
  • The individual was scheduled to commence employment and does not have a job or is unable to reach the job as a result of the COVID-19 emergency;
  • The individual has become the breadwinner or major support for the household because the head of household has died as a direct result of COVID-19;
  • The individual had to quit their job as a direct result of COVID-19;
  • The individual’s place of employment is closed as a direct result of COVID-19; or
  • The individual meets any additional criteria established by the Secretary of Labor.

Individuals with the ability to telework with pay, and individuals receiving paid leave benefits (including paid sick leave), however, are not eligible for PUA.

This expanded eligibility is available for up to 39 weeks of unemployment, partial unemployment, or inability to work caused by COVID-19, beginning on or after January 27, 2020 and ending on or before December 31, 2020, as long as the covered individual’s unemployment, partial unemployment, or inability to work caused by COVID-19 continues.

The weekly benefit amount for covered individuals is the weekly benefit amount authorized under the unemployment compensation law of the state where the covered individual was employed (except that the amount may not be less than the minimum weekly benefit amount described in 20 C.F.R. § 625.6[1]), in addition to $600 per week as provided for by the Federal Pandemic Unemployment Compensation provisions (discussed below).

Expanded Unemployment Compensation for Currently Eligible Individuals

The RWACA also makes available “Pandemic Unemployment Compensation” (PUC), which significantly expands unemployment compensation available to individuals eligible for regular unemployment compensation under state law.  PUC is also available to individuals eligible for Pandemic Unemployment Assistance (PUA, discussed above).

  • Eligible individuals will receive an additional $600 per week, beyond the amount they are eligible to receive under state unemployment law, for up to 4 months. Pursuant to this provision, the maximum weekly benefit in Massachusetts will be $1,423.
  • Eligible individuals who remain unemployed may receive an additional 13 weeks of unemployment benefits after state unemployment benefits are exhausted. Pursuant to this provision, the maximum length of benefits in Massachusetts will be 39 weeks.

Note that, as drafted, the PUC provision means that some employees could receive a weekly unemployment benefit that is greater than 100% of the individual’s weekly wage when employed. The Act also includes a “nonreduction rule,” pursuant to which a participating state may not modify state law such that the number of weeks (maximum benefit entitlement) or weekly benefit amount would be reduced below the amounts in effect as of January 1, 2020.

WAITING PERIOD FOR UNEMPLOYMENT INSURANCE BENEFITS

The RWACA includes a reimbursement incentive for states to waive the waiting period generally applicable to an individual’s first week of unemployment. As explained in Bello Welsh’s prior client alert, Massachusetts has already implemented a waiver of the one-week waiting period for individuals who applied for unemployment on or after March 10, 2020 due to circumstances relating to COVID-19.

Work Search Requirements

Under the RWACA, individuals must continue actively seeking work to remain eligible for the benefits described above; however, the law directs states to provide flexibility in meeting work search requirements, in case of individuals unable to search for work because of COVID-19.  Massachusetts has already implemented such flexibility, as described in our prior client alert.[2]

We will continue to monitor legal developments related to COVID-19 and provide updates as new laws and regulations applicable to employers are enacted.

[1] This regulation contains detailed rules for calculating unemployment benefits amounts with reference to state law provisions, discussion of which is outside the scope of this document.

[2] The RWACA also contains provisions concerning temporary financing of, grants for, and assistance in implementing short-time compensation programs.  As Massachusetts already has a WorkShare program, these provisions may not have practical effect for Massachusetts employers.

COVID-19: Changes to Massachusetts Unemployment Insurance Program

By Bello Welsh LLP

In response to the COVID-19 emergency, there have been several key changes made to the eligibility and work search requirements for unemployment insurance. The following summarizes the changes applicable to impacted claimants in Massachusetts, and highlights additional changes that could be implemented as a result of the federal legislation that was just passed by the United States Senate and is currently under consideration by the House of Representatives, the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”).

WAITING PERIOD AND AMOUNT OF BENEFITS

Waiver of Waiting Period

Governor Baker recently signed an act temporarily authorizing waiver of the one-week waiting period for unemployment benefits for any person who has become separated from work as a result of any circumstance relating to the outbreak of COVID-19, or the effects of the governor’s March 10, 2020 declaration of a state of emergency. Accordingly, individuals who applied for unemployment on or after March 10, 2020 will receive benefits for the first week of unemployment.

Length and Amount of Benefits

Under existing Massachusetts law, eligible individuals can receive up to 26 weeks of unemployment benefits in a benefit year. The current weekly benefit amount is approximately 50% of the individual’s average weekly wage, up to a maximum of $823 per week. An individual may also receive $25 per dependent child.

The CARES Act would significantly expand the length and amount of unemployment benefits, by providing for an additional $600 per week, and an additional 13 weeks of benefits. (As this legislation remains subject to change, we will update this information as further details become available.)   This means that claimants will receive whatever unemployment benefit they would receive under state law, plus $600.  This could create the anomalous result that a claimant receives more in unemployment benefits than they would have been paid in the ordinary course; the bill is, of course, subject to change, whether before it passes or in a subsequent corrections bill.

Individuals who work part time hours may still be paid unemployment benefits if the gross wages are less than the individual’s weekly benefit amount. Such individuals must report any earnings to the Department of Unemployment Assistance (DUA) each week, and any earnings greater than 1/3 of the weekly benefit amount will be deducted from the weekly benefit payment.

CLAIMANTS IMPACTED BY COVID-19

The DUA has also filed emergency regulations, which make it easier for those impacted by COVID-19 to claim unemployment benefits. All requirements of attending seminars at the MassHire career centers have been suspended, and appeal hearings will be held by telephone only. Further, the DUA may excuse missed deadlines during the processing of a claim, if the reason for failing to meet the deadline is due to COVID-19.

Eligibility

Most individuals who are out of work due to being impacted by COVID-19 should be eligible for unemployment insurance benefits. Individuals who are temporarily unemployed due to COVID-19 – whether laid off, furloughed, or if their workplace is fully or partially shut down – and expect to return to work will be considered to be in “Standby Status,” and are eligible for unemployment benefits. According to the DUA’s updated guidance for filing a new unemployment claim, being impacted by COVID-19 for purposes of unemployment eligibility may also include, but is not limited to, the following:

  • Employee or someone in his/her household is quarantined (whether due to an order by a civil authority or medical professional, or a self-imposed quarantine based on a reasonable fear of illness or exposure)
  • Employee leaves employment due to reasonable risk of exposure or infection or to care for a family member and does not intend to or is not allowed to return to work
  • Employee, or someone the employee is caring for, is “high risk” (older adults and/or persons with serious chronic medical conditions)
  • Lack of childcare

Individuals impacted by COVID-19 will be presumed eligible for four weeks of standby status. Individuals do not need to provide medical documentation, and employers need not even respond that the individual is on standby. However, employers may request that standby status be extended to up to eight weeks, and the DUA can further extend such standby status if necessary.

Work Search Requirements

Individuals impacted by COVID-19 will not be subject to the usual work search requirements; rather, such individuals will satisfy this requirement by taking reasonable measures to maintain contact with their employer and being available to perform any work that their employer may have for them, that they are able to do. Note, however, that work will not be considered suitable if it endangers the health of the employee or others in the employee’s household, and an employee need not accept such work.

CLAIMANTS NOT IMPACTED BY COVID-19

Individuals applying for unemployment benefits for reasons unrelated to COVID-19 are still required to conduct a weekly work search, which may include reviewing job postings online or working on a resume. However, such individuals only need to accept suitable work; accordingly, if the individual is quarantined, self-quarantining, caring for a family member who is sick, or caring for a child who is at home, the individual does not need to accept work offered until these conditions resolve.

Independent Contractors and Self-Employed Individuals

Self-employed individuals and individuals whose compensation is reported on an IRS Form 1099-MISC (“independent contractors”) are not currently eligible for unemployment benefits under Massachusetts law. However, the CARES Act would provide Pandemic Unemployment Assistance for certain self-employed individuals and independent contractors who are unemployed, partially unemployed, or unable to work due to COVID-19. We will update this information as details become available.

OTHER CONSIDERATIONS for Employers DUE TO COVID-19

Distribution of Unemployment Handbook Upon Separation

The DUA has issued a new COVID-19 Unemployment Handbook, which provides detailed instructions on filing for benefits online.  Employers that communicate with employees via email may distribute this information electronically to employees upon temporary layoff or termination.  In addition, all employers are required to provide a pamphlet regarding unemployment insurance  to employees at the time of a temporary or permanent separation (which may also be done electronically).

Grace Period for Quarterly Reports and Contributions

Employers that are impacted by COVID-19 may request up to a 60-day grace period for filing quarterly wage reports and paying contributions. The DUA is currently looking at the effect of COVID-19 on employer rate charging, and rates will not change until January 2021.

WorkShare Program – An Alternative to Layoffs

To avoid layoffs, employers may apply to the Executive Office of Labor and Workforce Development and the DUA’s WorkShare program. This program allows an employer to reduce the number of hours worked by a specific group of employees by 10%-60%, while maintaining health insurance and other benefits. The decreased wages are partially offset by unemployment benefits. Employers must submit quarterly contribution and wage detail reports and pay unemployment taxes in a timely manner, and benefits paid to employees under an approved WorkShare plan are charged the same way as regular unemployment benefits. Interested employers should visit the WorkShare website for additional information about eligibility and creation of a WorkShare plan. However, employers should carefully evaluate whether the WorkShare program will meet the employer’s needs, as the program is not particularly flexible, and once a WorkShare plan is approved, workers must work the reduced hours stated in the plan each week.

Note that certain employees may be entitled to other forms of paid leave for reasons related to COVID-19, pursuant to the Families First Coronavirus Response Act signed March 18, 2020 and effective April 1, 2020. For more information about eligibility for paid sick time and emergency FMLA leave, please see Bello Welsh’s detailed alert on this topic.

We will continue to monitor legal developments related to COVID-19 and provide updates as new laws applicable to employers are enacted.

Top Employment Law Changes for Massachusetts Businesses- End of Year Review

By Sasha Thaler

2014 brought a number of legislative changes which will affect Massachusetts employers of all sizes in 2015.  Here is a recap of the top 5 changes employers should be prepared for in the New Year. Read more