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CARES Act – Unemployment Benefits

Michael Goff

April 02, 2020

Creation of Pandemic Unemployment Assistance (sec. 2102)

  1. Provides unemployment benefits to individuals that would otherwise not qualify for benefits. Anybody that is unable to work as a result of COVID-19 illness, quarantine, or movement restriction.
  2. Will cover the following:
    1. Self-employed workers
    2. Part-time workers
    3. Those with limited work histories
  3. Will not cover employees with the ability to telework, or those who are receiving paid sick leave or other paid benefits.
  4. Will still be state administered but fully federally funded.
    1. To qualify, an employee should file with the state entity, and state the reason for filing at that time.
  5. The program is effective through December 31, 2020

Non-Profits, Indian Tribes and Governmental Entities: reduces the amount that the entities are required to reimburse states for benefits paid to workers by 50% through December 31, 2020 (Sec. 2103).

Emergency Increase in Unemployment Compensation (Sec. 2104)

  1. Provides an additional $600 a week in Federal Pandemic Unemployment Compensation.
  2. Effective until July 31, 2020.
  3. Benefit is taxable but is disregarded in determining Medicaid or CHIP eligibility.
  4. Covers everyone listed under sec. 2102 referenced in Item 1 above.
  5. Will receive the benefit through each state program, as long as state agrees to administer it.

Full Federal Funding of First Week of Unemployment Benefits (sec. 2105)

  1. Relates to states that have a week waiting period before benefits begin
    1. Missouri, California and Illinois are in the process of waiving the waiting period.
  2. State can come to an agreement with the federal government to have the first week of unemployment benefits reimbursed, so the state does not have a waiting period.
  3. Effective until December 31, 2020.

Pandemic Emergency Unemployment Compensation (sec 2107)

  1. Allows for 13 weeks of federally funded unemployment compensation for individuals who have exhausted their state unemployment benefits through December 31, 2020.
  2. Covers everyone listed under sec. 2102 referenced in Item 1 above.

Short-Time Compensation (sec. 2108 – 2111)

  1. Short-Time Compensation (STC), also known as work sharing or shared-work program, is an alternative to layoffs for employers experiencing a reduction in available work.  If the work at a company slows down, the company can keep the employee on part time, and then still pay a portion of unemployment benefits for the lost wages.
  2. 100% reimbursements to states through December 31, 2020.
  3. Temporary financing of short-term compensation agreements: 50% reimbursement to the states.
  4. Grants are available to improve or create an STC plan.
  5. The DOL will provide free support to states interested in starting a STC plan.

Railroad Insurance Act (sec. 2112 -2114, matches most of the non-railroad provisions)

  1. Eliminates seven day waiting period for benefits.
  2. Allows individuals to receive $1,200 additional payments every two weeks through July 31, 2020.
  3. Extends benefits by 13 weeks through December 31, 2020.

Funds DOL Office of the Inspector General for Oversight of Unemployment Provisions with $25,000,000.

To review other provisions from the CARES Act, click here.

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