Unemployment Insurance Relief During COVID-19 Pandemic!
Well let’s start off with the background of the necessity of the new guidelines to the Unemployment Insurance under the CARES Act. On March 18, 2020, the Families First Coronavirus Response Act (FFCRA), was signed into law providing additional flexibility for state unemployment insurance agencies and additional administrative funding to respond to the COVID-19 pandemic. The Coronavirus Aid, Relief, and Economic Security also known as the (CARES) Act was signed into law on March 27 which helped to expand states’ ability to provide unemployment insurance for many workers impacted by the COVID-19 pandemic, including independent contractors and other workers who are ordinarily ineligible for unemployment benefits.
What is Unemployment Insurance?
Well, Unemployment Insurance is a joint state-federal program that provides cash benefits to eligible workers. Each state administers a separate UI program, but all states follow the same guidelines established by federal law. Unemployment insurance payments (benefits) are intended to provide temporary financial assistance to unemployed workers who are unemployed through no fault of their own. Each state sets its own additional requirements for eligibility, benefit amounts, and length of time benefits can be paid. Generally, benefits are based on a percentage of your earnings over a recent 52-week period, and each state sets a maximum amount. Benefits are subject to federal and most state income taxes and must be reported on your income tax return. You may choose to have the tax withheld from your payment. Also, I’d like to add that this is an employer’s tax that is paid each quarter.
To apply for Unemployment Benefits you must contact your state’s unemployment insurance office .
Now let’s get to the questions that I’ve been asked since this bill was passed that relates to the COVid-19 pandemic.
I am an independent contractor. Am I eligible for unemployment benefits under the CARES Act?
You may be eligible for unemployment benefits, depending on your personal circumstances and how your state chooses to implement the CARES Act. States are permitted to provide Pandemic Unemployment Assistance (PUA) to individuals who are self-employed, seeking part-time employment, or who otherwise would not qualify for regular unemployment compensation. To qualify for PUA benefits, you must not be eligible for regular unemployment benefits and be unemployed, partially unemployed, or unable or unavailable to work because of certain health or economic consequences of the COVID-19 pandemic.
The PUA program provides up to 39 weeks of benefits, which are available retroactively starting with weeks of unemployment beginning on or after January 27, 2020 and ending on or before December 31, 2020. The amount of benefits paid out will vary by state and are calculated based on the weekly benefit amounts (WBA) provided under a state’s unemployment insurance laws. Under the CARES Act, the WBA may be supplemented by the additional unemployment assistance provided under the Act.
My regular unemployment compensation benefits do not provide adequate support given the unprecedented economic challenges caused by the COVID-19 outbreak. Can I expect to receive additional relief?
Yes, depending on how your state chooses to implement the CARES Act. The new law creates the Federal Pandemic Unemployment Compensation program (FPUC), which provides an additional $600 per week to individuals who are collecting regular UC (including Unemployment Compensation for Federal Employees (UCFE) and Unemployment Compensation for Ex-Servicemembers (UCX), PEUC, PUA, Extended Benefits (EB), Short Time Compensation (STC), Trade Readjustment Allowances (TRA), Disaster Unemployment Assistance (DUA), and payments under the Self Employment Assistance (SEA) program). This benefit is available for weeks of unemployment beginning after the date on which your state entered into an agreement with the U.S. Department of Labor and ending with weeks of unemployment ending on or before July 31, 2020.
My employer has remained open because it is essential. I’m not sick, nor is anyone in my household sick. I do not have children or care for someone who cannot care for themselves. However, I’m afraid of getting Coronavirus from customers coming to the store, so I quit and filed for unemployment. Can I obtain benefits under the CARES Act?
No. Under the CARES Act, you may be eligible for benefits if you meet one of the circumstances listed in the Act, but none include the scenario described. On these facts, you are not eligible for Pandemic Unemployment Assistance (PUA) because you do not meet any of the qualifying circumstances.
There are, however, circumstances under the CARES Act in which specific, credible health concerns could require an individual to quit his or her job and thereby make the individual eligible for PUA. For example, an individual may be eligible for PUA if he or she was diagnosed with COVID-19 by a qualified medical professional, and although the individual no longer has COVID-19, the illness caused health complications that render the individual objectively unable to perform his or her essential job functions, with or without a reasonable accommodation. However, voluntarily deciding to quit your job out of a general concern about exposure to COVID-19 does not make you eligible for PUA. If you believe your employer’s response to the possible spread of COVID-19 creates a serious safety hazard or if you think your employer is not following OSHA standards, you can file a complaint with the Occupational Safety and Health Administration.
As a general matter, you are likely to be eligible for PUA due to concerns about exposure to the coronavirus only if you have been advised by a healthcare provider to self-quarantine as a result of such concerns. For instance, an individual whose immune system is compromised by virtue of a serious health condition, and who is therefore advised by a healthcare provider to self-quarantine in order to avoid the greater-than-average health risks that the individual might face if he or she were to become infected by the coronavirus will be eligible for PUA if all other eligibility requirements are met.
I was furloughed by my employer, but they have now reopened and asked me to return to my job. Can I remain on unemployment?
No. As a general matter, individuals receiving regular unemployment compensation must act upon any referral to suitable employment and must accept any offer of suitable employment. Barring unusual circumstances, a request that a furloughed employee return to his or her job very likely constitutes an offer of suitable employment that the employee must accept.
While eligibility for PUA does not turn on whether an individual is actively seeking work, it does require that the individual be unemployed, partially employed, or unable or unavailable to work due to certain circumstances that are a direct result of COVID-19 or the COVID-19 public health emergency. In the situation outlined here, an employee who had been furloughed because his or her employer has closed the place of employment would potentially be eligible for PUA while the employer remained closed, assuming the closure was a direct result of the COVID-19 public health emergency and other qualifying conditions are satisfied. However, as soon as the business reopens and the employee is recalled for work, as in the example above, eligibility for PUA would cease unless the individual could identify some other qualifying circumstance outlined in the CARES Act.
One of my workers quit because he said he would prefer to receive the unemployment compensation benefits under the CARES Act. Is he eligible for unemployment? If not, what can I do?
No, typically that employee would not be eligible for regular unemployment compensation or PUA. Eligibility for regular unemployment compensation varies by state but generally does not include those who voluntarily leave employment. Similarly, to receive PUA, an individual must be ineligible for regular unemployment compensation or extended benefits under state or federal law, or pandemic emergency unemployment compensation, and satisfy one of the eligibility criteria enumerated in the CARES Act. There are multiple qualifying circumstances related to COVID-19 that can make an individual eligible for PUA, including if the individual quits his or her job as a direct result of COVID-19. Quitting to access unemployment benefits is not one of them. Individuals who quit their jobs to access higher benefits and are untruthful in their UI application about their reason for quitting, will be considered to have committed fraud.
Now to add to this I would like to focus on the High School and College Graduates when it comes to PUA.
PUA for High School and College Graduates🎓
Graduation season is rapidly approaching. About 1.2 million high school graduates leave high school each year and do not enroll in college, and about 4 million enrolled in higher education at the undergraduate and graduate level will graduate from their program.
Students who lost a job due to COVID-19 during the academic term and graduate this May or June should qualify for PUA based on a job loss, regardless of whether they had a separate offer of employment starting after the academic term.
Students who were not working during the academic term, or who were working but had a separate employment opportunity planned for the summer, may qualify for PUA if that job offer falls through.
Unfortunately, students who were still searching for post-graduation employment opportunities but are not currently working would not qualify.
Debra Marie The Tax Queen Podcast