Richard Gerakitis, Partner, Troutman Sanders
Emily E. Schifter, Associate, Troutman Sanders
Susan K. Lessack, Partner, Pepper Hamilton
Tracey E. Diamond, Of Counsel, Pepper Hamilton
Lee E. Tankle, Associate, Pepper Hamilton

Hot on the heels of the temporary rule issued April 1, 2020 regarding the Families First Coronavirus Response Act, the Department of Labor’s (“DOL”) Employment and Training Administration recently issued three new guidance documents providing additional clarity regarding the unemployment insurance (“UI”) provisions of the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act.

As we previously covered, the CARES Act provided a significant expansion in unemployment insurance benefits and availability nationwide as part of a wide-ranging $2 trillion stimulus package. However, many employers (and employees) were left with questions regarding how these newly expanded benefits might play out in practice. With unemployment claims continuing to reach record highs, these letters provide some needed insights on the scope of benefits provided.

Additional Guidance to States – COVID-19 Warrants Flexibility, But Only So Much
First, in a letter issued April 2, 2020, the DOL provided states with instruction on available flexibility in staffing related to the UI provisions of CARES. But along the way, this guidance (and the two following it) emphasized the importance of ensuring the “fundamental eligibility requirements of the Federal-State UI program,” including, in what is likely a welcome reminder for many employers, reiterating that “quitting work without good cause to obtain additional benefits would be fraud.” This guidance further confirmed states’ “fundamental role in ensuring the integrity of the UI program” and emphasized that while states have been given increased flexibility in response to COVID-19, this flexibility is not intended to undercut key eligibility and accountability requirements.

The DOL reminded states that these flexibilities are “generally limited to dealing with the effects of COVID-19.” Many states have revised their UI laws in response to COVID-19 through emergency rulemaking or executive order to temporarily relax standard requirements relating to being able and available to work, or looking for work, but the April 2 guidance reminds states that their eligibility standards, even as modified or relaxed, continue to play a critical role in the UI system.

Details on Coordination of Benefits
Importantly, the April 2 guidance letter also clarifies the order in which an individual eligible for benefits should apply for them under the UI programs provided by several state and federal CARES Act.

An individual eligible for regular state UI benefits:

  • Must first apply for and be awarded regular state UI benefits. Individuals awarded regular benefits may receive an additional $600/week in Federal Pandemic Unemployment Compensation (“FPUC”) benefits pursuant to Section 2104 of the CARES Act.
  • May then be eligible, if the individual exhausts regular UI benefits, to receive extended compensation under Section 2107 of the CARES Act through Pandemic Emergency Unemployment Compensation (“PEUC”) for up to an additional 13 weeks.
  • May apply for state extended benefits consistent with state law if the individual exhausts the Section 2107 PEUC benefits, and the state has “triggered on” its extended benefits program.
  • May apply for additional UI compensation under Section 2102, Pandemic Unemployment Assistance (“PUA”), if any eligibility remains or the state has not “triggered on” its extended benefits program.

Individuals not eligible for regular state UI benefits should apply directly for Section 2102 PUA benefits if they believe they may be eligible.

Confirmation of Coverage for PEUC Section 2104 Benefits
In a letter issued April 4, 2020, the DOL provided additional details regarding the Section 2104 FPUC benefits – that extra $600 federally funded weekly benefit you have heard so much about.

Among other details, this letter clarifies that the Section 2104 FPUC benefits are available to individuals collecting regular UI, as well as individuals collecting the benefits from several other programs – including, in what had been an open question in the minds of many employers, individuals receiving benefits from short-time compensation programs in states that operate them (or initiate them). The guidance confirms that individuals receiving any benefit from their state – full or partial – may receive the additional $600 weekly benefit, noting that: “if the individual is eligible to receive at least one dollar ($1) of underlying benefits for the claimed week, the claimant will receive the full $600 FPUC.” However, if an individual is not entitled to an underlying benefit in any given week because, for example, they have performed part-time work for which they earn more than their weekly benefit amount, the individual will presumably not be eligible for either the regular UI or FPUC benefits for that week.

The guidance also addresses the end date for payment of the additional benefit. As noted, FPUC benefits are not payable for any week of unemployment ending after July 31, 2020. Accordingly, in states where the week of unemployment ends on a Saturday, the last week that FPUC benefits may be paid is the week ending July 25, 2020. For states where the week of unemployment ends on a Sunday, the last week that FPUC benefits are payable is the week ending July 26, 2020.

Additional Detail on Section 2102 PUA Benefits
Finally, in a letter issued April 5, 2020, the DOL offered further clarity regarding the Section 2102 PUA benefits – the new program that expands possible eligibility for UI benefits to many individuals who historically did not have access to them, like gig workers or individuals new to the workforce or with otherwise limited earnings history.

The letter confirms that only individuals impacted by one of the COVID-19 related reasons enumerated in Section 2102 qualify for PUA benefits. The letter also reiterates that PUA benefits are not payable to individuals who have the ability to telework with pay, or who are receiving paid sick leave or other paid leave benefits, but noted that an individual “receiving paid sick leave or other paid leave benefits for less than his or her customary work week” or who “has been offered the option of teleworking with pay and does telework with pay, but is working less than the individual customarily worked prior to the COVID-19 pandemic,” still may be eligible for at least reduced weekly PUA benefits.

The letter also explains how several COVID-19-related circumstances can qualify an individual for PUA benefits.  For example:

  • An individual who has been diagnosed with COVID-19 or is experiencing symptoms of COVID-19 and is seeking a medical diagnosis, for purposes of Section 2102, may include:
    • An individual who has to quit his or her job as a direct result of COVID-19 because the individual has tested positive for the coronavirus or has been diagnosed with COVID-19 by a qualified medical professional, and continuing work activities, such as through telework, is not possible by virtue of such diagnosis or condition; or
    • An individual who has to quit his or her job due to coming in direct contact with someone who has tested positive for the coronavirus or has been diagnosed by a medical professional as having COVID-19, and, on the advice of a qualified medical health professional is required to resign from his or her position in order to quarantine.
  • An individual who is providing care for a family member or a member of the individual’s household who has been diagnosed with COVID-19, for purposes of Section 2102, may include:
    • An individual who is “providing care” to a family member when the provision of such care requires such ongoing and constant attention that the individual’s ability to perform other work functions is severely limited.
    • However, an individual who is assisting a family member who is able to adequately care for him or herself is not “providing care” under this category.

Finally, in this letter the DOL reminded applicants (and states) that many of the COVID-19 related reasons that allow individuals to qualify for Section 2102 PUA assistance will be short in duration, and, if that is the case, the individual will not actually receive the maximum 39 weeks of benefits outlined in that section. For example, if an individual qualified on the basis that he or she “is unable to reach the place of employment because of a quarantine imposed as a direct result of the COVID-19 public health emergency,” and that quarantine lasts only a few weeks, he or she may lose eligibility to the Section 2102 benefits once the quarantine ends, at least on that basis.

We will closely monitor and update any changes as appropriate. In the meantime, please visit the Pepper Hamilton/Troutman Sanders COVID-19 Resource Center for COVID-19-related news and developments.