Unemployment compensation

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Q: What Does the $1.9 Trillion American Rescue Plan Mean for Employers?

A: On March 11, nearly a year after the enactment of the Families First Coronavirus Response Act (FFCRA) and CARES Act, and three months after the enactment of the Consolidated Appropriations Act of 2021, President Biden signed a sweeping $1.9 trillion stimulus package called the American Rescue Plan. The headline-grabbing elements of the American Rescue Plan include $1,400 direct payments to individuals earning below a certain income threshold, $160 billion for COVID-19 vaccine and testing programs, and $360 billion for aid to state, local, and territorial governments. Critical to employers, the American Rescue Plan once again extends federal unemployment insurance benefits and modifies employee entitlement to COVID-19-related leave under the FFCRA.

Q. What is the standard for determining whether an individual is an independent contractor under Pennsylvania’s unemployment compensation law?

A. Following a recent decision from the Pennsylvania Supreme Court, businesses now face a tougher standard under the state’s unemployment compensation law for demonstrating that a worker is an independent contractor and not an employee. In A Special Touch v. Commonwealth of PA, the Court held that, to claim the exemption from tax liability for a self-employed worker, the employer must show that the individual in question is involved in an independent trade or business “in actuality,” rather than “having the mere ability to be so involved.”

Q.  Our Company just terminated an employee for a social media post that was in violation of our social media policy. Will she be entitled to unemployment compensation benefits?

A.  Possibly.

While unemployment compensation laws vary from state-to-state, former employees generally are entitled to benefits unless the employer can prove that the employee’s employment ended due to a disqualifying reason, such as willful misconduct or voluntary discharge.