Expansion of Unemployment Insurance Under the CARES Act

Legal Alert

April 6, 2020

Unemployment Insurance

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was signed into law. The CARES Act provides 2 trillion dollars of economic relief for Americans, businesses and the health care industry. The CARES Act, in major part, expands unemployment compensation.

There are three aspects of the expansion of unemployment compensation under the CARES Act that will be relevant to most private sector employees: (1) Pandemic Unemployment Compensation (“PUC”) found in Section 2104 of the Act; (2) Pandemic Unemployment Assistance (“PUA”) found in Section 2102 of the Act; and (3) Pandemic Emergency Unemployment Compensation (“PEUC”) found in Section 2107 of the Act.

PUC goes into effect in a given State as soon as the State agrees to participate in the program. PUC is a flat $600.00, funded by the federal government, and is paid in addition to the normal State unemployment insurance payment. The only criteria for eligibility is that the individual must otherwise meet the State’s requirements for receiving unemployment insurance benefits. The program runs until July 31, 2020.

PUA is available for those who do not otherwise qualify for state unemployment insurance benefits, and who are out of work as a direct result of COVID-19. The weekly payment is equal to the benefit provided for under the Stafford Act Disaster Unemployment Assistance program (which, in general terms, is a function of the State benefit) plus $600.00. The program runs until December 31, 2020, and is retroactive to January 27, 2020. Benefits are capped at 39 weeks.

PEUC is a continuation of State unemployment insurance benefits for 13-weeks after the State benefits ends. To be eligible, individuals must have exhausted their state benefits and actively be looking for work. PEUC benefits are equal to: “(i) the amount of regular compensation . . . payable to such individual during such individual’s benefit year under the State law for a week of total unemployment; and (ii) the amount of Federal Pandemic Unemployment Insurance Compensation under section 2104 [$600.00].”

For further information or detail, the CARES Act can be found here.

For more information, please contact your Labor & Employment law counsel at Smith, Gambrell, & Russell, LLP.