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CARES Act Expands Unemployment Insurance Benefits

The Coronavirus Aid, Relief and Economic Security Act (CARES Act) has expanded unemployment insurance benefits to combat historically high unemployment claims caused by the COVID-19 pandemic.

While unemployment benefit programs will still be administered by individual states, this federal infusion of an estimated $260 billion will strengthen each state’s program and expand the pool of eligible beneficiaries.

Supplementary Monetary Relief of $600

The CARES Act provides unemployed individuals with supplementary monetary unemployment relief. All unemployed workers will receive an additional $600 per week for up to four months of unemployment related to the COVID-19 pandemic.

This supplemental amount will be in addition to the unemployment insurance benefits individuals are already entitled to receive. This federal Pandemic Unemployment Compensation (PUC) will not be charged to an employer’s unemployment insurance benefits account. This portion of the act expires July 31, 2020.

Expansion of Benefits' Time Period

The CARES Act also extends unemployment insurance benefits by 13 weeks. The Pandemic Emergency Unemployment Compensation will extend Maryland’s standard 26 weeks of unemployment insurance benefits to 39 weeks. This portion of the act expires December 31, 2020.

Expansion of Eligibility for Unemployment Insurance Benefits

The CARES Act increases unemployment coverage by creating the Pandemic Unemployment Assistance program. This program will cover individuals who might not otherwise be covered by traditional unemployment benefits, including business owners, self-employed individuals, independent contractors and workers with a limited work history and history of wages earned. To be eligible, an individual must self-certify to their state unemployment agency that they are otherwise able to work but are unemployed or partially unemployed due to any of the following:

  • They have been diagnosed with COVID-19 or is experiencing symptoms and seeking a medical diagnosis;
  • They have a member of their household diagnosed with COVID-19;
  • They are providing care for a family member or household member who has been diagnosed with COVID-19;
  • They are the primary caregiver for a child or other person in the household who is unable to attend school or another facility as a direct result of COVID-19;
  • They are unable to reach the place of employment because of a quarantine imposed as a direct result of COVID-19;
  • They are unable to work because a health care provider has advised the individual to self-quarantine due to COVID-19 concerns;
  • They were scheduled to commence employment and do not have a job or are unable to reach the job as a direct result of COVID-19;
  • They have become the breadwinner or major support for a household because the head of household has died as a direct result of COVID-19;
  • They have quit their job as a direct result of COVID-19; or
  • They have a place of employment closed as a direct result of COVID-19.

Individuals who are still able to telework or are receiving paid sick leave or other paid leave benefits are not eligible to participate in this expanded benefit.

Support of Work Sharing Programs (Short-Time Compensation)

The CARES Act encourages states to expand their work sharing programs, also known as short-time compensation programs, by providing additional funding. These programs are designed to avoid layoffs by preserving jobs for trained workers. Individuals who are employed for a portion of the workweek but have had their hours reduced will receive partial unemployment benefits to supplement their lost wages.

Maryland has had a work sharing program in place since the 1980s. In Maryland, employees are not subject to the same conditions as those on regular unemployment insurance, such as making an active search for work or accepting offers of suitable work. As explained by Maryland’s Department of Labor  (the new name for the state Department of Labor, Licensing and Regulation):

“An employer has 20 full-time employees in a unit, each of whom works 40 hours per week. Due to an unexpected reduction in business, the employer must reduce payroll by 25 percent. Instead of laying off 25 percent of the employees, the employer may apply for Work Sharing. If the Work Sharing Plan is approved, affected employees would receive 25 percent of their UI benefits while being paid for hours worked at the Work Sharing employer. When business improves, the employer has retained its trained workforce and may resume normal operations.”

To be eligible, employers must reduce an employee’s normal weekly work hours by at least 20 percent but not more than 50 percent. Employers must apply to Maryland’s Work Sharing Program by emailing ui.worksharing@maryland.gov. Employers must notify their employees — and union if applicable — that they are applying to the program. An employer should submit its application seven to 15 days prior to the start date of its plan. While all participating employees in an affected unit or department must be reduced at an equal amount, hours of employees in different affected departments or units may be reduced at different percentages. Maryland’s Department of Labor also has a helpful information page with links to two sets of Q&As.

Based on U.S. Department of Labor (DOL) guidance issued this week, individuals receiving benefits under the work sharing program will also receive the supplemental $600 provided by the PUC section of the CARES Act.

Conclusion

The DOL is likely to issue further operating guidance regarding the CARES Act in the coming weeks. As with everything related to the COVID-19 pandemic, this is a quickly developing situation.

If you have any questions, please contact Charles R. Bacharach and James D. Handley.

Charles R. Bacharach
410-576-4169 • cbacharach@gfrlaw.com

James D. Handley
410-576-4201 • jhandley@gfrlaw.com

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