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.
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.
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.
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:
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.
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 email@example.com. 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.
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.
Charles R. Bacharach
410-576-4169 • firstname.lastname@example.org
James D. Handley
410-576-4201 • email@example.com
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