CARES Act: Pandemic Unemployment Assistance

Unemployment insurance (UI) provisions now include an additional $600 per week payment to each recipient for up to four months. They also extend UI benefits to self-employed workers, independent contractors and those with limited work history. The federal government will provide temporary full funding of the first week of regular unemployment for states with no waiting period and extend UI benefits for an additional 13 weeks through December 31, 2020, after state UI benefits end.

The CARES Act is a coronavirus relief package that dramatically expands unemployment insurance to for the jobless during the outbreak and is aimed at easing the suffering imposed by the crisis. According to the Department of Labor (DOL), jobless claims reached 3.28 million last week, an increase of three million from the previous week’s level. This marks the highest level of seasonally-adjusted initial claims in the history of the DOL’s data series.

The $2 trillion bill enacted Friday, March 27, creates two main categories of benefits for individuals. The first is Pandemic Unemployment Assistance, which covers people who are unable to work because of the coronavirus outbreak. This includes independent contractors, gig workers, sick people and those caring for a loved one during the outbreak. The second main benefit is an extra $600 per week over the next four months for those who are out of work and getting jobless benefits in their state.

Here is what you need to know about the Federally Funded Benefits Supplemental Federal Pandemic Unemployment Compensation:

• If you are self-employed you are eligible, this bill creates a new program, called Pandemic Unemployment Assistance, that extends benefits to gig workers, contractors and others who wouldn't otherwise qualify for unemployment compensation but cannot work due to the coronavirus emergency. You'll get the $600 per week, plus half the average unemployment benefit in your state.
• The $600 per week applies regardless of what your salary was.  
• Through July 31, 2020, the federal government would provide a temporary Federal Pandemic Unemployment Compensation (FPUC) of $600 a week for any worker eligible for state or federal unemployment compensation benefits. The FPUC would be paid in addition to and at the same time (but not necessarily in the same check) as regular state or federal UC benefits. The FPUC, combined with the underlying state unemployment benefit, would replace 100 percent of wages for the average U.S. worker.  
• The unemployment benefits are worth an estimated $260 billion, according to the Committee for a Responsible Federal Budget.
• The unemployment benefits come alongside direct cash payments to individuals and relief for businesses and the health care sector.
• Once you're on unemployment insurance in your state, you will be eligible for an extra $600 per week in emergency federal compensation through July 31, 2020. That's in addition to what you'll receive in state benefits.
• You will get $600 even if you were already getting unemployment before the outbreak.
•  If you were scheduled to start a job, but lost the job or are unable to get it as a result of coronavirus, you are eligible. 
• The $600 per week applies regardless of what your salary was.  
• If you are sick or caring for a sick family member you should be eligible for assistance once you certify that you are ordinarily able and willing to work but can't because of the virus emergency. That includes if you've tested positive or exhibit symptoms of COVID-19 or if you're caring for a member of your household or family who has been diagnosed with the illness.
• You should also be covered if you're out of work due to an inability to reach the office or to a quarantine imposed as a direct result of the coronavirus crisis.
• What about tipped workers? Under federal law, tips are considered part of compensation for UC. However, states only have the tip income reported by employers, who sometimes underreport them, in violation of federal law. If employers fail to follow the law and do not accurately report tip income, it might lower state UC benefits for those workers, or, in extreme cases, cause them not to have enough recent income to qualify for UC under state law. Under the CARES Act, tipped workers who qualify for UC will receive the Federal Pandemic Unemployment Compensation, an additional $600 a week payment, on top of their state UC payment like any other worker receiving UC benefits. Unemployed workers who do not have enough reported income to qualify for state UC payments but are able and available to work, but for COVID-19, would likely be eligible for a smaller federal payment, depending on their state’s implementation of Pandemic Unemployment Assistance.
• Expansion of “Work Sharing” Programs to Provide Partial Benefits to Individuals with Reduced Hours. The federal government would temporarily provide full funding for states with Short-Time Compensation or “work sharing” programs in law, in which employers voluntarily make an agreement with the state unemployment office to prevent layoffs by reducing employee hours, and workers with reduced hours are eligible for partial state UC benefits. States currently bear the full cost of these arrangements. States would receive $100 million for work sharing program promotion and enrollment of employers, and for implementation or improved administration.  
• When do the temporary emergency benefit increases end? The CARES Act terminates the $600 a week FPUC supplement on July 31, 2020, and other provisions on December 31, 2020.

For more information on the CARES Act watch: