On March 27, 2020, President Trump signed the Coronavirus Aid, Relief and Economic Security Act (CARES Act). The CARES Act is intended to provide economic relief to individuals and businesses facing hardship due to the COVID-19 pandemic, and it contains a number of employment-related provisions. In addition to the small business loans we wrote about last week, available here, the CARES Act also includes the following key provisions:
Unemployment Insurance Expansion
The CARES Act expands eligibility for unemployment benefits and increases the benefits available to partially or totally unemployed individuals.
First, the CARES Act provides for up to 39 weeks of unemployment benefit assistance for certain “covered individuals” who are unemployed or partially unemployed as a result of COVID-19. Most states only provide 26 weeks of coverage so this adds 13 extra weeks.
The Act extends eligibility for COVID-19-related benefits to individuals who otherwise would not be eligible for regular unemployment compensation, including independent contractors, self-employed individuals, and those with a limited work history. The CARES Act also provides benefits for individuals who have exhausted all regular unemployment compensation or extended benefits under state and federal law or under the Act.
To obtain unemployment benefits related to COVID-19 under the CARES Act, individuals must self-certify that they are able and available to work and are unemployed, partially unemployed or are unable or unavailable to work because of one or more of the following:
- They have been diagnosed with COVID-19 or are experiencing symptoms and seeking a medical diagnosis.
- A member of their household has been diagnosed with COVID-19 or they are providing care for a family member or household member who has been diagnosed.
- A child or other member of the household for which the individual has primary caregiving responsibility is without care or out of school as a direct result of COVID-19.
- They are unable to reach their place of work due to a quarantine order (by a healthcare provider or otherwise).
- They were scheduled to begin their employment and either cannot reach the job or do not have a job as a direct result of COVID-19.
- They had to quit a job as a direct result of COVID-19.
- They have become the major support for a household because the head of the household died as a direct result of COVID-19.
- Their place of employment is closed as a direct result of COVID-19.
Individuals who are able to telework with pay or who are receiving paid sick leave or other paid benefits, including paid leave under the new Families First Coronavirus Response Act (FFCRA), are not eligible for unemployment compensation under the CARES Act.
The CARES Act also expands unemployment benefits by increasing the dollar amount of benefits available and extending length of time during which an individual may collect benefits. Individuals who apply for and receive state-provided unemployment compensation benefits in the state in which they were employed also will receive an additional payment of $600 per week on top of the state-authorized weekly benefits. This additional federal benefit is available only until July 31, 2020.
Under the CARES Act, the federal government likewise will fund up to an additional 13 weeks of unemployment compensation for individuals who remain unemployed after they have exhausted their benefits under state law, up to a maximum of 39 weeks total of unemployment compensation benefits. Apart from the additional $600 per week that is provided for up to four months, the other expanded benefits all last through December 31, 2020.
Amendments to the FFCRA
The CARES Act also revises certain portions of the FFCRA. Concerning the availability of paid leave under the FFCRA for rehired employees, the CARES Act amends the FFCRA to provide some flexibility for rehired employees: If an employee was laid off after March 1, 2020, and had worked for the employer for 30 days prior to the layoff, upon rehire, the employee is now immediately eligible for the 12 weeks of enhanced FMLA leave (until the applicable FFCRA provision sunsets at the end of 2020).