Understanding Unemployment Changes

In response to the coronavirus pandemic, the Pennsylvania legislature and U.S. Congress have enacted several pieces of legislation aimed at helping people that become unemployed or have their hours reduced due to the impact of the coronavirus pandemic on businesses.  These pieces of legislation provide additional funding, expand benefits to the unemployed, and make fundamental changes to the unemployment compensation structure by extending benefits to individuals who are not otherwise eligible for unemployment benefits.

This client alert provides an overview of the recent changes to unemployment compensation.

FFCRA

The Families First Coronavirus Response Act (“FFCRA”) adds $1 billion in funds available to state unemployment programs and relieves administrative burdens in accessing and administering emergency funds for states that elect to participate.  Pennsylvania has elected to participate, making a number of changes required by the FFCRA to access federal funds and process payments more quickly, those changes include:

• Requiring that employer notify an employee of the availability of unemployment compensation upon separation from employment;
• Waiving the one-week waiting period for benefits; and
• Waiving the search-for-work requirement.
  

CARES Act

The Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) makes several changes to the unemployment compensation system, both expanding benefits available and providing relief for individuals that are not eligible to receive traditional unemployment benefits.  The CARES Act provides for the following changes to unemployment compensation:

• Assistance for up to 39-weeks (which can be extended by the Secretary of the Department of Labor), for individuals that would not otherwise be entitled to any other unemployment compensation if the unemployment, partial unemployment, or inability to work is due to:
  • a COVID-19 diagnosis of the individual or a household member;
  • caring for a family member diagnosed with COVID-19 or a child whose school or childcare is closed;
  • the individual cannot work because of a COVID-19 outbreak or self-quarantine order from a health professional;
  • the individual was scheduled to start a job but no longer can because of COVID-19;
  • the individual has become the breadwinner of a household because the head of household has died because of COVID-19;
  • the individual had to quit their job because of COVID-19;
  • the individual’s place of employment closed as a result of COVID-19; or
  • the individual is self-employed, is seeking part-time employment, does not have a sufficient work history, or otherwise would not qualify for regular unemployment, and the individual becomes unemployed or cannot find work.
• Reimbursement to governmental entities and certain non-profit organizations for half of their costs incurred to pay unemployment benefits.
• A $600 weekly payment, funded by the federal government, in addition to a person’s weekly unemployment benefit.
• Federal funding for the first week of unemployment payments for any state that waives the one-week waiting period.
• Access to pandemic emergency unemployment compensation for individuals who have exhausted regular unemployment and are actively seeking work.
• Funding for short-time compensation via temporary federal financing, or federal grants.
  

Pennsylvania House Bill 68

House Bill 68 was recently enacted, making changes to the Pennsylvania unemployment system necessary to take advantage of the expanded funding and benefits provided by the FFCRA and CARES Act.  In addition, House Bill 68 provides procedures for reimbursable employers, i.e. employers that make payments in lieu of unemployment contributions, to access and pay back the expanded unemployment benefits.  

U.S. Department of Labor Guidance

The U.S. Department of Labor has issued guidance for states in determining unemployment eligibility, permitting significant flexibility in response to the unprecedented impacts of the coronavirus pandemic.  The guidance is linked below in this Alert.  Key clarifications include:

• Federal law allows benefits where: (1) An employer temporarily ceases operations due to COVID-19, preventing employees from coming to work; (2) An individual is quarantined with the expectation of returning to work after the quarantine is over; and (3) An individual leaves employment due to a risk of exposure or infection or to care for a family member.
• Federal law does not require an employee to quit in order to receive benefits due to the impact of COVID-19.
• An individual on paid leave is still receiving pay, and therefore not unemployed.
• If an employer is closed, an employee is not entitled to emergency paid sick leave or emergency FMLA, and instead should apply for unemployment.
• No matter whether an employee is furloughed, terminated, or laid off, the employee should contact unemployment to discuss eligibility.
  

Please contact a MacDonald Illig attorney if you have any questions about the changes to unemployment compensation or otherwise.  Our office is closed, pursuant to the Governor’s Business Closure Order, but our attorneys are working remotely, available at any time via e-mail or cell phone.