The U.S. Department of Labor released an initial guidance to states on how they will administer the $600 supplemental weekly unemployment benefits provided under the CARES Act, along with the 13-week emergency state benefits extension. DOL indicated that all states have executed agreements with DOL to implement the benefits, which can start immediately and will pay benefits retroactive to January 27, 2020.
The guidance explains to states the criteria for paying the supplemental benefits to people not usually eligible for unemployment insurance compensation. These include independent contractors, self-employed individuals, and gig workers. All individuals claiming expanded unemployment benefits must show qualifications relating at least in part to a COVID-19 connected event.
One question we have received from multiple clients involves the eligibility of workers whose hours have been reduced as a result of COVID-19 related business reasons but who continue to work and receive pay. According to the new DOL guidance: “If the individual is eligible to receive at least one dollar ($1) of underlying benefits for the claimed week, the claimant will receive the full $600.” This indicates that if the state allows unemployment benefits based on a reduction in wages, eligible employees would qualify for the full benefit. For example, North Carolina currently allows unemployment benefits if the claimant’s wages are reduced by more than 40%.
This and other questions are likely to be addressed in more detail as states develop implementation plans for paying the new benefits. The state directive portion of the DOL guidance can be found here.
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