During the COVID-19 pandemic, “unemployment” has become a household name along with hand sanitizer, toilet paper and social distancing.  As of April 3, 2020, the NC Division of Employment Security (DES) announced that approximately 370,000 North Carolinians had filed claims for unemployment in the last 3 weeks.  This spike is unprecedented.  Prior to COVID-19, the DES received only about 3,000 unemployment claims per week.

Moving into April, the number of unemployment claims has continued to sky rocket as many businesses have slowed operations or closed. Both employers and employees, however, are relieved to know that help is on the way.

The federal CARES Act, passed on March 27, 2020, created three programs to enhance and expand unemployment benefits provided at the state level.  The DES is now feverishly working to implement these programs on the state level. 

What can employers and employees expect with regards to unemployment benefits changes? 

• No Waiting Period.  In NC, there is typically a one week waiting period before an employee is eligible for unemployment benefits.  If the employee, however, is temporarily laid off or terminated due to COVID-19, the one week waiting period is waived.  Both employers and employees must report COVID-19 as the reason for the layoff or separation.  Claimants are able to apply online or via telephone.  While the online process is supposed to be quicker, claimants should still expect delays in accessing the online system, which is available here.
• More Money.  Under the Federal Pandemic Unemployment Compensation (FPUC), eligible claimants will receive an additional $600 in weekly unemployment benefits – above and beyond the weekly benefit amount to which the individual would otherwise be entitled from the DES.  The DES expects to start issuing these payments by April 17.   
• More Workers.  Although workers who are self-employed or independent contractors are generally not eligible for unemployment benefits in NC, the Pandemic Unemployment Assistance (PUA) program now provides coverage.  Individuals in this category may proceed with filing their claims, but the DES currently expects that it will be around April 25 before it is able to start processing these claims. 
• More Weeks.  The Pandemic Emergency Unemployment Compensation (PEUC) extends the time an eligible claimant can receive unemployment benefits.  In NC, claimants are generally limited to 12 weeks of benefits, with a maximum weekly benefit amount of $350.  The PEUC, however, allows eligible claimants to extend the benefit period up to 13 additional weeks if they remain unemployed for reasons related to COVID-19.
• More Qualifying Reasons. Under the PUA, the qualifying reasons for unemployment have been expanded.  In NC, claimants typically have to be physically able, available, and actively seeking work.  Under the PUA, however, individuals may be covered if:  they have been diagnosed with COVID-19, are experiencing symptoms of COVID-19 and seeking a diagnosis, a member of their household has been diagnosed with COVID-19, the individual is caring for a family member with COVID-19, or they are the primary caregiver and need to care for their child due to the child’s school or daycare being closed due to COVID-19.  For the list of new qualifying reasons under PUA, click here.  Employees cannot receive benefits, however, if they simply opt to quit work because they would prefer to stay home and draw unemployment benefits.  Additionally, employees who are able to telework with pay or are receiving paid sick leave are not eligible for unemployment benefits.

While employers should inform employees of their potential eligibility for unemployment benefits where employees have reduced hours or have been laid off from work, remember that the DES ultimately makes decisions about unemployment eligibility and the amount of benefits each employee may receive. 

Based upon the Executive Order entered by Gov. Roy Cooper on April 9, it will be easier for employers who are interested in filing claims on behalf of employees, who are still on the employer’s payroll, but have been temporarily laid off or are working less than 60% of their customary scheduled full-time hours (an “attached claim”).  Under the new Order, which is effective for attached claims filed as of April 1, 2020, employers:

• Will not have to prepay the cost of the unemployment benefits for their employees at the time the attached claim is filed;
• Are able to file attached claims for a period that exceeds six weeks of benefits;
• Are able to submit attached claims for an employee more than once a year; and
• Are not required to have a positive credit balance with the DES before filing attached claims.

With more employers able to file attached claims on behalf of their employees, it should decrease the volume of individual claims that are overwhelming DES’ system.  Equally important, this may be an avenue for employers to better support their employees and take on some of the administrative burden and stress faced by employees who are temporarily laid off or working reduced hours.