Unemployment Regulations are Changing, and We're Sharing the Latest
With companies scrambling to manage their workforces during the COVID-19 pandemic, there has been a significant increase in unemployment claims based on disruptions caused by the coronavirus.
Our Unemployment Cost Management team has been monitoring both federal and state-level changes related to unemployment insurance programs and claims management. We hosted a webinar on April 3 to share the latest information we have, as well as tips and best practices for unemployment claims management.
Unemployment Provisions in the CARES Act
There are 16 sections of the CARES Act that focus on unemployment. Guidance is only just starting to come out from the DOL; in the webinar, we covered three topics that seem most important for employers to understand, essentially helping address: how much can someone collect, for how long and what are the employer responsibilities?
Regular state UI can be collected for a period of 10-26 weeks, generally, based upon each state’s regulations. The CARES Act allows for a 13-week federal extension to regular state benefits. So, in a state that has 26 weeks, an individual could be eligible and collect for up to 39 weeks. The additional 13 weeks of benefits are fully-funded by the federal government for tax-contributing employers. And 50% covered for government entities and nonprofits (those types of organizations typically pay 100% of benefits, dollar for dollar). For reimbursing entities, that 50% coverage is for ALL claims - not just COVID-related claims.
The federal funding provisions in the CARES Act do NOT pay for any of the regular state benefits associated with a claim, except for the waiting week. Individual states are still charged with promulgating their own rules if they don’t already exist, in order to allow relief of charges for the regular State UI weeks. At Equifax, we are already starting to see decisions come in from states which relieve employers of charges, and some that do not.
The Pandemic Unemployment provisions of the CARES Act allow for an additional $600 on top of regular state UI and extended federal benefits. This $600 is FULLY federally funded. Employees that are either partially or fully unemployed are eligible for the $600. This Pandemic assistance is available for the entire duration of the state benefits, plus any federal extended weeks.
One other element we touched on that was clarified in the DOL advice issued on Thursday is around short-time compensation programs. These are programs that incent employers to not fully lay off their workforce, but rather reduce hours and keep employees job-attached. These programs require specific application and approval from the states. The CARES Act provides 100% funding for payments under STC programs through December 31, 2020.
Who can Collect Benefits Under the CARES Act?
So, who is eligible to collect benefits under the CARES Act? The legislation is pretty generous (although exceptions may apply based on state) and in general, the following employees could collect:
Employees laid off due to state-mandated closures
Employees laid off due to COVID-19 within their location
Employees laid off due to pure reduction in force
Employees quarantined due to COVID-19
Employees with a reduction in hours
Employees that were working full-time and are now working reduced hours
Employers are still responsible for:
Regular UI benefits - Unless the states where you operate have implemented a relief of charge
As the reimburser: 50% - Unless your state has passed or passes a full relief bill
Bottom line, there are a lot of moving parts at the moment. Employers should continue to pay close attention to the new guidance issued by the states in order to best serve their impacted employees, while also being mindful of the potentially changing status of their employer tax accounts.
For additional information on other potential impacts and some of the activity we are seeing at the state level, along with some common questions we’re hearing from employers, watch our free webinar. Have questions or need assistance with your unemployment claims? Equifax customers may reach out to their Unemployment Insurance Consultant or Account Manager. If you are not a current customer, please contact a member of our Unemployment Solutions Sales team for additional information.