COVID-19 CARES Act Expands Unemployment Benefits

The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) uses expanded unemployment as a way to provide relief for unemployed Americans and state unemployment funds.

Division A Title II of CARES, called Assistance for American Workers, Families, and Businesses, expands payments of unemployment insurance in sections 2102 through 2109.

Section 2102 is for those who would not otherwise be eligible for unemployment, such as those self-employed, employed part-time, or employed for a short time.  So long as an individual is not able to telework with pay or is not currently receiving paid leave, assistance is available if the individual is out of work because of COVID-19 and its effects, whether the worker is ill or quarantined, or must care for family members who are ill or unable to receive care elsewhere.

Section 2103, Emergency Unemployment Relief for Governmental Entities and Nonprofit Organizations, provides funds to reimburse governmental entities and certain non-profits for amounts paid for unemployment between March 13 and December 31, 2020.  Details and regulations will be forthcoming from the Department of Labor and the Internal Revenue Service.

Sections 2104, 2105, and 2107 through 2109 all provide for additional benefits paid for by the federal government:

  • Anyone eligible for unemployment benefits receives an additional $600 per week through July 2020.
  • The federal government will pay for the first week of benefits, if a state waives its standard one-week waiting period, so that anyone in the state who is unemployed is receiving payments immediately after becoming unemployed.
  • If state unemployment benefits are exhausted, the federal government will provide up to 13 weeks of additional unemployment benefits, up to 39 weeks in most states, at a weekly rate of $600.
  • States with a current Short-Time Compensation (STC) program will receive 100% of the cost from the federal government through December 31, 2020. For states that now choose to implement a STC program, the federal government will reimburse the state 50% of the cost through Dec. 31, 2020. This program pays employees a pro-rated unemployment benefits for working less hours in an effort to keep employers from dropping employees from their payroll, so when COVID-19 has subsided, employers can easily ramp up operations.

For states where unemployment claims have increased rapidly, the state unemployment website may indicate that those who are unemployed need to wait to file claims. Those applying for unemployment should follow the directions on the states’ websites.