How does the Relief For Workers Act Affect Unemployment Compensation Claims?

The new act removes restrictions on eligibility for unemployment compensation,  raises the dollar benefit amount; and increases the maximum weeks for collection.

On Friday, March 27, the President signed the “Relief for Workers Affected by Coronavirus Act” (RWACA), a massive expansion of unemployment compensation (“UC”) to workers who have lost employment because of the coronavirus pandemic.  RWACA is part of the temporary emergency package of laws known as the “Coronavirus Aid, Relief, and Economic Security Act” (the CARES Act).  As RWACA passed, the public received the news of 3.28 million new unemployment filings within the preceding week.

RWACA removes restrictions on UC eligibility; raises the dollar benefit amount; and raises the number of weeks for UC collection from 26 weeks to 39 weeks. The law also envisions the need to raise the maximum benefit period beyond 39 weeks. 

RWACA is the largest expansion of UC since government-mandated unemployment compensation began in the 1930s.  Since the UC program is a combined Federal-state program, RWACA will also add to state unemployment offices’ already significant workload. 

How long does RWACA last?

RWACA is temporary.  The eligibility and payment length portions of the law sunset on December 31, 2020 and the benefit increase ends on July 31, 2020. 

Who’s eligible?

RWACA extends UC to classes of workers who were previously ineligible for UC.  The law allows self employed workers and so-called gig workers to collect UC.  Now the solo marketing consultant is just as eligible for UC as a marketing director employed by a business.  A freelance writer is equally eligible for UC as a reporter employed by a media outlet. 

RWACA also makes it clear that furloughed workers, who may be recalled after a short hiatus, may collect UC. In Pennsylvania, this was not a major change since the law has allowed furloughed workers to claim UC. 

How much are UC benefits under the new law?

Under RWACA, unemployed individuals may receive an additional $600 per week over and above state allowed benefits.  The law requires the states to pay the added benefits, followed by a federal reimbursement to the states.  Since UC benefits vary greatly between states, this increase will be most dramatic in low-benefit states such as Mississippi, where $600 per week increase will more than triple the current maximum benefit.  Even in Massachusetts, whose $800-plus weekly benefit is the nation’s highest, the new law raises the benefit by about 75%.  (Pennsylvania’s maximum benefit of $572 per week and is one of the higher maximums.)  A number of unemployed workers may receive more in UC under RWACA than their wages from past employment.  This benefit increase will only be temporary until July 31, 2020. 

How soon are benefits available under the new law?

The law makes UC available more quickly.  The law eliminates the waiting week that many states imposed.  Under the waiting week, a worker laid off on the first day of the month would begin collecting UC on the eighth of the month.  (Pennsylvania had already acted to eliminate the waiting week.) 

How will the new law affect government and nonprofit employers?

RWACA also addresses the needs of nonprofits and government employers who do not buy unemployment insurance but reimburse the state UC authorities for any UC claims.  RWACA provides that the federal government will reimburse up to 50-% of state UC payments for unemployed public and nonprofit workers, thereby reducing the private entities’ reimbursement obligations.

What key areas of UC law have not changed?

RWACA has not changed every aspect of UC law. A worker must still be able and available to work before collecting UC.  To receive UC, a worker must still show a job loss or work hour drop- mainly through layoffs or reductions in force driven by economic factors.  Those who can telework are not eligible for UC.  Nor are those on sick leave.  And workers must be out of work though no fault of their own. 

Employers may still oppose UC, and states can deny UC, when an employee has been let go for willful misconduct (generally violation of a major rule, or deliberate conduct that goes against the employer’s interests or falls below acceptable standards of employee behavior.)

In summary, RWACA’s changes are dramatic. And the workload for federal and state UC agencies will increase dramatically.  The next several weeks will see a continued flood of UC claims and an even greater need for both accuracy and patience for all participants in the UC system.

The coronavirus pandemic means news and information is constantly-changing and evolving every minute. The employment and business lawyers at High Swartz know how important it is to keep everyone informed with current and valid information during these trying times. If you have questions about the pandemic-related query relating to your job or business, please contact our employment law attorneys at 610-275-0700 or fill out our contact form.

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