April 11, 2020 The CARES Act: Three New Unemployment Programs for California Employees

The new CARES Act creates three new unemployment programs: Pandemic Unemployment Compensation (“PUC”), Pandemic Unemployment Assistance (“PUA”), and Pandemic Emergency Unemployment Compensation (“PEUC”). Each of these programs provides different coverage and has different eligibility requirements. All three are funded by the federal government, but must be adopted and administered by the states. As a result, the benefits are paid to individuals by the state.

The Employment Development Department (“EDD”) is responsible for administering California’s unemployment compensation program. It has indicated it is working to implement all three CARES Act programs, but has not released implementation details. 

Highlights of each new unemployment program are provided below.

Pandemic Unemployment Compensation

The PUC program provides an extra $600 per week for individuals who already qualify for state unemployment compensation. These individuals will now receive the amount paid under state law, plus an additional $600 per week (funded by the CARES Act) until July 31, 2020.

Pandemic Emergency Unemployment Compensation

The PEUC program provides an extended benefit period to individuals who have exhausted their unemployment benefits under existing state or federal law, have no right to regular unemployment under any state law or other compensation under any federal law, and are not receiving unemployment compensation from Canada. The difference between PEUC and PUA (described below) is that the PEUC essentially extends benefits by up to 13 weeks for individuals otherwise qualified to receive regular unemployment, but who have exhausted those benefits.

To be eligible, individuals must be able to work, available for work, and actively seeking work. However, states must be flexible when applying the “actively seeking work” requirement if individuals are unable to search for work due to COVID-19, including because of illness, quarantine, or movement restrictions.

Pandemic Unemployment Assistance

The PUA program is designed to provide unemployment compensation to individuals who would not ordinarily qualify for unemployment. Such individuals include:

  • Independent contractors (including gig workers);
  • Self-employed individuals;
  • Individuals who are seeking part-time work;
  • Individuals who lack sufficient work history to ordinarily qualify for unemployment; and
  • Individuals who have exhausted all other rights to state or federal unemployment (including PEUC).

Such individuals must self-certify that they meet one of the following criteria:

  • The individual is diagnosed with COVID–19 or is experiencing symptoms of COVID–19 and is seeking a medical diagnosis;
  • A member of the individual’s household has been diagnosed with COVID–19;
  • The individual is providing care for a family member or a member of the individual’s household who has been diagnosed with COVID–19;
  • A child or other person in the household for which the individual has primary caregiving responsibility is unable to attend school or another facility that is closed as a direct result of the COVID–19 public health emergency and such school or facility care is required for the individual to work;
  • The individual is unable to reach the place of employment because of a quarantine imposed as a direct result of the COVID–19 public health emergency (including California’s stay at home order);
  • The individual is unable to reach the place of employment because the individual has been advised by a health care provider to self-quarantine due to concerns related to COVID–19;
  • The individual was scheduled to commence employment and does not have a job or is unable to reach the job as a direct result of the COVID–19 public health emergency;
  • The individual has become the breadwinner or major support for a household because the head of the household has died as a direct result of COVID–19;
  • The individual has to quit his or her job as a direct result of COVID–19;
  • The individual’s place of employment is closed as a direct result of the COVID–19 public health emergency; or
  • The individual meets any additional criteria established by the Secretary of Labor for unemployment assistance under this section.

Individuals must certify that they are able to work and are available for work, but cannot work (or can work only part time) due to one of the foregoing reasons. Individuals do not qualify for PUA if they have the ability to telework with pay, or are receiving paid sick leave or other paid leave benefits. 

Qualifying individuals can receive up to 39 weeks of benefits for weeks of unemployment between January 27, 2020 and December 31, 2020. The amount of the benefit is the weekly state benefit, plus the $600 per week federal benefit (however, the federal benefit ends on July 31, 2020).

Frequently Asked Questions

1.   Does the one week waiting period before individuals can receive unemployment compensation still apply? 

California waived the one week waiting period for individuals who are unemployed due to COVID-19, so such individuals can start receiving unemployment payments immediately.

2.   Can an individual obtain partial unemployment if their hours have been reduced?

Potentially. California unemployment insurance provides partial wage replacement benefit payments to workers who have their hours reduced through no fault of their own.

3.   If an individual obtains partial unemployment because their hours have been reduced, is the $600 federal benefit prorated or reduced? 

Individuals who receive any amount of unemployment under California law will receive the full $600 per week federal payment.

4.   What if an individual has already received their 26 weeks of California unemployment compensation? 

An individual who has exhausted California’s unemployment benefits may be eligible for an additional 13 weeks of unemployment compensation under the PEUC program. 

5.   What if an individual has already received their 26 weeks of California unemployment compensation and has also exhausted their unemployment under the PEUC program? 

They may be eligible for an additional unemployment compensation under the PUA program if they meet the requirements of that program. 

6.   What if the amount of state unemployment, plus the $600 per week federal benefit, is more than an employee earned while working? Is the amount capped at their prior earnings?

No, the amount is not capped. Individuals can theoretically earn more from unemployment than they made while working.

7.   Can independent contractors or self-employed individuals whose work has been impacted by COVID-19 obtain unemployment?

Yes. The PUA program provides benefits to independent contractors or self-employed individuals if they meet the other requirements of that program. This includes individuals who are partially unemployed as a result of one of the COVID-19 scenarios described above.

What This Means

The CARES Act is a massive stimulus program designed to infuse money into the economy. It significantly expands the type of workers who can receive unemployment benefits and the amount of those benefits. Employers should be aware of the enhanced unemployment benefits provided by the CARES Act when making decisions regarding layoffs, furloughs, or reduced hours for their employees. Employers should also consider informing their employees about the enhanced unemployment benefits available under the CARES Act.

AUTHORS
Paul Batcher   Corrie Klekowski   Fred Plevin   Mike Sullivan