Due to the effects of the COVID-19 pandemic, many employees became eligible for full or partial unemployment benefits. The Coronavirus Aid, Relief, and Economic Security (CARES) Act was introduced to help those affected by the virus through December 31, 2020, and expanded the traditional reasons to qualify for unemployment benefits. The Consolidated Appropriations Act, 2021 extended the availability of unemployment compensation through March 14, 2021.
The Consolidated Appropriations Act
The CARES Act changed normal unemployment compensation by increasing monetary payments and extending the number of weeks individuals could be eligible for unemployment compensation. It also included previously excluded groups, such as independent contractors and individuals without sufficient employment histories.
On December 21, 2020, Congress passed the Consolidated Appropriations Act, 2021 that was signed into law on December 27. This was the largest bill ever passed by Congress when it comes to length and amount of money appropriated.
The appropriations bill covers a lot of provisions, including a section called the Continued Assistance for Unemployment Workers Act of 2020 (Continued Assistance Act), which extends and slightly expands coronavirus relief for unemployed workers.Use this detailed unemployment claims administration guide to get advice on every aspect of employment law compliance, and ensure paying the right amount in taxes and fees.
The CARES Act vs. the Continued Assistance Act
The CARES Act created three new unemployment compensation programs:
- Pandemic Unemployment Assistance (PUA) extended unemployment benefits to certain workers traditionally not eligible for unemployment benefits under state law, such as those who self-employed workers, independent contractors, or workers who have a limited work history,
- Federal Pandemic Unemployment Compensation (FPUC) provided an extra $600 weekly benefit for all weeks of unemployment between April 5, 2020, and July 31, 2020, in addition to the benefit amount an individual would otherwise be entitled to receive under state law, and
- Pandemic Emergency Unemployment Compensation (PEUC) provided for an additional 13 weeks of unemployment benefits for individuals who had exhausted unemployment benefits otherwise available under state law.
The Continued Assistance Act reinstates FPUC, which now provides a $300 payment for up to 10 weeks between December 26, 2020, and March 14, 2021. This supplemental payment, like the original $600 payment available under the CARES Act, is available to any individual who receives at least $1 of state unemployment benefits.
The Act also increases the duration and availability of both PEUC and PUA through April 5, 2021, though no new applicants will be eligible for weeks after March 14, 2021. Individuals who are already receiving PEUC and PUA who have not yet exhausted their entitlement under these programs will remain eligible for benefits through April 11, 2021.
In addition to this, the Continued Assistance Act increases the maximum total benefits from 39 weeks to 50 weeks. The additional 11 weeks of benefits are collectible only for weeks of unemployment on or after December 27, 2020. Therefore, claimants may not request unemployment compensation if they had any benefit-free weeks due to exhausting available benefits prior to the passage of the Continued Assistance Act.Find out how to achieve significant administrative cost savings and prevent overpayments with UI SIDES or SIDES E-Response.
Mixed Earners Unemployment Compensation
The Continued Assistance Act also creates a new program for Mixed Earners Unemployment Compensation (MEUC). The MEUC program is an optional $100 per week supplement to FPUC for individuals who:
- have received at least $5,000 of self-employment income in the most recent taxable year,
- are receiving a form of unemployment compensation other than Pandemic Unemployment Assistance, and
- submit documentation substantiating the claimed self-employment income.
MEUC payments are available for weeks of unemployment between December 27, 2020, and March 14, 2021.
Mechanisms for Prevention of Unemployment Compensation Fraud
Taking into consideration criticisms regarding expanded unemployment benefits, such as that they encourage fraud and disincentivize employees from returning to work, the Continuing Assistance Act introduces certification requirements and fraud prevention mechanisms. Specifically, the Act requires:
- new applicants for Pandemic Employment Assistance to provide documentation to substantiate their qualifying employment or self-employment, as opposed to self-certification,
- states to implement procedures to verify the identities of applicants,
- states to implement a method for employers to report instances in which unemployment compensation claimants refuse to return to work or to accept an offer of suitable work without good cause, and
- states to notify unemployment compensation claimants of the state’s return to work laws and of their right to refuse work that poses a risk to the claimant’s health or safety.
Monitoring Unemployment Compensation Developments
The Continued Assistance Act generally extends the benefits created by the CARES Act while introducing new tools to help states combat fraud or false certifications by claimants. It is possible that there will be additional federal guidance aimed to address the implementation of these unemployment provisions and answer certain questions the states may have. Therefore, employers should monitor state websites for any applicable unemployment programs and up-to-date guidance.
Furthermore, to ensure effective management of unemployment compensation claims and prevent any additional costs, employers can outsource unemployment claims management. This provides them with the expertise and resources every business needs to successfully and efficiently deal with unemployment claims in the cheapest way possible without having to monitor all of the state’s unemployment regulations and procedures.