As states have worked to process the millions of unemployment claims arising out of the pandemic, many questions have arisen about who is eligible for the federal Pandemic Unemployment Assistance (PUA) benefit under the CARES Act.  The Department of Labor’s most recent guidance attempts to answer many of these questions posed by the states and may be helpful to employers considering furloughs or layoffs.

As we previously discussed, the Coronavirus Aid, Relief, and Economic Security Act of 2020 (the CARES Act) creates several overlapping programs that temporarily enhance state unemployment benefits for workers affected by the COVID-19 pandemic.  Since its enactment, the U.S. Department of Labor’s Employment and Training Administration (“ETA”) has issued a number of guidance letters in an attempt to clarify the unemployment provisions of the Act.   On April 27, ETA issued additional guidance to state unemployment agencies that are continuing to struggle with the logistical challenges of implementing the federal PUA program under section 2102 of the Act.

The PUA was designed to be a benefit of last resort for anyone who does not qualify for other unemployment compensation programs, and who would be able and available to work but for one or more of ten COVID-19 related reasons.  There has been significant confusion about the eligibility criteria for the PUA, however, which ETA’s most recent guidance attempts to address. Specifically, the questions to which this updated guidance offers answers came from a webinar that ETA conducted with the states.

Employers who are analyzing the repercussions of layoffs and furloughs may be interested in some of the information addressed in this updated PUA guidance.

Eligibility

The updated guidance clarifies that those individuals who choose not to go to work due to general concerns about exposure to COVID-19, but who do not meet any of the other COVID-related criteria, are not eligible for PUA. Similarly, an individual who is able and available to work, but refuses to take a job offer or return from a furlough, absent one of the COVID-19-related criteria, will not be eligible for PUA.  The state agencies are responsible for collecting self-certifications from applicants stating that they cannot work for a COVID-related reason, and for following up with fraud investigations if warranted after the fact.

According to the guidance, independent contractors who experience a significant diminution of work as a result of COVID-19 are eligible for PUA benefits, even if they still have some income.  Ride-sharing drivers (Lyft, Uber, etc.) could fall into this category.

Likewise, Peace Corps and Americorps volunteers whose sites are closed down as a direct result of COVID-19 are eligible for PUA benefits, as are full-time students who worked part-time, but became unemployed or underemployed due to COVID-19.  People on an approved, unpaid medical leave, however, will not be eligible for PUA benefits unless the leave is for one of the COVID-19 reasons listed in the PUA.

The PUA covers workers who must remain home with children because of COVID-related school closures. But, what happens in the summer?  The guidance provides that, once the regular 2019-2020 school year is over, parents should rely on their “customary summer arrangements” for caring for their children and would not qualify for PUA benefits on this basis.  However, if the family relies on a facility for summer care and that facility is closed due to the COVID-19 health emergency, workers still may be eligible for PUA benefits.

Work Search Requirements

Although the search-for-work requirements are not waived under the PUA, states are encouraged to use the “emergency flexibility” authorized in previous guidance to temporarily modify or suspend work search requirements if the individual is unable to search for work because of a COVID-related reason. Almost every state has acted to suspend work search requirements for a period of time, but whether states will continue to do so through the end of the year – which is when the PUA expires – is an open question.

Certification

The administrative burdens facing state workforce agencies in connection with the CARES program are significant.  The PUA requires applicants to self-certify that they are unemployed, partially unemployed, or unable or unavailable to work because of a COVID-19-related reason, and the state agency must accept this certification with a warning about the repercussions of fraudulent representations.  The agency is responsible for investigating cases of fraud.

The PUA does not require applicants to provide proof of employment or self-employment to qualify for this program, nor must they prove a minimum amount of earnings to qualify. The PUA looks to calendar year 2019 as the “base period” for an applicant’s prior earnings, and applicants can provide a variety of documentation to establish those earnings, including income tax returns, paycheck stubs, and bank receipts. If an applicant cannot produce any such records, he or she will receive the PUA’s minimum weekly benefit amount, which is calculated according to Department of Labor’s records of the state’s average weekly payment of regular compensation. Those statistics are maintained for purposes of the federal Disaster Unemployment Assistance program.

In contrast to certification of COVID-related conditions, applicants cannot self-certify that they are ineligible for other unemployment benefits (either those provided by the state or those under the PEUC, Section 2107 of CARES Act).  The state agencies must make this determination on a quarterly basis as part of administering PUA claims.

State workforce agencies also are charged with the responsibility of reviewing their records of claims going back to January 27, 2020 in order to identify individuals who potentially are eligible for PUA.  They must then provide those individuals with written notification of their eligibility. In addition to the well-publicized claims backlogs in most states, this review obligation places another administrative burden on state unemployment agencies.