The CARES Act, passed on March 27th, affects employment through its extraordinary effect on Unemployment Compensation. The new law is “Phase 3” of Congress’s overall Coronavirus response, following first, an $8.3B act funding research and development of a vaccine, and second, the Families First Coronavirus Response Act (“FFCRA”), which totals about $104B to bolster funding for among other things, paid sick leave, and expansion of the Family Medical Leave Act for employees of concerns with under 500 US employees.
The CARES Act should inject about $ 2 trillion into the economy, much through small business loans designed to help preserve jobs. Under some circumstances portions of these loans will turn into grants if the borrowing organization maintains most or all of its workforce. Some borrowers may need to pledge to remain neutral in any union organizing efforts undertaken in their workforces in order to obtain one of these loans.
Probably the biggest CARES employment impact is in the Unemployment Compensation area. “Pandemic Unemployment Assistance” (PUA), will provide up to 39 weeks of benefits for full or partial weeks of unemployment or inability to work caused by COVID-19. These benefits start retroactively on January 27, 2020 and end on December 31, 2020. PUA also eliminates the usual ability to work requirement where it is not met due to specific COVID-19 related circumstances.
The Pandemic Unemployment Compensation (PUC) compensation program will provide both individuals who regularly qualify for unemployment benefits and those who qualify for PUA an additional $600 per week from March 29 until July 31, 2020. Employees are entitled to this amount even if that amount brings them above their pre-unemployment earnings level.
“Pandemic Emergency Unemployment Compensation” (PEUC) provides an additional 13 weeks of benefits to workers who have exhausted their State Unemployment Compensation benefits (26 weeks in CT).
All told these 3 parts of the CARES legislation vastly expand the universe of workers eligible for Unemployment Compensation by seeking to cover anyone who loses paid work due to the COVID-19 virus. CARES also grants unemployment insurance to independent contractors and Gig economy workers for the first time. Even persons who were to start a job that was cancelled because of the current health emergency can take advantage of the new unemployment compensation insurance provisions.
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