CARES Expands Unemployment Benefits in Several Ways

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Nora L. Olsewski

March 30, 2020

The Coronavirus Aid, Relief, and Economic Security (CARES) Act, signed into law on March 27, 2020, greatly expands unemployment insurance nationwide. The new law comes as unemployment claims rose to a record 3.3 million last week and are expected to continue to grow throughout April. The hallmarks of the new law include an increase in benefits that claimants will receive during their first four months of unemployment, as well as benefits eligibility, for the first time, for self-employed and contract workers.

Unemployment insurance is administered by the states. Each state has its own application process and rate at which recipients are compensated. The length of time a claimant can collect unemployment and the amount of compensation that they are eligible to receive varies widely from state to state. A majority of states, including Pennsylvania and New Jersey, allow recipients to collect benefits for up to 26 weeks. The average weekly compensation rate ranges from 20% to 50% of a claimant’s average weekly wage. Each state also sets weekly maximums or caps on the amount a claimant can receive, that apply no matter how high the claimant’s average weekly wage may be.

The CARES Act increases unemployment insurance by $600 per week, for each recipient, for a period of 13 weeks. Once the state has determined a claimant is eligible for unemployment compensation, the claimant will receive two payments: (1) a payment from the state equal to their weekly benefit rate, as determined by the state; and (2) the federal contribution payment of $600 per week for the first 13 weeks. The state must provide these monies to recipients at the same time and in the same manner, but can separate the monies into two distinct payments.

The law also revived the Emergency Unemployment Compensation Program, which provides recipients with 13 weeks of unemployment compensation in addition to each state’s standard benefit period. Therefore, the benefit period in most states is now 39 weeks. Additionally, while benefits are not typically provided to recipients during their first week of unemployment, widely known as the “waiting period,” the CARES Act requests that states waive this period and begin paying recipients their full weekly benefits immediately. Most states have also waived the requirement that recipients actively look for work during the pandemic.

Finally, the CARES Act creates a new program, Pandemic Unemployment Assistance for persons who are self-employed, part-time, or contract workers; and those who do not have sufficient work history; persons who have exhausted their right to regular unemployment benefits; or persons who would not otherwise qualify for regular unemployment or extended benefits under state or federal law. To receive benefits, these individuals must certify that they are available for work, but are unemployed, partially unemployed, or unable to work because:

    • They have been diagnosed with COVID-19 or are experiencing symptoms of COVID-19.
    • A member of their household has been diagnosed with COVID-19.
    • They are providing care for a family member or member of their household who has been diagnosed with COVID-19.
    • They are providing care for a child in their household that is unable to attend school as a direct result of the COVID-19 public health emergency.
    • They are unable to attend work due to a quarantine imposed as a direct result of the COVID-19 public health emergency.
    • They are unable to attend work because a health care provider advised that they self-quarantine due to concerns related to COVID-19.
    • They were scheduled to commence employment but were unable to do so as a direct result of the COVID-19 public health emergency.
    • They have become the breadwinner for a household due to the death of the head of household as a direct result of COVID-19.
    • They had to quit their job as a direct result of COVID-19.
    • Their place of employment closed as a direct result of the COVID-19 public health emergency.

Individuals with the ability to telework with pay or those receiving paid sick leave or other paid leave benefits are not eligible to receive assistance under the Act.


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