Federal and State Actions Affecting Unemployment Insurance Benefits During the COVID-19 Outbreak

Governor Eric J. Holcomb has signed several executive orders (“Executive Orders”) addressing unemployment insurance (“UI”) benefits to “protect and support Hoosiers during the COVID-19 outbreak.” Full versions of the Executive Orders can be found at the following link: https://www.in.gov/gov/2384.htm.

Additionally, on March 27, 2020, President Trump signed the Coronavirus Aid, Relief, and Economic Security Act (“CARES”) to support families and businesses during the COVID-19 pandemic. Title II of CARES provides monetary relief for workers affected by COVID-19 by both increasing UI benefits and expanding eligibility.

The following is a summary of the actions set forth within the CARES and Executive Orders:

FEDERAL ACTION – CARES

Federal Pandemic Unemployment Compensation – $600 Additional Weekly Benefit

CARES provides an additional $600 per week benefit to certain employees receiving UI benefits. Under this expansion, individuals who ordinarily would qualify for unemployment compensation benefits under state law are entitled to both: (1) the regular amount of compensation available under state law, as well as (2) an additional flat-fee amount of $600 per week, which is referred as “Federal Pandemic Unemployment Compensation” (“PUC”). PUC is not charged to the employer’s UI account. The $600 benefit is effective March 29, 2020 and is payable through July 31, 2020. All benefits will be paid retroactively to March 29, 2020. In Indiana, claimants should begin receiving these PUC payments on April 20, 2020.

Pandemic Emergency Unemployment Compensation – Up to 13 More Weeks of Unemployment Compensation

Under Indiana law, workers may be entitled to up to 26 weeks of UI benefits. CARES provides an additional 13 weeks of UI benefits as Pandemic Emergency Unemployment Compensation. This generally is available for those individuals who are able to work, available to work, and are actively seeking work. Qualifying workers will also be eligible to receive the additional $600 benefit during the additional 13-week period. These benefits will be paid through the state and are federally funded.

Workers should be aware of the possible implications of receiving the additional $600 benefit. For example, the expanded benefit will count as income when determining eligibility for certain means-tested programs, including the Supplemental Nutrition Assistance Program, but not for Medicaid or the Children’s Health Insurance Program.

Temporary Full Federal Funding of the First Week of Compensable Regular Unemployment

Many states provide for a one week waiting period before UI benefits are paid. In Executive Order 20-12, Indiana waived this one-week waiting period. The Federal Government will provide the funds to pay for the first week of UI benefits.

Expanded Unemployment Eligibility

CARES expands unemployment eligibility to individuals who are able and available to work within the meaning of applicable state law but are unemployed, partially unemployed, or unable or unavailable to work. To receive benefits, the individual must self-certify that:

• the individual has been diagnosed with COVID–19 or is experiencing symptoms of COVID-19 and 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’s 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;
• 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 supporter for a household because the head of the household has died as a direct result of COVID-19;
• the individual has quit his or her job as a direct result of COVID-19; or
• the individual’s place of employment is closed as a direct result of the COVID-19 public health emergency.

CARES also expands coverage to include individuals who generally have been ineligible for unemployment benefits, including individuals who are self-employed, “gig” workers, freelancers, independent contractors, and part-time workers. New hires who could not begin their employment are also covered even if they do not have a sufficient work history to qualify under normal state unemployment eligibility rules. In addition to being eligible for UI benefits, these individuals will also be eligible for the $600 weekly benefits. In Indiana, the Indiana DWD Commissioner stated that the $600 payments are expected to take longer than April 20 to be paid to expanded coverage claimants.

Individuals who can telework with pay or who are receiving paid sick leave or other paid benefits, including paid leave under the Families First Coronavirus Response Act (FFCRA), are not eligible for unemployment compensation under CARES.

Temporary Financing of Short-Time Compensation Payments

CARES provides for temporary federal financing of short-time compensation programs, also known as work-share plans. A short-time compensation program allows qualified employers to reduce work hours rather than laying off employees, and such employees receive unemployment compensation benefits that are pro-rated for the partial workweek reduction. Employers who implement a short-time compensation program may be eligible for 50% federal funding of UI benefits paid under the program. Funded benefits under this component are capped at 26 weeks. Seasonal, temporary, and intermittently employed employees are not eligible to participate.

STATE ACTION – EXECUTIVE ORDERS

Executive Order 20-12

• The state suspended the one week waiting period before paying unemployment benefits to claimants as required by Indiana Code section 22-4-14-4. This suspension is retroactive to March 8, 2020.

Executive Order 20-05

• The DWD, consistent with federal law, will interpret Indiana’s unemployment laws to the broadest extent possible to cover employees who are out of work because of COVID-19.
• Benefits will be paid to individuals who file their initial unemployment claims late.
• The DWD will allow individuals to continue to accrue unemployment eligibility if they take work leave because of COVID-19.
• For employers, DWD will not assess certain experience rate penalties because of employees who receive unemployment benefits because of COVID-19.

During Governor Holcomb’s April 6 news conference, Indiana’s DWD Commissioner stated that Indiana has opted in on all federal legislation (including CARES) to expedite UI benefits to Indiana claimants. The DWD has issued an Employer Frequently Asked Questions for COVID-19 Work-related Issues, which can be found here. The following are highlights from the DWD’s guidance:

• If an employer must lay off or furlough employees due to COVID-19, the employees will be eligible for unemployment insurance benefits if they have earned enough wages to set up a claim and meet the weekly eligibility criteria. For more information on eligibility, see www.in.gov/dwd/files/Claimant_Handbook.pdf.
• If employees’ hours are reduced but they remain employed, they may be eligible for unemployment benefits. Part-time employment during the week claimed will reduce the amount of benefits paid for that week.

We will continue to update you about this and other major federal and state measures addressing the ever-developing COVID-19 pandemic. For additional information on this or any related topic, please contact McNeelyLaw’s attorneys by visiting www.mcneelylaw.com or calling our office at 317-825-5110.

This McNeelyLaw LLP publication should not be construed as legal advice or legal opinion on any specific facts or circumstances. The contents are intended for general informational purposes only, and you are urged to consult your own lawyer on any specific legal questions you may have concerning your situation.