The New World of Unemployment Compensation & Shared Work Under CARES ACT

As if the pandemic weren’t disorienting enough, the rules and guidance surrounding unemployment compensation feels as if it keeps changing too.

While that’s not entirely accurate — Connecticut’s rules are basically unchanged though some of the application of those rules have been tweaked — the new CARES Act has added a layer of complexity that we are only now beginning to sort out.

Add to that new guidance released Saturday evening (here) and even more new guidance released by the Department of Labor on Sunday evening, and that’s when things have gotten messy.

I can’t recap everything in a single blog post but my partner Peter Murphy has some additional guidance on this issue as well in a post today.  

For Connecticut employers, your first resource must be the CTDOL FAQ that I’ve highlighted before.  

For unemployment related to layoffs and terminations, the rules are still relatively straightforward.  Employees should be eligible to receive their typical state law benefit (up to $649/week in Connecticut).  The CARES Act will add a flat $600 a week on top of that. Thus, if you do the math, it may be possible that an employee who was making less than approximately $65,000/year may end up making more in unemployment for a short while.  This was part of a compromise by Congress. No one should be complaining given the high unemployment rates.

For indepedent contractors and some gig economy workers including Uber drivers, these workers traditionally were not eligible for unemployment compensation. The CARES Act provides for a new unemployment compensation payment of $600 for these workers too. According to Sunday night’s guidance:

The Secretary has determined that … an individual who works as an independent contractor with reportable income may also qualify for PUA benefits if he or she is unemployed, partially employed, or unable or unavailable to work because the COVID-19 public health emergency has severely limited his or her ability to continue performing his or her customary work activities, and has thereby forced the individual to suspend such activities.

Drivers “may still qualify for PUA benefits if he or she has been forced to suspend operations as a direct result of the COVID19 public health emergency, such as if an emergency state or municipal order restricting movement makes continued operations unsustainable.”

For those who have been partially furloughed (such as working 50 percent), in many states like Connecticut, unemployment compensation is also available, typically on a pro rated basis.  And, according to the new USDOL guidance, the additional $600 payment will be available as well and won’t be pro-rated.  As my colleague Peter Murphy indicated,

The weekly $600 payment is available to any claimant receiving benefits, whether those are regular unemployment compensation benefits under state law or new benefits created by the CARES Act.

The $600 is not prorated based on an individual’s benefit rate. Instead, if a claimant receives “at least one dollar ($1) of underlying benefits for the claimed week, the claimant will receive the full $600 FPUC.”

For those companies exploring the Shared Work program, employees who have their hours reduced, receive slightly increased unemployment compensation benefits from the state for this program.  I’ve talked about this program extensively here.  The new DOL guidance clarifies that the weekly $600 payment from the CARES Act is also available to any claimant who is receiving benefits through Connecticut’s Shared Work program based on a reduction in their hours.

I’ll have more on the Shared Work program, including some of the pitfalls for employers. in a post later this week.

Employers that are considering layoffs should understand the ramifications of their decisions; the unemployment compensation programs from the state are just one part of that so be sure to consult with your counsel about how to make sure you down run afoul of any other laws as well.

The post The New World of Unemployment Compensation & Shared Work Under CARES ACT appeared first on Connecticut Employment Law Blog.