April 2, 2020
CARES Act: How It Impacts Unemployment Benefits
Posted by Tasha Clark
Part of the Coronavirus Aid, Relief and Economic Security (CARES) Act that was signed into law on March 27, 2020, includes an increase in unemployment benefits for impacted employees. The CARES Act will allow impacted employees to receive an additional $600 per week in unemployment benefits in addition to their state unemployment benefits. This additional benefit will last for approximately four months and will expire on July 31, 2020.
For example, a worker in California who recently lost their job due to COVID-19 is eligible for a maximum of $450 in California state unemployment. This individual will also receive an additional $600 in federal unemployment for a total weekly amount of $1,050 (for 13 weeks or through July 31,whichever comes first).
Unemployment eligibility was also expanded to include the below situations (if the employee can show proper documentation):
- The individual was diagnosed with COVID-19 or is experiencing symptoms
- A member of the individual’s household was diagnosed with COVID-19
- The individual must provide care for a family member who has been diagnosed
- The individual is the primary caregiver to a child or person in the household who is unable to attend school as a direct result of COVID-19
- A quarantine was imposed as a direct result of COVID-19, causing the individual’s place of employment to close
- A health care provider advised the individual to self-quarantine
- The individual has become a major supporter for the household because the head of household died as a direct result of the virus
- The individual quits their job as a direct result of COVID-19
The CARES Act also expanded the categories of eligible individuals, many of whom have been ineligible in the past for unemployment benefits, to include self-employed, freelancers, independent contractors and part-time workers.
Another aspect of the expansion is the total number of weeks that an individual can claim unemployment. Most states allow for 26 weeks of benefits. Combined with the additional federal unemployment benefit of 13 weeks, an employee may have access to unemployment for 39 weeks. Some clarification is still needed on how to get the full 39 weeks of benefits and we will update you as we learn more.
Although the CARES Act did open eligibility beyond the typical unemployment guidelines, there are still some employees who continue to be ineligible and those include:
- Those who can work from home with pay
- Those who are receiving paid leave from their employer or under a federal, state, or local law
- New entrants into the workforce who cannot find work
The goal of the additional $600 in unemployment is to provide as close to 100% of the worker’s normal weekly wage as possible. However, in some situations an employee may be making more on unemployment than while working. Take the example given above — if that individual was making $900 weekly previously, they will be making $250 more on unemployment.
For the latest regulatory updates and more information on keeping your business running through disruption, visit our COVID-19 Resource Center.
Tasha contributes as a Manager in Armanino’s HR Outsourcing Consulting practice. Tasha brings 15 years of experience in payroll. She has worked extensively with labor unions in the construction business as well as payroll state taxes. She earned her MBA and Bachelor of Business Administration in Human Resources and Accounting from Boise State University. Prior to joining Armanino, Tasha worked as a Payroll Manager for AECOM, an engineering firm.