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Department of Labor Provides Further Guidance Regarding Unemployment Under the CARES Act Department of Labor Provides Further Guidance Regarding Unemployment Under the CARES Act

Department of Labor Provides Further Guidance Regarding Unemployment Under the CARES Act

The U.S. Department of Labor (“DOL”) provided additional guidance related to the massive expansion to unemployment benefits under the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act. The DOL guidance was made available to the general public (available here), along with frequently asked questions (available here), program letters (available here), and fact sheets (available here).

In sifting through the DOL’s literature, including the DOL’s FAQs, a few things are worth noting and reinforcing:
  • As of March 28, 2020, each and every state has entered into an agreement with the DOL to implement the expanded unemployment benefits, and the CARES Act’s $26 million appropriation to the Office of the Inspector General will work to ensure that states adhere to the federal government’s intentions. States have assured their constituents they are working quickly with their information technology teams to adapt their systems and that benefits will be retroactive, including the $600 additional weekly federal benefit.
  • Also confirmed in the DOL’s most recent guidance, an individual who voluntarily resigns from employment or refuses to work simply because of a general concern about exposure to COVID-19 is not eligible to collect unemployment benefits. Rather, the DOL has clarified that there must be a credible health concern tied to the individual’s decision to quit his or her job, such as complications resulting from an earlier COVID-19 diagnosis that now render the individual unable to perform the essential functions of his or her job.
  • Unemployment compensation is only available to parents and guardians who are entirely unable to work, including telework, due to their obligations to provide ongoing and constant care for a child. The DOL cautions parents and guardians against certifying they are unable to work, including telework, where the child is capable of caring for themselves for much of the day. Further, the DOL has reminded parents and guardians that unemployment eligibility based on a school closure that is a direct result of COVID-19 ceases to exist after the date the school year was initially scheduled to end. In other words, if your child’s summer break was scheduled to commence on June 1, 2020, your last date of unemployment compensation eligibility is necessarily May 31, 2020, assuming, of course, the absence of some other qualifying circumstance.
  • Yes, gig workers, such as Uber, Lyft, and DoorDash drivers, are likely eligible for unemployment compensation. For example, a ride-share driver who has been forced to suspend or severely reduce his or her operation as a result of a state or local stay-at-home order may qualify for benefits under Section 2102 of the CARES Act.
  • One criticism of the CARES Act is that the expanded and increased benefits will incentivize many individuals to remain on unemployment considering some may earn more money while furloughed when factoring in the $600 of additional federal benefit. However, the DOL has made it clear—a furloughed employee who has been recalled to work must return to work or forfeit his or her unemployment benefits, provided, of course, the individual is not unable to work for another qualifying reason. In other words, refusing to return to work in order to access unemployment compensation will result in ineligibility. An employer who has concerns about an individual’s circumstances for collecting unemployment is encouraged to contact its respective state unemployment agency.
  • Individuals who are working a reduced schedule or receiving paid leave benefits for less than their customary weekly earnings may be eligible and are encouraged to apply for unemployment compensation benefits. Assuming the individual’s reduced earnings are less than his or her statutory entitlement to unemployment compensation, he or she is likely to receive the difference between the entitlement and the reduced earnings plus the $600 weekly federal unemployment benefit.

The DOL’s additional guidance is certainly welcome, and while many questions remain, the DOL assures us it is working to provide guidance on an ongoing basis. Individuals and employers, alike, are encouraged to consult with their legal counsel on questions about the CARES Act, and Ice Miller is here to help.

This publication is intended for general information purposes only and does not and is not intended to constitute legal advice. The reader should consult with legal counsel to determine how laws or decisions discussed herein apply to the reader’s specific circumstances.

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