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Coronavirus Relief Bill: Supplemental Unemployment Insurance from the Federal Government

The CARES (Coronavirus Aid, Relief, and Economic Security) Act, signed on March 27, 2020, by President Trump, contains key provisions that expand the types of workers eligible for a new supplemental Unemployment Insurance compensation program. The amount payable under this program is $600 per week for a period of four months.

There are three key provisions relating to the Unemployment Insurance component of this bill:

  1. Expands eligibility for the $600 weekly amount to include those who previously were ineligible – including the self-employed, independent contracts, and “gig” workers who don’t receive W-2s.
  2. For workers who are eligible for State Unemployment Compensation (generally those who receive wages and a W-2), the $600 weekly amount will be paid in addition to State benefits.
  3. Provides for an additional 13 weeks of State Unemployment Compensation benefits. For IN, KY, and OH this extended the period from 26 weeks to 39 weeks.

What is the difference between State Unemployment Insurance and the new Supplemental Federal Unemployment Insurance?

Each state has its own guidelines and processes, but generally, State benefits are only paid to workers who were paid wages as employees and subject to payroll withholding.

By contrast, the Federal supplemental benefits will be offered both to those who:

  • qualify for State benefits as paid employees, and
  • work but are not considered employees, such as the self-employed, independent contracts, and “gig” workers.

How do I apply for the Federal Supplemental benefit?

If you are paid as an employee, recently lost your job due to COVID-19, and are eligible for State Unemployment Insurance benefits, you will automatically receive the Federal Supplemental amount in addition to the State amounts.

If you are self-employed, an independent contractor, or a “gig” worker, you will apply on your state’s Workforce Development website just like you are applying for State benefits. However, for these workers, it is possible you won’t be able to complete your application or that it may be initially rejected.

States received guidance from the Federal government on April 5, 2020, on how to administer the Federal Supplemental program for non-W-2 workers and are working around the clock to update their websites to process claims for this pool of newly eligible workers.  You should still apply as soon as possible and keep documentation of your application date.

When will I start receiving the Federal Supplement benefit?

Per guidance from the U.S. Department of Labor, the $600 Federal weekly benefit will be retroactive to your eligibility date or March 28, whichever is later. The benefits will be paid until July 31, 2020, if you do not return to work before then.

If you are a W-2 paid employee and have applied prior to March 28, it is possible you already started receiving this Federal benefit or soon will, depending on your state.

If you are self-employed, an independent contractor, or “gig” worker, it will depend on when your state’s Workforce Development website is updated to process & approve claims for non-W-2 workers. Note that significant resources are being allocated by all states to streamline this process as there is an overwhelming need for these benefits.

To the extent there is a delay between your application and when you begin receiving benefits, you will receive amounts retroactive to your eligibility date with your first benefit payment.  For example, if you were eligible as of March 28, but don’t receive your first benefit payment until later in April, that first benefit payment will include all weekly benefit amounts dating back to March 28.

Do the circumstances under which I’m not able to work matter?

The short answer is yes – but the guidance provided covers nearly every scenario other than someone who was able to safely continue working but quit or stopped working for no reasonable reason.

Below is a list of the specific allowable scenarios to receive benefits:

  • An individual’s place of employment closed as a direct result of COVID-19;
  • An individual is unable to reach their place of employment due to an imposed quarantine or was advised by a medical provider to self-quarantine due to COVID-19;
  • An individual is the primary caregiver of a child or household member who is unable to attend school or another facility that is closed due to COVID-19;
  • An individual was scheduled to commence new employment and does not have a job or cannot reach the job as a direct result of COVID-19;
  • An individual has been diagnosed with COVID-19 or is experiencing COVID-19 symptoms and seeking diagnosis;
  • A member of the individual’s household has been diagnosed with COVID-19;
  • An individual is caring for a family or household member diagnosed with COVID-19;
  • An individual became the breadwinner or major support for a household because the head of the household died from COVID-19;
  • An individual has to quit a job as a direct result of COVID-19. 

If I’m not an Employee who has payroll taxes withheld, what type of documentation do I need to provide with my application to provide my work history?

The Federal government has not included a specific set of criteria, but based on information communicated by various states, some allowable documentation would include a Business Lease, a Business License, a Business Contract with income/revenue details, 1099s you have received, and/or Tax returns such as Income Tax, Sales Tax, or Property Tax returns.

Stay Tuned

These are challenging and unprecedented times. Blue & Co. is committed to walking with our clients through this crisis and providing as much information as we can. Please note that information is changing rapidly. Always consult our website for the most recent information. If you have questions, please contact us.

Please continue to monitor our Coronavirus Resources and Information Page for updates.

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