Title II – Assistance for American Workers, Families, and Businesses, Subtitle A – Unemployment Insurance Provisions

Early in the morning on Thursday, March 26, 2020, the Senate passed the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”).  On Friday, March 27, 2020, the House of Representatives also passed the CARES Act and President Trump quickly signed it into law the same day.

In this continuing series of blogs by lawyers at Forrest Firm, P.C., we will examine the most important, relevant, and impactful provisions of the CARES Act.  Our goal is not to provide you with a granular level examination of each provision of the CARES Act, but rather to provide a macro view of the CARES Act in clear, concise, and understandable language that will enable readers to move forward with their businesses and lives with confidence.  These are trying times, and here at Forrest Firm we want these articles to support our clients, positively impact our communities, and be available to help you with questions and concerns raised by the CARES Act.

This part of the CARES Act, titled the “Relief for Workers Affected by Coronavirus Act,” creates a series of provisions to provide unemployment assistance to individuals.  

Pandemic Unemployment Assistance Program.  Section 2102 of the CARES Act creates a temporary Pandemic Unemployment Assistance program to provide up to of 39 weeks of payments, beginning on January 27, 2020 and ending on December 31, 2020, by States to certain self-employed, independent contractors, and individuals with limited work history who are unable to work as a direct result of the Coronavirus.

Repayment of Unemployment Benefits to Nonprofit Organizations.  Section 2103 of the CARES Act provides payment to states to reimburse nonprofit organizations for 50% of the costs they incur from March 13, 2020 through December 31, 2020 to pay unemployment benefits.  Keep in mind that this provision does not apply to all nonprofit organizations or protect all newly unemployed nonprofit professionals –only nonprofit organizations that pay into their state unemployment fund are required to pay unemployment benefits and only nonprofit organizations that pay into their state unemployment fund will receive relief under this provision of the CARES Act.

Increase in Unemployment Benefits.  Section 2104 of the CARES Act provides a $600.00 per week increase in unemployment benefit compensation or Pandemic Unemployment Assistance through July 31, 2020.

Payment of Week One Unemployment Benefits.  Section 2105 of the CARES Act provides funding for States to pay the first week of unemployment benefits to individuals, through December 31, 2020, as soon as the individuals become unemployed, instead of waiting one week before the individual is eligible to receive benefits.

Additional Weeks of Unemployment Benefits.  Section 2107 of the CARES Act provides an additional 13 weeks of unemployment benefits to individuals, through December 31, 2020 who remain unemployed state unemployment benefits are no longer available.

Short-Time Compensation Programs.  Sections 2108 – 2111 of the CARES Act establishes and funds a “short-time compensation program.”  The Department of Labor is required to distribute model legislative language to States, provide technical assistance, and establish reporting requirements related to these short-time compensation programs.  Employers will receive funding from States to support short-time compensation programs. Pursuant to the short-time compensation programs, employers reduce employee hours instead of laying off workers. The employees with reduced hours will receive a pro-rated unemployment benefit. State will pay 100% of the costs employers incur, through December 31, 2020, for providing this short-time compensation; states are reimbursed 50% of the costs they incur in providing the short-time compensation through December 31, 2020, and have $100 million available to implement and administer these programs.  

Railroad Unemployment Insurance Benefits.  Sections 2112 – 2114 of the CARES Act makes certain changes to the railroad unemployment insurance benefits program to insure consistency between it and the changes made in unemployment benefits for states through December 31, 2020 in other provisions of the CARES Act.  Specifically, Section 2112 eliminates, through December 31, 2020, the seven day waiting period for railroad unemployment insurance benefits; Section 2113 provides a $600.00 per week increase to each recipient of railroad unemployment insurance or Pandemic Unemployment Assistance through July 31, 2019; and Section 2114 provides an additional 13 weeks of unemployment benefits to individuals, through December 31, 2020 who remain unemployed state unemployment benefits are no longer available.

If you have any questions, please do not hesitate to contact us.