On April 17, 2020, the Department of Labor’s Deputy Assistant Secretary Joe Wheeler responded by letter to Senator Ron Wyden and other Democratic lawmakers who had raised concerns about the Coronavirus Aid, Relief, and Economic Security Act’s (CARES Act) Pandemic Unemployment Assistance (PUA) program. Notably, the letter clarifies several eligibility criteria, including that self-employed gig economy workers and workers who cannot work because they have coronavirus symptoms and are seeking a diagnosis may receive federal unemployment assistance under the PUA program.
Background on the CARES Act’s Unemployment Insurance Programs
While most states offered certain workers affected by COVID-19 some form of unemployment assistance, the federal CARES Act, signed into law on March 27, 2020, provided a $2.2 trillion shot in the arm aimed at addressing historically unprecedented unemployment rates. Its key provisions included three federally funded unemployment insurance programs to supplement and extend states’ existing unemployment regimes: the Federal Pandemic Unemployment Compensation (FPUC), the Pandemic Emergency Unemployment Compensation (PEUC), and the PUA. In general, the FPUC provides claimants $600 per week in addition to their state-based unemployment through July 31, 2020 in most states. The PEUC provides an additional 13 weeks of state unemployment insurance after a worker exhausts his or her regular state benefits (which, in most states are approximately 26 weeks, give or take) and requires the federal government to reimburse states that waive the typical one-week unpaid waiting period for unemployment benefits. Finally, the PUA provides unemployment assistance to workers typically excluded from regular state unemployment benefits, such as self-employed workers, including independent contractors, and workers with limited work histories. Under this program, workers ineligible for state benefits may receive up to 39 weeks of unemployment benefits through December 31, 2020 in most states if they certify that they are (1) partially or fully unemployed, or (2) unable or unavailable to work due to COVID-19-related circumstances.
DOL’s Existing Guidance on the CARES Act’s Unemployment Insurance Provisions
Prior to its response to Senator Wyden, the DOL’s Employment and Training Administration had already issued several unemployment insurance program letters (UIPL) providing states guidance for each of the CARES Act’s unemployment programs.
For instance, UIPL 15-20 clarified that each state enrolled in the FPUC program must notify a potentially eligible individual of his or her entitlement to these payments and confirmed that anyone who receives unemployment benefits from the state, whether full or partial, may automatically receive the additional $600 a week. UIPL 16-20 clarified when an individual lacks “sufficient work history” or becomes totally or partially unemployed due to COVID-19-related reasons for purposes of PUA coverage. Examples include individuals with insufficient wages in the last 18 months or those with bona fide offers who were unable to start work due to COVID-19. UIPL 17-20 clarified that only individuals who have exhausted their right to regular unemployment compensation under state law are eligible for PEUC coverage. “Exhaustion” occurs when either (1) no payments may be made under state law because the individual has received all available regular unemployment compensation based on his or her employment or wages, or (2) the individual’s right to regular unemployment compensation ended due to the expiration of the benefit year to which such rights attached.
Democratic lawmakers had concerns regarding the DOL’s guidance on the PUA. One gray area was where the guidance suggested as an example that for “a driver for a ridesharing service who receives an IRS Form 1099 [but] does not have a ‘place of employment,’ and thus cannot claim that he or she is unable to work because his or her place of employment has closed . . . [that driver] 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.” There was lingering confusion regarding what “forced to suspend operations” meant, and worker advocates argued that this guidance could unduly limit options for gig economy workers, particularly if the apps they used to find work were still operating. Similarly, gig workers who chose to stay home because they were at high-risk for contracting the virus could arguably be ineligible for unemployment benefits unless they could prove that a medical professional advised them to stay home. Because of this, the senators sent a letter to the DOL expressing their concerns that “parts of the guidance appear narrow or ambiguous, which could make states think they need to exclude workers who Congress clearly intended to receive unemployment compensation through the [PUA] program.”
The DOL’s Response Regarding UIPL 16-20
In the DOL’s response letter, the agency shared updates regarding its ongoing work, along with several key pieces of information. Specifically, the DOL explained that:
- While a positive COVID test is sufficient to qualify for PUA eligibility, a qualifying diagnosis does not require a positive test. As a result, “any diagnosis from a qualified medical health professional is also sufficient for a person to qualify for PUA.”
- Either a positive test or having symptoms and seeking a diagnosis is sufficient for PUA eligibility, regardless of the impact on the employment relationship.
- The closure of a school or another facility is equally sufficient for PUA eligibility. In doing so, the DOL noted, “Acknowledging that parents may rely on other facilities to provide summer care for their children, . . . if these other facilities are also closed due to the COVID-19 public health emergency, the individual may be eligible for PUA benefits.”
- Stay-at-home and shelter-in-place orders are equally sufficient for PUA eligibility.
- Health care advice to self-quarantine is sufficient for PUA eligibility.
- Independent contractors, including gig economy workers, who experience a “significant diminution of work as a result of COVID-19” may be eligible for PUA. (This position was reiterated in the DOL’s FAQs on a similar question as well.)
- PUA eligibility can be both sequential and contemporaneous with other CARES Act unemployment provisions. The DOL further explained that this applies without requiring an individual to compete a separate initial claim.
The letter ends by alluding to upcoming guidance that the DOL is planning to issue to answer common state questions, as well as a webinar the DOL is hosting for state agencies. Senator Wyden has thanked the DOL for its response and for “making crystal clear that workers Congress intended to cover get the assistance they need.” States may have different timelines for implementing these programs, so check your state DOL website for the most up to date information.