CARES Act: Paid Leave and Unemployment
March 31, 2020
On March 27, 2020 the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was signed into law, infusing $2 trillion of stimulus into the U.S. economy in order to respond to the impact that COVID-19 has had, and continues to have. Much of the Act deals with providing support to businesses, both large and small. Other parts, however, provide support for individuals, including those who have lost their jobs or been unable to work as a result of the spread of the virus. Below is a summary of the parts of the Act that affect the paid leave benefits made available under the Families First Coronavirus Act (FFCRA), a summary of which can be read here, and changes to unemployment compensation laws in order to extend and expand the availability of such benefits.
Changes to Emergency Family and Medical Leave
As part of the FFCRA, the Family Medical Leave Act (FMLA) was extended to provide up to ten weeks of paid leave for individuals who are unable to work, including telework, as a result of having to care for a child whose school or daycare is closed, or whose normal childcare provider is unavailable, as a result of COVID-19. (More details on this expanded FMLA leave). The CARES Act affirmed that such paid leave shall be capped at $200 per day and $10,000 total for each employee receiving this paid leave. The FFCRA also provided that in order to be eligible for paid FMLA leave, an employee had to be employed by the employer from which he/she is seeking paid leave for at least 30 calendar days. The CARES Act further clarifies that this includes employees who were laid off by their employer no later than March 1, 2020 who had worked for that employer for no less than 30 calendar days of the 60 calendar days prior to the employee’s layoff and then was rehired by that same employer.
Changes to Emergency Paid Sick Leave
The FFCRA also provided eligible employees with up to 80 hours of emergency paid sick leave. (More details on the Emergency Paid Sick Leave Act). The CARES Act affirmed the caps on available paid sick leave at $511 per day and $5110 total for employees taking leave for reasons relating to their having been personally affected by COVID-19 and $200 per day and $2000 total for employees taking leave due to care for others affected by COVID-19 or to care for children whose school/daycare is closed or due to the unavailability of their childcare provider as a result of COVID-19.
The only change to the Emergency Paid Sick Leave Act contained in the CARES Act is the expansion of reasons for which employers with fewer than 50 employees may seek exemption from providing paid sick leave. Under the FFCRA, such exemption could be sought by employers whose viability would be jeopardized by compliance with the law only with regard to employees who sought paid sick leave to care for children whose schools/daycares were closed or whose childcare providers were unavailable due to COVID-19. The CARES Act expands exemption eligibility to employers under 50 employees whose employees seek paid sick leave in order to care for another individual subject to quarantine. Thus, more small employers may be deemed exempt from providing paid sick leave as a result of this change contained in the CARES Act. The Department of Labor’s limited guidance on how this process will work advises businesses with fewer than 50 employees to document why the required criteria are met, and indicates the process for seeking exemption will be addressed in more detail in forthcoming regulations.
Changes to Unemployment Compensation
The major employment law-related change contained in the CARES Act deals with changes to unemployment compensation law. The Act’s main changes to unemployment compensation take the following three forms:
1. Emergency Increase in Regular Unemployment Compensation Benefits
The CARES Act provides an emergency increase to regular unemployment compensation benefits to all states entering into agreements with the U.S. Secretary of Labor. Participating states will provide individuals who otherwise would be eligible for regular unemployment compensation benefits with an additional $600 in weekly Federal Pandemic Unemployment Compensation. This additional funding shall be available until July 31, 2020. This additional weekly $600 shall not be counted when determining an individual’s income for any purpose under any program established under the Social Security Act.
2. Pandemic Emergency Unemployment Compensation
The CARES Act also provides unemployment benefits to individuals who would not otherwise be eligible for regular unemployment compensation. States which enter into agreements with the U.S. Secretary of Labor also will be eligible to provide the Pandemic Emergency Unemployment Compensation described above to individuals who:
- Have exhausted all of their rights to regular unemployment compensation;
- Have no right to regular unemployment compensation;
- Are not receiving unemployment compensation from Canada; and
- Are able and available to work and are seeking work.
The weekly amount of such benefits shall be equal to the individual’s regular weekly amount of unemployment compensation, plus an additional $600 in federal pandemic compensation. Individuals may receive a total equal to an amount that is 13 times their average weekly benefit (including the additional $600 weekly federal pandemic compensation) in any single benefit year. This provision should extend unemployment compensation benefits to a large group of workers who do not qualify because they are classified as independent contractors.
3. Pandemic Unemployment Assistance
Finally, the CARES Act provides Pandemic Unemployment Assistance, which is a form of compensation for individuals who are not eligible for regular unemployment compensation, extended benefits under either state or federal law, or the Pandemic Emergency Unemployment Compensation outlined above. Eligible individuals are those who are otherwise able and available to work, but find themselves unemployed or unavailable for work because of one of the following reasons:
- The individual has been diagnosed with COVID-19 or is experiencing symptoms and is seeking a medical diagnosis;
- A member of the individual’s household has been diagnosed with COVID-19;
- The individual is providing care for a family member or household member who has been diagnosed with COVID-19;
- The individual’s child, or family member in his/her care, is unable to attend school or another facility closed due to COVID-19;
- The individual is unable to reach his/her place of employment due to quarantine imposed because of COVID-19;
- The individual has been advised by a healthcare provider to self-quarantine because of COVID-19;
- The individual was scheduled to start work but does not have a job or is unable to reach his/her place of work because of COVID-19;
- The individual has become the main household earner due to the death of the head of the household due to COVID-19;
- The individual had to quit his/her job due to COVID-19;
- The individual’s place of employment is closed as a direct result of COVID-19;
- The individual meets any additional criteria established by the Secretary for unemployment assistance.
Individuals also will be eligible if they are self-employed and are seeking part-time employment, do not have sufficient work history, or otherwise would not qualify for regular unemployment or extended benefits under state or federal law or the Pandemic Emergency Unemployment Compensation and meet any the requirements above. However, this does not include any individual who:
- Is able to telework with pay; or
- Is receiving paid sick leave or other paid leave benefits, regardless of whether the individual meets the qualifications above.
These benefits will be provided to all eligible employees while they are unemployed, partially unemployed, or unable to work for the weeks of unemployment when the individual is not entitled to any other unemployment compensation. Eligible individuals may collect benefits from January 27, 2020 until December 31, 2020 and shall continue so long as their COVID-19-related unemployment continues, not to exceed 39 weeks. These 39 weeks will include any week during which an individual receives regular unemployment compensation or any extended unemployment benefits under state or federal law. The weekly benefit amount available shall be equal to the normal weekly unemployment compensation benefit available under state law plus the Federal Pandemic Unemployment Compensation.