UIPL_14-20.pdf

ETA Advisory File Text

2 The President also signed the Families First Coronavirus Response Act Pub. L. 116-127 on March 18 2020 which includes the Emergency Unemployment Insurance Stabilization and Access Act of 2020 EUISAA set out in Division D. EUISAA provides 1 emergency administrative grants to states 2 emergency flexibilities to states related to temporarily modifying certain aspects of their UC laws 3 a short-term waiver of Title XII 42 U.S.C. 1321 et al. interest payments due and interest accrual on Title XII advances to states and 4 full federal funding under certain circumstances of extended benefits EB paid through December 31 2020. The Department provided guidance for implementation of these new provisions in UIPL No. 13-20 Families First Coronavirus Response Act Division D Emergency Unemployment Insurance Stabilization and Access Act of 2020 issued on March 22 2020. EUISAA also requires the Department to provide technical assistance and guidance to assist states in establishing implementing and improving employer awareness of the Short-Time Compensation STC program also known as Shared Work or Work Share. The UI program is facing an unprecedented demand due to the economic effects of COVID-19. The CARES Act builds upon actions previously taken by the Department Congress and the President by including among other things provisions for temporary coverage of individuals who have exhausted their entitlement to regular UC and individuals who are not eligible for regular UC such as individuals who are self- employed or have limited recent work history. It also provides individuals who are collecting certain benefits with an additional 600 in Federal benefits per week for weeks of unemployment ending on or before July 31 2020. This UIPL includes a summary of the UI-related provisions in Title II Subtitle A of the CARES Act and provides guidance to states for implementing the temporary emergency state staffing flexibility provision. Additional and more detailed instruction for implementing the CARES Act will be provided in forthcoming guidance. Importance of Program Integrity. The programs and provisions in the CARES Act operate in tandem with the fundamental eligibility requirements of the Federal- State UI program which remain in place. In addition some of the programs include new eligibility requirements. These requirements include that individuals are only entitled to benefits if they are no longer working through no fault of their own and that individuals must be able and available to work. While the Act does provide workers some flexibilities quitting work without good cause to obtain additional benefits would be fraud. Sections 2104 f and 2107 e expressly provide that if an individual has obtained the benefit through fraud the individual is ineligible for any additional benefit payments must pay back the benefits and is subject to prosecution under 18 USC 1001. States play a fundamental role in ensuring the integrity of the UI program. While states have been provided some flexibilities as a result of COVID-19 those 3 flexibilities are generally limited to dealing with the effects of COVID-19 as discussed in UIPL Nos. 10-20 and 13-20. States must ensure that individuals only receive benefits in accordance with these statutory provisions. The Department is actively working with states receiving funding under the Act to provide unemployment insurance benefits only to those who are entitled to such benefits. The Department is also actively engaging with the Office of the Inspector General OIG to ensure program integrity. The Act includes an appropriation of 26 million to the Office of the Inspector General of the Department of Labor Section 2115 to carry out audits investigations and other oversight activities related to states adherence to existing UI laws and policies as well as the provisions described above. 4. Details a. Summary of Provisions. The CARES Act authorizes the following provisions. i. Pandemic Unemployment Assistance PUA Section 2102 . This program provides up to 39 weeks of benefits and is available starting with weeks of unemployment beginning on or after January 27 2020 and ending on or before December 31 2020. This program covers individuals who are self-employed seeking part-time employment or whom otherwise would not qualify for regular UC or EB under state or federal law or Pandemic Emergency Unemployment Compensation PEUC under section 2107. Coverage also includes individuals who have exhausted all rights to regular UC or EB under state or federal law or PEUC. Operationally this program will be administered similar to the Disaster Unemployment Assistance DUA program. This program is available in the United States American Samoa Commonwealth of the Northern Mariana Islands the District of Columbia Federated States of Micronesia Guam Marshall Islands Puerto Rico the Republic of Palau and the U.S. Virgin Islands provided the state territory signs an agreement with the Department. Individuals must demonstrate that they are otherwise able to work and available for work within the meaning of applicable state law except that they are unemployed partially unemployed or unable or unavailable to work because of the COVID-19 related reasons specified in section 2102 a 3 A ii I of the CARES Act. ii. Emergency unemployment relief for governmental entities and non-profit organizations Section 2103 . The Department is authorized to issue guidance to allow states to interpret their state UC laws in a manner that would provide 4 maximum flexibility to reimbursing employers as it relates to timely payments in lieu of contributions and assessment of penalties and interest. This section of the CARES Act also provides for transfers to a state s account in the unemployment trust fund from the Federal Unemployment Account to provide partial reimbursements generally 50 percent of the amount of payments in lieu of contributions to state and local governmental entities certain nonprofit organizations and federally recognized Indian tribes for weeks of unemployment between March 13 2020 and December 31 2020. These partial reimbursements apply to all payments made during this time period even if the unemployed individual is not unemployed as a result of COVID-19. iii. Emergency increase in unemployment compensation benefits called Federal Pandemic Unemployment Compensation FPUC Section 2104 . This program provides an additional 600 per week to individuals who are collecting regular UC including Unemployment Compensation for Federal Employees UCFE and Unemployment Compensation for Ex-Servicemembers UCX PEUC PUA EB STC Trade Readjustment Allowances TRA Disaster Unemployment Assistance DUA and payments under the Self Employment Assistance SEA program. This is available for weeks of unemployment beginning after the date on which the state enters into an agreement with the Department and ending with weeks of unemployment ending on or before July 31 2020. This program is available in the United States the District of Columbia Puerto Rico and the U.S. Virgin Islands provided the state territory signs an agreement with the Department. Among the requirements of this program is a non-reduction rule which prohibits states from changing the computation method governing regular UC law in a way that results in the reduction of average weekly benefit amounts or the number of weeks of benefits payable i.e. maximum benefit entitlement . iv. Temporary full federal funding of the first week of compensable regular unemployment for states with no waiting week Section 2105 . States that provide compensation to individuals for their first week of unemployment i.e. states which do not require a waiting week and that enter into an agreement with the Department will receive 100 percent federal funding for the total amount of regular UC paid to individuals for their first week of regular UC. This funding is available for weeks of unemployment beginning after the date on which the state enters into an agreement with the Department and ends with weeks of unemployment ending on or before December 31 2020. v. Emergency state staffing flexibility Section 2106 . States are provided with limited emergency flexibility regarding the suspension of the requirement to use 5 personnel standards on a merit basis through December 31 2020. This provision is discussed in more detail in subsection D below. vi. Pandemic Emergency Unemployment Compensation PEUC Section 2107 . This program provides up to 13 weeks of benefits and is available for weeks of unemployment beginning after the date on which the state enters into an agreement with the Department and ending with weeks of unemployment ending on or before December 31 2020. This program covers individuals who have exhausted all rights to regular UC under state or federal law have no rights to regular UC under any other state or federal law are not receiving compensation under the UC laws of Canada and are able to work available for work and actively seeking work. However states shall offer flexibility in meeting the actively seeking work requirement if individuals are unable to search for work because of COVID-19 including because of illness quarantine or movement restriction. Among the requirements of this program is a non-reduction rule which prohibits states from changing the computation method governing regular UC law in a way that results in the reduction of average weekly benefit amounts or the number of weeks of benefits payable i.e. maximum benefit entitlement . vii. Temporary financing agreements and grants for Short-Time Compensation STC Section 2108 through Section 2111 . STC also known as Shared Work or Work Share is a lay-off aversion program where an employer reduces the hours for a group of workers to avoid layoffs and these workers receive a partial unemployment benefit payment. Section 2108 provides that states with an existing STC program under section 3306 v of the Federal Unemployment Tax Act FUTA may be reimbursed for 100 percent of STC benefit costs up to a maximum of 26 weeks of STC per individual. These reimbursements are available starting with weeks of unemployment beginning on or after March 27 2020 and ending with weeks of unemployment ending on or before December 31 2020. If a state enacts a new law providing for the payment of STC after March 27 2020 then reimbursements are available starting with the effective date of the state law enactment and ending with weeks of unemployment ending on or before December 31 2020. Section 2109 provides that states without an existing STC program in the state s UC law may provide STC benefits under an agreement with the Secretary of Labor and be reimbursed for one-half of STC benefit costs with the employer paying the other half up to a maximum of 26 weeks of STC per individual. This 6 federal STC program is available for weeks of unemployment beginning on or after the date on which the state enters into an agreement with the Department and ending with weeks of unemployment ending on or before December 31 2020. Section 2110 provides for a 100 million grant to be shared across states for implementation or improved administration and promotion and enrollment of a state s STC program. Each state s share is calculated based on 100 million minus funds used by the Department for outreach up to 0.25 percent multiplied by the state s proportionate share of calendar year 2018 FUTA taxable wages as described under Section 903 a 2 B SSA 42 U.S.C. 1103 a 2 B . Grant applications must be submitted by December 31 2023. Section 2111 provides that the Department shall develop model legislative language or disseminate existing model language which may be used by states in developing and enacting STC programs. The Department will also develop reporting requirements for states and provide technical assistance. The Department expects that the reporting requirements and technical assistance will be similar to those developed following enactment of the Middle Class Tax Relief and Job Creation Act of 2012 Pub. L. 112-96 . Please see materials on the STC landing page on WorkforceGPS at https stc.workforcegps.org . A summary table of these provisions is included with Attachment 1. b. Coordination of Programs. An individual may establish eligibility for multiple benefit programs including multiple programs authorized in the CARES Act. The information provided below regarding the order of payment is contingent on the individual meeting all eligibility criteria for the respective program s . It is also contingent on the state having entered into an agreement with the Secretary of Labor to administer such program s . i. For an individual who is eligible for regular UC including UCFE and UCX the following order of payment applies. A. The individual must first apply for and receive regular UC. The amount and duration of these benefits are dependent on state law. B. If the individual exhausts regular UC the individual may then be eligible to receive PEUC under section 2107. The duration of these benefits is limited to 13 weeks. C. If the individual exhausts PEUC and the state has triggered on to EB as defined under the Federal-State Extended Unemployment Compensation Act of 1970 26 U.S.C. 3304 note the individual may then be eligible to receive EB. The duration of these benefits is up to 13 or 20 weeks dependent on the state s unemployment rate and if state law includes a trigger for periods of high unemployment. 7 D. If the state is not triggered on to EB or the individual exhausts EB the individual may then be eligible to receive PUA under section 2104. Note that at least one of the identified COVID-19 related reasons specified in section 2102 a 3 A ii I must apply to the individual in order to be eligible for PUA. The duration of these benefits is generally limited to 39 weeks minus any weeks that the individual received from regular UC and EB. The weeks for which an individual collected PEUC will not be deducted from the individual s PUA entitlement. If a state triggers on to EB during the period in which an individual is collecting PUA and the individual has not previously exhausted entitlement to EB for the respective benefit year then the individual must stop collecting PUA and file for EB. The thresholds for a state to trigger on to EB are described in Section 203 of the Federal-State Extended Unemployment Compensation Act of 1970 26 U.S.C. 3304 note . If the individual meets the qualifications to receive Trade Readjustment Allowances TRA such benefits will be payable after the programs listed above. ii. For an individual who is not eligible for regular UC extended benefits under state or federal law or PEUC and who meets the requirements under section 2102 a 3 A ii I the individual may collect PUA under section 2102. The duration of these benefits is limited to 39 weeks minus any weeks that the individual may have received from regular UC and EB. iii. The Federal Pandemic Unemployment Compensation FPUC under section 2104 provides for an additional 600 per week to an individual collecting regular UC PEUC PUA EB STC TRA DUA and SEA. Individuals receive FPUC payments concurrently with payments under these programs. Upon execution of an agreement between the state and Department this applies to all weeks of unemployment ending on or before July 31 2020. A number of states also have provisions within state law for extending the potential duration of benefits during periods of high unemployment for individuals in approved training who exhaust benefits or for a variety of other reasons.1 Although some state laws call these programs extended benefits the Department uses the term additional benefits AB to avoid confusion with the federal-state EB program. FPUC is not payable to individuals receiving AB payments. The order of payment for AB within the context of the multiple programs described above is dependent on state law. 1 Reference Table 4-4 of the Comparison of State Unemployment Insurance Laws found at https oui.doleta.gov unemploy statelaws.asp. 8 No payments for PEUC or PUA may be made for weeks of unemployment ending on or after December 31 2020. Further details regarding definitions for terms and eligibility criteria for each program will be provided in future guidance. c. Funding for States. For benefit programs included in the CARES Act full reimbursement of benefits payable for PUA FPUC and PEUC will be made available to state agencies through Treasury s Automated Standard Application for Payments ASAP system. Federal funding for emergency unemployment relief for governmental entities and non- profit organizations and temporary full federal funding of the first week of regular compensation for states with no waiting week will be provided for as transfers from the Federal Unemployment Account to state unemployment accounts. Eligible reimbursements of STC benefits under section 2108 and section 2109 will be provided on a monthly basis to states through the Health and Human Services Payment Management System. Upon approval STC grants described in section 2110 will be transferred to state unemployment accounts. For administrative expenses the CARES Act provides for reimbursement of such sums as the Secretary estimates to be necessary for implementation of certain provisions contained in the Act. More specific information on detailed benefit transactions and computation and delivery of administrative expenses is forthcoming in subsequent guidance. d. Emergency Flexibility for State Staffing. CARES provides for temporary and limited emergency flexibility regarding the suspension of required merit personnel standards as discussed below. States are reminded of the existing flexibility described in UIPL No. 12-01 Outsourcing of Unemployment Compensation Administrative Functions issued on December 28 2000 and UIPL No. 12-01 Change 1 Outsourcing of Unemployment Compensation Administrative Functions Claims Taking issued on November 26 2007. Staffing Flexibilities Provided in the CARES Act In response to the spread of COVID-19 section 2106 CARES amends section 4102 b of EUISAA to read Notwithstanding any other law if a State modifies its unemployment compensation law and policies with respect to work search waiting week good cause employer experience rating or subject to the succeeding sentence personnel standards on a merit basis on an emergency 9 temporary basis as needed to respond to the spread of COVID-19 such modifications shall be disregarded for the purposes of applying section 303 of the Social Security Act and section 3304 of the Internal Revenue Code of 1986 to such State law. The emergency flexibility for personnel standards on a merit basis shall only apply through December 31 2020 and is limited to engaging of temporary staff rehiring of retirees or former employees on a non-competitive basis and other temporary actions to quickly process applications and claims. emphasis added . This provision gives states maximum flexibility to recruit and select staff through December 31 2020 to quickly process applications and claims. Note that the flexibility only applies for responding to workload and increased demand resulting from the spread of COVID-19. Within this emergency flexibility states must continue to ensure that eligibility decisions are based solely on the facts of each case and a reasonable application of the state s UC law to those facts. States must also ensure that individuals making decisions have the knowledge and training necessary to make the correct decisions. States are reminded of the quality standards as described in 20 C.F.R. Part 602 and further discussed in ET Handbook No. 301 5th Edition Change 1 UI Performs Benefits Timeliness and Quality Nonmonetary Determinations Quality Review and ET Handbook No. 395 5th Edition Revision to the State Operations Handbook for the Unemployment Insurance UI Benefit Accuracy Measurement BAM Program which remain in effect. States should work closely with their human resources departments to increase staffing levels quickly to respond to the increased demand. e. Emergency Flexibility across Programs. Many states have adopted temporary emergency flexibility measures for their regular UC program as provided by section 4102 b of EUISAA as discussed in UIPL No. 13-20. The eligibility requirements for collecting PUA are different from those of regular UC and will be addressed in forthcoming guidance. The relationship between temporary emergency flexibility measures for regular UC and EB will also be addressed in future guidance. Any temporary emergency flexibility measures that states have adopted for regular UC under 4102 b of EUISAA are applicable to the administration of PEUC. Additionally section 2107 a 7 B of the CARES Act requires that states provide flexibility for PEUC in case of individuals unable to search for work because of COVID-19 including because of illness quarantine or movement restriction. 10 5. Inquiries. We encourage states to contact the Department for technical assistance. Please direct inquiries to covid-19 dol.gov with a copy to the appropriate Regional Office. 6. References. Coronavirus Aid Relief and Economic Security CARES Act Pub. L. 116-136 including Title II Subtitle A Relief for Workers Affected by Coronavirus Act Families First Coronavirus Response Act Pub. L. 116-127 including Division D Emergency Unemployment Insurance Stabilization and Access Act of 2020 EUISAA Middle Class Tax Relief and Job Creation Act of 2012 Pub. L. 112-96 Federal-State Extended Unemployment Compensation Act of 1970 26 U.S.C. 3304 note Section 303 Social Security Act SSA 42 U.S.C. 503 Section 3306 Federal Unemployment Tax Act FUTA 42 U.S.C. 3306 20 C.F.R. Part 602 UIPL No. 12-01 Outsourcing of Unemployment Compensation Administrative Functions issued on December 28 2000 https wdr.doleta.gov directives corr doc.cfm DOCN 1736 UIPL No. 12-01 Change 1 Outsourcing of Unemployment Compensation Administrative Functions Claims Taking issued on November 26 2007 https wdr.doleta.gov directives corr doc.cfm DOCN 2558 UIPL No. 10-20 Unemployment Compensation UC for Individuals Affected by the Coronavirus Disease 2019 COVID-19 issued on March 12 2020 https wdr.doleta.gov directives corr doc.cfm DOCN 8893 UIPL No. 13-20 Families First Coronavirus Response Act Division D Emergency Unemployment Insurance Stabilization and Access Act of 2020 issued on March 22 2020 https wdr.doleta.gov directives corr doc.cfm DOCN 8634 ET Handbook No. 301 5th Edition Change 1 UI Performs Benefits Timeliness and Quality Nonmonetary Determinations Quality Review https wdr.doleta.gov directives corr doc.cfm DOCN 2158 ET Handbook No. 395 5th Edition Revision to the State Operations Handbook for the Unemployment Insurance UI Benefit Accuracy Measurement BAM Program https wdr.doleta.gov directives corr doc.cfm DOCN 2822 and Short-Time Compensation STC landing page on WorkforceGPS https stc.workforcegps.org . 7. Attachment s . Attachment I Summary of Programs for the Relief for Workers Affected by Coronavirus Act I-1 Attachment I Coronavirus Aid Relief and Economic Security CARES Act of 2020 Public Law Pub. L. 116-136 Summary of the Unemployment Insurance UI provisions in Title II Subtitle A Program and Section Reference from Act Period of Applicability What it Does Pandemic Unemployment Assistance PUA Sec. 2102 Weeks of unemployment beginning on or after 01 27 20 through 12 31 20 Provides for up to 39 weeks of benefits to individuals who are self- employed seeking part-time employment or otherwise would not qualify for regular unemployment compensation UC or extended benefits under state or federal law or Pandemic Unemployment Compensation PEUC under section 2107. Coverage includes individuals who have exhausted all rights to regular UC or extended benefits under state or federal law or PEUC. Emergency Unemployment Relief of Governmental Entities and Non-profit Organizations Sec. 2103 Weeks of unemployment from 03 13 20 through 12 31 20 Authorizes the Department to issue guidance to allow states to interpret their state UC laws in a manner that would provide maximum flexibility to reimbursing employers as it relates to timely payment and assessment of penalties and interest. Also provides for transfers to a state s account in the unemployment trust fund from the Federal Unemployment Account to allow partial reimbursements generally 50 percent of the amount of payments in lieu of contributions to state and local governmental entities certain nonprofit organizations and federally recognized Indian tribes. Federal Pandemic Unemployment Compensation FPUC Sec. 2104 Weeks of unemployment beginning after the date of signed agreement through 07 31 20 Provides individuals who are collecting regular UC PEUC PUA EB STC TRA DUA and SEA with an additional 600 per week. I-2 Temporary Full Federal Funding of the First Week of Compensable Regular Unemployment Sec. 2105 Weeks of unemployment beginning after the date of signed agreement through 12 31 20 For states without a waiting week provides 100 federal funding for the total amount of regular UC paid to individuals for their first week of regular UC. Emergency State Staffing Flexibility Sec. 2106 03 27 20 through 12 31 20 Provides state agencies with emergency flexibility for personnel standards on a merit basis limited to engaging of temporary staff rehiring of retirees or former employees on a non-competitive basis and other temporary actions to quickly process applications and claims. Pandemic Emergency Unemployment Compensation PEUC Sec. 2107 Weeks of unemployment beginning after the date of signed agreement through 12 31 20 Provides for up to 13 weeks of benefits to individuals who have exhausted regular UC under state or federal law have no rights to regular UC under any other state or federal law are not receiving compensation under the UC laws of Canada and are able to work available for work and actively seeking work. However states must offer flexibility in meeting the actively seeking work requirement if individuals are unable to search for work because of COVID-19 including because of illness quarantine or movement restriction. Temporary Financing for existing Short-Time Compensation STC Programs Sec. 2108 03 27 20 through 12 31 20 Provides that states with an existing STC program may be reimbursed for 100 percent of STC benefit costs up to a maximum of 26 weeks of STC per individual. Temporary Financing of STC agreements Sec. 2109 Weeks of unemployment beginning after the date of signed agreement through 12 31 20 Provides that states without an existing STC program may provide STC benefits under an agreement with the Secretary of Labor and be reimbursed for one-half of STC benefit costs up to a maximum of 26 weeks of STC per individual. Grants for STC Programs Sec. 2110 Grant applications must be submitted by 12 31 23 Provides for a 100 million grant to be shared across states for implementation or improved administration and promotion and enrollment of the state s STC program. I-3 Assistance and Guidance for Administering Programs Sec. 2111 Effective 03 27 20 Provides that the Department shall develop model legislative language or disseminate existing model language which may be used by states in developing and enacting STC programs. The Department will also develop reporting requirements for states and provide technical assistance.