The 2020 CARES Act Expands Unemployment Coverage

COVID-19 Update

On March 27, 2020 the Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law, after it passed the House of Representatives. It was previously unanimously approved by the Senate. The CARES Act is a $2 trillion economic stabilization package aimed at providing relief to individuals, families and businesses impacted by COVID-19.

One of the most prominent provisions of the Act provides unemployment insurance “on steroids,” in the words of Senate Minority Leader Schumer—extending both the amount of and eligibility for unemployment benefits. Notably, this bill extends assistance to self-employed workers, gig workers, freelancers and independent contractors who are usually ineligible for unemployment insurance.  

Specifically, the Act defines “Covered Individuals” to include:

  • Individuals who are able and available to work (as defined by applicable state law) but are unemployed, partially unemployed, unable or unavailable to work because:

    1. They have been diagnosed with COVID-19;

    2. They are experiencing symptoms of COVID-19 and seeking medical diagnosis;

    3. A member of their household has been diagnosed with COVID-19;

    4. They are providing care for a family or household member diagnosed with COVID-19;

    5. They are unable to work because their child, or other household member whose primary caregiving they are responsible for, is unable to attend school or another facility that is closed due to COVID-19;

    6. They are unable to get to work because of a quarantine imposed due to COVID-19;

    7. They are unable to get to work because they have been advised by a healthcare provider to self-quarantine as a direct result of COVID-19;

    8. They were scheduled to begin employment but do not have, or cannot reach a job as a direct result of COVID-19;

    9. They have become the breadwinner or major support for a household because the head of that household died as a direct result of COVID-19;

    10. They have to quit as a direct result of COVID-19;

    11. Their place of employment is closed as a direct result of COVID-19;

    12. They meet any additional criteria established by the Secretary of Labor for unemployment assistance; or
  • Individuals who are self-employed, 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 pandemic emergency unemployment compensation under Section 2107, and meets a requirement of (1) – (12) above.

To that end, the CARES Act provides, for four months of unemployment benefits, a $600 increase to weekly benefit amounts already authorized by state law. It is a sizable increase to what is currently provided, and the one-week waiting period is also waived, allowing the benefits to become more readily available.

Manatt’s Employment and Labor team continues to closely track the details of this new legislation and is available to provide guidance to employers on this and other COVID-19-related developments at both state and federal agencies. Please feel free to contact the team for additional information.

For regular updates on the major challenges companies are facing, please visit our COVID-19 resources page and subscribe for timely updates in your inbox here.

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