Thursday, March 19, 2020

On Unemployment Insurance and COVID-19

As COVID-19 causes layoffs, workers will turn to State unemployment insurance (UI). Here are what some States and the federal government have done thus far to make it easier for workers affected by COVID-19 to qualify for UI benefits. (Note: This post was updated on March 24, 2020.)


Although States set the eligibility requirements for UI, for the US Department of Labor to certify a State's UI program (a condition for federal funding and tax credits), that State's UI law must require that, "for regular compensation for any week, a claimant must be able to work, available to work, and actively seeking work." 42 U.S.C. § 503(a)(12). State UI rules also typically deny UI benefits to anyone who voluntarily quits their employer absent good cause for doing so (DOL 2019, chap. 5).

How can unemployed workers meet these "available" and "actively seeking" requirements in a pandemic? And what if they are asymptomatic but quit to self-isolate or care for a family member with symptoms?

The States Move

As a recent US Department of Labor (DOL) guidance noted, States have some room to maneuver in deciding how to meet these requirements. For example, a State may take an individual as "available" to work if that individual is "on temporary lay-off and is available to work only for the employer that has temporarily laid-off the individual." 20 CFR § 604.5(a)(3).

In response to COVID-19, some States have moved to relax UI eligibility.

Under Washington State's UI law, see Wash. Stat. § 50.20.101, the State recognizes a category of UI-eligible "stand by workers" that includes someone "temporarily unemployed due to natural disaster." Wash. Admin. Code 192-110-015(1)(a)(iii). As part of its COVID-19 response, Washington now provides that, for such workers, that "[t]he requirement to register for work and search for work is fulfilled so long as you are on standby and take reasonable measures to maintain contact with the employer." Id. 192-110-015(1)(b).

In Ohio, the governor has declared that, under Ohio UI law, a UI applicant is unemployed and not required to "actively seek" work if the applicant is "requested by a medical professional, local health authority, or employer to be isolated or quarantined as a consequence of COVID-19 even if not actually diagnosed with COV-19," except where the worker has "access to leave benefits from their employer(s)." Ohio E.O. 2020-03D

In Michigan, the governor has suspended "strict compliance" with key parts of Michigan's UI law until April 14. For example, for UI eligibility, an individual must be deemed to have been laid off, or to have left work involuntarily for medical reasons, if that person became unemployed, or left work, respectively, because of

self-isolation or self-quarantine in response to elevated risk from COVID-19 due to being immunocompromised, displaying the symptoms of COVID-19, having contact in the last 14 days with someone with a confirmed diagnosis of COVID-19, the need to care for someone with a confirmed diagnosis of COVID-19, or a family care responsibility as a result of a government directive.

Michigan E.O. No. 2020-10.

In Wisconsin, the governor has declared, among other things, that during any week in a which there is a "public health emergency," its UI system will assume that a claimant is "available for suitable work" that week, provided that an employer "perceive[s]" the claimant "as exhibiting COVID-19 symptoms preventing a return to work" or the claimant is quarantined; and one of the following applies:

a. The employer has instructed the claimant to return to work after the employee no longer exhibits symptoms, after a set amount of time to see if the disease is present, or after the quarantine is over.

b. The employer has not provided clear instruction for the claimant to return to work.

c. The claimant would be available for other work with another employer but for the perceived COVID-19 symptoms preventing a return to work or the quarantine.

Wisconsin Emergency Order #7,

In Connecticut, the State's Commissioner of Labor has waived the active-search requirement "during the pandemic crisis, so long as such individuals remain ready to return to work once the pandemic crisis measures have been lifted."

States have more flexibility with respect to UI eligibility requirements that the federal law does not mention, such as waiting periods. For States suspending waiting-week requirements, see, e.g., Calif. E.O. N-25-20 and N.Y. E.O. No. 202.1, p. 3.

If undocumented, however, a worker is likely ineligible for UI in any case. To be federally-certified, a State's UI law must provide that a claimant, in order to be "available to work," must, if a non-citizen, be legally authorized to work in the United States. See 20 CFR § 604.5(f). Moreover, in 1996, Congress made undocumented workers ineligible for "any State or local public benefit," 8 U.S.C. § 1621(a), a term that includes any "unemployment benefit," id. § 1621(c)(1)(B). (Section 1621 does not apply to public health assistance for testing and treatment for COVID-19. See 8 U.S.C. § 1621(b)(3).)

Congress and Emergency UI Funding to States

The recently-enacted Emergency Unemployment Insurance Stabilization and Access Act of 2020 authorizes about $1 billion in emergency grants for State unemployment insurance programs. One of the conditions: The State shows that it has or is moving to "ease eligibility requirements and access to unemployment compensation for claimants, including waiving work search requirements and the waiting week and directly or indirectly relieving benefit charges for claimants and employers directly impacted by COVID-19 due to an illness in the workplace or direction from a public health official to isolate or quarantine workers." Act § 4102(a).

That Act also provides that, for purposes of applying its regular UI certification requirements, the DOL "shall" disregard any State modifications of UI "law and policies with respect to work search, waiting week, good cause, or employer experience rating on an emergency temporary basis as needed to respond to the spread of COVID-19." Act § 4102(b). Thereafter, DOL issued a guidance on what temporary measures States might adopt accordingly. For example, DOL suggests that States modify their UI requirement that any voluntary quits must be for "good cause" to allow workers to leave work "due to reasonable risk of exposure or infection (i.e., self-quarantine) or to care for a family member affected by the virus." (DOL 2020, p. 8)

Disaster Unemployment Assistance?

On March 20, the President declared all of New York State a "major-disaster" under the Stafford Act because of COVID-19. He's now done the same for Washington State and California.

Once he issues this kind of "major disaster" declaration, the Stafford Act authorizes the President to provide unemployment assistance to workers laid off because of COVID-19 who otherwise wouldn't qualify under State UI law. The President hasn't done that yet, even though at least California and New York asked for it.

Section 410 of the Stafford Act authorizes the President to provide "to any individual unemployed as a result of a major disaster such benefit assistance as he deems appropriate" while that individual is unemployed. That individual, however, can't be "entitled to any other unemployment compensation." And disaster unemployment assistance only lasts "as long as the individual's unemployment caused by the major disaster continues or until the individual is reemployed in a suitable position," but no longer than 26 weeks after the major disaster is declared. The amount can't be more than the maximum under the UI law of the State "in which the disaster occurred." 42 U.S.C. § 5177(a). Federal regulations set forth eligibility requirements for such relief, see 20 C.F.R. § 625.4, including that the "individual is able to work and available for work within the meaning of the applicable State law," id. § 625.4(g). Notably, eligibility does not depend on employee status; it extends to either an unemployed worker or "an unemployed self-employed individual," id. § 625.4(c).

Can COVID-19 count as a "major disaster" under the Stafford Act? The Act defines the term "major disaster" to mean

any natural catastrophe (including any hurricane, tornado, storm, high water, winddriven water, tidal wave, tsunami, earthquake, volcanic eruption, landslide, mudslide, snowstorm, or drought), or, regardless of cause, any fire, flood, or explosion, in any part of the United States, which in the determination of the President causes damage of sufficient severity and magnitude to warrant major disaster assistance under this chapter to supplement the efforts and available resources of States, local governments, and disaster relief organizations in alleviating the damage, loss, hardship, or suffering caused thereby.

42 U.S.C. § 5122(2).

Because this definition does not expressly refer to a disease outbreak, a Congressional Research Service (CRS) report, dated March 12, 2020, tersely opined that disaster unemployment assistance "will not be available under current law in response to COVID-19." A more detailed 2008 CRS report, however, concluded that an influenza epidemic is neither clearly included or excluded from the term "natural catastrophe" under the Stafford Act's definition of "major disaster".

Processing Claims

Even if States make it easier to become UI eligible, what's unclear is how COVID-19 will affect government capacity to process claims and get funds to claimants. Most UI claims are filed via the Internet, though in some States (e.g, Kansas, Vermont), many file by phone (DOL 2020). As UI claims increase, State will have to fortify their UI website portals (for reports of State UI website crashes, see, e.g., here and here) and have enough government employees available to process those UI claims.

--- Sachin Pandya

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