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Unemployment Benefits During the COVID-19 Pandemic – Guide

In March 2020, the United States’ longest economic expansion in modern history ran into the buzzsaw of the COVID-19 pandemic, causing an unprecedented spike in jobless claims. The nearly 17 million initial unemployment claims filed between March 15 and April 4, 2020, exceeded the Great Recession’s 18-month total, according to Politico.

To put things in perspective, roughly 10% of the American labor force filed for unemployment in less than a month. Millions more are sure to follow, even as some companies staff up to meet increased demand. A back-of-the-envelope estimate by the Federal Reserve Bank of St. Louis projected unemployment will be over 32% during the second quarter of 2020, higher than the Great Depression peak of about 25%.

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If there’s any silver lining to this sobering situation, it’s that the vast majority of workers laid off as a result of the COVID-19 pandemic are eligible for state unemployment benefits. If you’ve already been laid off as a result of the pandemic or worry your job isn’t secure, it’s essential you understand:

  • Whether you’re eligible and how much you could receive
  • How to file for unemployment benefits in your state
  • What to know about the application process
  • How to avoid issues that could delay or jeopardize your claim

Who’s Eligible Now & How Much Can You Receive?

In late March, Congress passed a $2.2 trillion stimulus and emergency financial assistance package known as the Coronavirus Aid, Relief, and Economic Security Act (CARES Act).

One of the act’s core provisions was a significant expansion of federal support for state unemployment compensation programs. This expansion authorized $600 in additional benefits per week and 13 weeks of extended benefits for each eligible recipient, both fully funded by the federal government.

The CARES Act’s unemployment expansion provision also extended unemployment benefits eligibility to formerly ineligible classes of workers, including self-employed individuals, independent contractors, and gig economy participants. The CARES Act’s unemployment expansion relies on three distinct programs created by the law:

  1. The Pandemic Unemployment Assistance (PUA) program
  2. The Pandemic Emergency Unemployment Compensation (PEUC) program
  3. The Federal Pandemic Unemployment Compensation (FPUC) program

Prior executive action had already extended benefits to employees directly or indirectly affected by COVID-19, including those whose employers are compelled by the pandemic to cease operation temporarily.

Eligibility for Unemployment Benefits Under the CARES Act Expansion & Prior Executive Action

The first program, PUA, significantly expands the pool of workers eligible to receive state unemployment benefits.

Like regular unemployment compensation programs, states administer benefits for workers newly covered under PUA, but guidelines for coverage are consistent across the entire country. According to the California Employment Development Department, which oversees what’s likely to become the most extensive state PUA program in the country, worker classes eligible for coverage under PUA include:

  • Traditional employees, who report their income on a W-2 form
  • Independent contractors, including workers who formerly earned income through gig economy apps, who often report their income on a 1099-MISC form
  • Self-employed individuals (solopreneurs)
  • Business owners

Newly covered workers are ineligible if they qualify for unemployment benefits under regular state unemployment compensation programs or qualify for certain other state-administered benefits, such as disability benefits or paid family leave. Recipients must be eligible to work in the U.S. throughout the claim period, which means the lapse of a noncitizen’s work authorization could jeopardize their eligibility for benefits.

Under PUA, unemployment compensation recipients must meet at least one of about a dozen additional criteria. Some are broadly written and likely affect many thousands of U.S. workers, such as COVID-19-related workplace closures or a severe curtailment of independent contractor hours.

The PUA program largely supersedes a prior executive action by the Department of Labor allowing but not requiring states to pay unemployment benefits to workers meeting one of three tests:

  • Their employer temporarily ceases operation due to COVID-19
  • The employee must temporarily quarantine due to COVID-19
  • The employee leaves employment due to a risk of exposure or infection in the workplace or to care for a family member with COVID-19

Limits on Unemployment Benefits: Duration & Maximum Weekly Payment

State unemployment benefit eligibility typically expires after 26 consecutive weeks, after which a worker who remains unemployed no longer receives weekly payments.

The CARES Act effectively expands this eligibility window by half its original duration, to 39 weeks. Per the Department of Labor, which is responsible for implementing the second program, the PEUC, the federal government will provide 100% funding for up to 13 weeks of additional unemployment benefits. Though state unemployment programs are responsible for disbursing these benefits, the federal government covers their entire cost, and they can’t pass that cost on to businesses through elevated unemployment insurance payments.

To qualify for 13 additional weeks of unemployment benefits paid for by the federal government, eligible workers must meet four conditions:

  1. Have exhausted state or federal unemployment compensation for a benefit year (12-month period) beginning on or after July 1, 2019
  2. Have no other rights to weekly unemployment compensation under any other state or federal law
  3. Have no rights to weekly unemployment compensation under Canadian law, which could come into play if the affected worker earns income in both the U.S. and Canada (for more on Canadian unemployment insurance, refer to this guide from Paycheck Guru)
  4. Are able, available, and actively seeking to work, subject to the COVID-related flexibility tests outlined in the executive action of March 2020

The period of eligibility for extended unemployment compensation (up to 39 weeks) runs through Dec. 31, 2020. Depending on the course and duration of the pandemic, further legislation or administrative action could result in its extension.

Through July 31, 2020, the final program, the FPUC, provides an additional weekly unemployment compensation payment of $600 to any recipient eligible for at least $1 in weekly state unemployment compensation payments. Unlike regular unemployment compensation, the size of the weekly FPUC payment isn’t a function of the recipient’s prior compensation — it’s flat for all recipients.


How to Apply for Unemployment Compensation During the COVID-19 Pandemic

Because each state administers its own unemployment compensation program, the details of the application process vary by jurisdiction. The best resource for questions about your state’s application process is your state’s unemployment insurance program, which you can find through the Department of Labor’s CareerOneStop portal.

Where to File for Unemployment Compensation

Widespread stay-at-home orders and social distancing requirements have significantly impacted most state labor departments’ operations. Even where state workforce facilities remain open, unemployment compensation applicants are strongly encouraged to apply for benefits online to reduce COVID-19 exposure risk.

However, because unprecedented claim volumes have slowed or crashed digital claim processing systems across the U.S., paper applications could actually result in faster claim processing in certain jurisdictions. Again, the best source of up-to-date guidance is your state labor department. Use the CareerOneStop portal to find your state labor department’s online application and any guidance regarding alternative application methods.

Online applications generally require:

  • A supported browser version (requirements for which vary by state) with pop-ups and JavaScript enabled
  • A supported PDF reader (the free version of Adobe Reader is usually sufficient)

Unless otherwise indicated, you should file for unemployment benefits in the state where you last worked, regardless of your state of residence. If you earned income in two or more states, you must most likely file separate applications in each state where you’re eligible to receive benefits due to a qualifying job event.

What You Need to File for Unemployment Compensation

You’re likely to need to provide or confirm the following when you apply for unemployment compensation. Some states may not require all these or may require additional information or documentation not listed here. Take any questions about your specific situation to your state’s labor department.

  • Valid, current photo identification issued by a qualifying government entity (state or federal)
  • A valid Social Security number or taxpayer ID (or alien ID number for noncitizens)
  • Pay stubs stretching back at least two years
  • Names, addresses, and dates of employment for all recent employers (usually at least 18 months back)
  • Your most recent income tax return (generally for self-employed applicants only)
  • Records of federal employment, if applicable
  • A separation notice or letter from recent employer(s), if applicable

Georgia’s application for unemployment benefits is an indication of what to expect from your own state’s. But, again, your state’s labor department is the best source of information before and during the application process.

If your state labor department has difficulty verifying your identity or work history, they’ll ask you to provide additional information by mail or online. Otherwise, unless indicated by your state labor department, you can expect to receive benefit payments within two to three weeks of your application’s approval. Moving forward, you’ll need to recertify your eligibility to receive benefits at least twice per month.


Final Word

Shocking as they are, initial and ongoing unemployment claims don’t tell the full story of the economic devastation wrought by the COVID-19 pandemic. An early April report from the Brookings Institution estimated that more than 1 in 4 American workers were laid off or had their hours reduced as a result of the pandemic. This broader measure of the total number of livelihoods affected by the pandemic is not likely to improve unless and until the American economy resumes normal function — months or perhaps years after the initial wave of pandemic-induced layoffs and business closures.

Expanded unemployment benefits alone aren’t adequate to contain the economic fallout. Not when millions of workers affected by the pandemic don’t show up in official unemployment tallies because they remain on company payrolls.

Fortunately, unemployment benefits aren’t the sum total of the economic safety net during this period of unprecedented disruption. Among other economic support measures, the CARES Act provides for one-time stimulus payments to most Americans, payroll tax deferrals for small businesses, and low-interest loans for entrepreneurs, contractors, and freelancers who’ve seen their income dry up since the pandemic began. Further stimulus payments and tax breaks could be on the way. To figure out if you qualify for any pandemic-related support programs, review our guide to the latest coronavirus stimulus and emergency assistance measures.

Have you or someone you know applied for unemployment benefits since the COVID-19 pandemic began? What has the experience been like?

Brian Martucci
Brian Martucci writes about credit cards, banking, insurance, travel, and more. When he's not investigating time- and money-saving strategies for Money Crashers readers, you can find him exploring his favorite trails or sampling a new cuisine. Reach him on Twitter @Brian_Martucci.

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