What Unemployment Benefits Are in the COVID Short-Term Partial Relief Bill? 

Congress passed a short-term relief bill after months of demands by unemployed workers to extend unemployment insurance (UI). It is less than they need, and in the new year, workers will continue to demand more support to ensure a just recovery. We need to meet the urgent humanitarian and racial justice demands by extending and providing benefits that last throughout the pandemic and economic recovery. People are facing hunger and homelessness, with Black, indigenous, and immigrant folks and women and people of color bearing the most harm.  

Here are the unemployment benefits included in the latest legislation: 

The CARES Act unemployment program extensions. All CARES Act unemployment programs are extended by 11 weeks to March 14. That includes:  

  • Pandemic Unemployment Assistance (PUA), which is an unemployment benefit for people who would not otherwise qualify for state unemployment insurance (UI) and who lost work due to one of several COVID-19 related causes; 
  • Pandemic Emergency Unemployment Compensation (PEUC), which originally provided 13 additional weeks of benefits to regular UI but now adds 24 weeks; and 
  • Federal Pandemic Unemployment Compensation, which adds $300, down from $600 earlier this year, to every benefit. 
  • After March 14, workers already approved for PEUC or PUA who have not exhausted all the weeks to which they are entitled, can continue to collect them for four more weeks. This applies to benefit weeks up to and including the week of April 5, 2021. 

Waivers for Pandemic Unemployment Assistance overpayments. This bill would allow states to waive PUA overpayments in the case of “equity and good conscience”—which generally means that if there was an honest mistake that could be painful to repay for the claimant, collection of such payment can be waived. A growing number of states are stepping up their efforts to resolve overpayment issues. States can also waive Lost Wages Assistance (LWA) overpayments under the same kind of circumstances, on the extra $300 benefit created by Presidential Memorandum in August. 

Similarly, the legislation ensures that people who were unable to complete new certification requirements for past weeks of PUA are held harmless. During the summer, the U.S. Department of Labor’s Employment and Training Administration told many states that they had to go back and make workers certify their COVID-related cause for unemployment each week. Claimants unable to meet that requirement should be held harmless. 

The bill specifically allows for PUA appeals to be at the state level, which is how the Employment and Training Administration had been administering it, and limits retroactivity of new PUA claims to go back to December 1, 2020. 

The legislation also created some critical fixes. 

  • A fix for “mixed income” earners. Some people earned most of their income in work that would qualify for a larger PUA benefit, but because they had some W2 earnings, it was just enough to get them a small UI benefit. The compromise would get them an extra $100 per week if they had $5,000 of qualifying income. This provision is optional for states. 
  • Benefit Year Fix. As people reach one year of collecting unemployment, state agencies are usually required to recalculate benefits based on prior year earnings. During lengthy recessions, that could mean someone who only had sporadic work or was unemployed for the whole year may qualify for a much smaller benefit, if any benefit at all. This “benefit year fix” mirrors a provision that applied in the last recession that allows workers to keep collecting benefits based on the original year they qualified in. 
  • A technical fix for states that triggered off Extended Benefits but then added new triggers that should have triggered them on, as happened in Colorado recently. 

Programs that have long been a part of UI have also been extended. The federal funding for Short Time Compensation (STC), or work sharing, was extended through March 14, 2021. This program allows employers to choose to reduce hours across the workforce instead of cutting jobs. This keeps these benefits fully federally funded in states with permanent programs in place and 50 percent funded if the state set up a COVID emergency program. Additionally, full funding of Extended Benefits (EB) will continue. This is a long-standing automatic UI extension that turns on when the economy hits a steep downturn. Triggers vary by state, and many states that triggered onto EB early in the pandemic are already off. But for states with this still in operation, these benefits will be federally funded, rather than split by the states and the federal government.   

Also continuing is the 50 percent forgiveness for “reimbursing employers.” Non-profits and government entities can operate as “reimbursing employers” and choose not to pay regular UI taxes as long as they promise to pay the state for benefits paid to workers they lay off. Congress allowed them 50 percent relief for this in the CARES Act, and this will continue until March 14. In addition, Congress lessened federal funding of the waived waiting week. For states that waived the one-week waiting period to receive benefits, that week will now only be 50 percent federally funded rather than 100 percent federally funded. The legislation also extends interest-free federal loans. States exhausting trust funds will not have to pay interest on those federal loans through March 14, 2021. The bill extends the controversial merit staffing waiver, which is a real threat to the integrity of the system. It allowed states to hire staff without using a merit-based state employee hiring process. Workers hired last year using this waiver can stay on the payroll throughout the extension. 

The legislation also includes new requirements for states and workers. New PUA applicants on or after January 31 will be required to submit available wage records within 21 days unless they can prove they had good cause to miss that filing deadline. Anyone who has received PUA since passage of the CARES Act will have 90 days to provide proof of unemployment. There is a protection in the bill to make sure claimants won’t be kicked off benefits purely by virtue of this provision. Additionally, states must now implement identity verification systems. This is an attempt to foil the international fraud ring, but could pose problems for populations that don’t have access to photo ID. The bill also requires states to provide employers notice about their responsibility to report workers who refuse job offers, and to provide information in plain language to claimants about what their rights are to refuse unsuitable work. 

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About the Author

Michele Evermore

Senior Policy Analyst, National Employment Law Project

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