Unemployment Insurance in the Wake of COVID-19

By: Irwin Aronson, Lauren Hoye, Jessica Brown, and William Campbell

In response to the COVID-19 pandemic sweeping the country, the U.S. Congress passed the Families First Coronavirus Response Act (FFCRA). This legislation, in addition to providing limited paid sick and family leave to some employees, significantly modified some of the eligibility criteria for Unemployment Insurance (UI) benefits.

Eligibility for UI benefits is determined by the designated public agency in the state in which the worker earns wages in covered employment; UI eligibility determinations are not made by any employer. If an employer no longer offers suitable work to a worker who is otherwise able and available for suitable employment, the affected employee should sign up for UI benefits. Depending upon the specific state’s unemployment statute, an employee whose work is cut back or eliminated due to the COVID-19 pandemic may be eligible for UI Benefits if he or she experiences one or more of the following:

• Layoff;
• Reduction in hours;
• Is told by the employer not to work due to potential COVID-19 exposure;
• Has been instructed to self-isolate or quarantine; or
• Stays at home for a necessitous and compelling reason, which could include living or working in an area where a government agency has instituted shelter in place or self-isolation.

In Pennsylvania, an employer may not attempt to condition a laid off or soon-to-be laid off employee’s eligibility for UI benefits on the employee first “burning off” accumulated paid time off such as vacation or sick leave. Again, it is not the employer, but rather the state agency, that determines eligibility for UI benefits. Employees who are prohibited from working due to any employer policy or governmental restriction that is related to COVID-19 may and should sign up for UI Benefits, even if that employee is entitled to or eligible for paid time off from work such as sick leave or vacation time. If the employee collects severance pay, in addition to or in lieu of a payout for accumulated paid leave time, any amount of severance pay collected that is in excess of 40% of Pennsylvania’s average annual wage (which is $21,878.48 for 2020) will be deducted from the employee’s UI benefits. If the employee collects less than $21,878.48 in severance pay, an otherwise eligible employee will not face a deduction from his or her UI benefits.

The FFCRA also permits states to relax certain timing and eligibility rules and requirements related to obtaining UI benefits, and provides some potential federal administrative funding to state UI programs that are in conformity with minimum federal requirements. These changes have made UI benefits more accessible and eligibility a bit less demanding for Claimants in some states.

In Pennsylvania specifically, the Department of Labor and Industry, the state agency that administers UI benefits, has announced some immediate administrative changes to the UI program, including the following:

• The “Waiting Week” has been suspended. Now, eligible Claimants may receive UI benefits starting with their first week of unemployment or reduced hours of employment; and
• The “active search for work” and work registration requirements are temporarily waived. Eligible Claimants do not have to prove that they have applied for or searched for a new job in order to receive or maintain Pennsylvania UI benefits, nor do they need to register with www.PACareerLink.pa.gov at the present time.

If the unemployment rate in Pennsylvania reaches a sustained high level, Federal Extended Unemployment Insurance benefit eligibility may be triggered for people who experience long periods of unemployment or partial unemployment. Should economic conditions worsen, and the unemployment rate rise on a sustained basis, workers may be eligible for an additional up to 13 weeks of Federal Extended UI benefits. In the past, states were required to fund 50% of the cost of these extended benefits. Under the FFCRA, the Federal government temporarily funds the total cost.

More detailed information regarding COVID-19 and UI eligibility and benefits in Pennsylvania specifically is available at: https://www.uc.pa.gov/Pages/covid19.aspx.

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