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Pandemic Unemployment Insurance Update – Continued Assistance for Unemployed Workers Act of 2020

The Relief for Workers Affected by Coronavirus Act, which was enacted on March 27, 2020, as part of the CARES Act, significantly expanded unemployment insurance during the COVID-19 pandemic by increasing the number of weeks of benefits, increasing the amount of benefits, and covering individuals who would traditionally not be eligible for benefits.  On December 27, 2020, the date that the benefits available under the Relief for Workers Affected by Coronavirus Act would otherwise have ended, the Continued Assistance for Unemployed Workers Act of 2020 was enacted.  The Continued Assistance for Unemployed Workers Act of 2020 extends, with some modifications, the benefits that were available under the Relief for Workers Affected by Coronavirus Act, supplementing the regular benefits and extended benefits that are available under New York law.

Pandemic Emergency Unemployment Compensation (PEUC)

Pandemic Emergency Unemployment Compensation (PEUC) provided an additional 13 weeks of benefits to claimants with a benefit year ending on or after July 1, 2019 who exhausted their regular benefits from March 30, 2020 to December 27, 2020.

The Continued Assistance for Unemployed Workers Act of 2020 extends PEUC to March 14, 2021 with a phaseout through April 11, 2021 (for claimants receiving PEUC during the week ending March 14, 2021).  It also increases the number of weeks of PEUC from 13 to 24, with the additional 11 weeks available beginning December 28, 2020.

Federal Pandemic Unemployment Compensation (FPUC)

Federal Pandemic Unemployment Compensation (FPUC) provided an additional $600 of benefits per week from March 30, 2020 to July 26, 2020.  The Continued Assistance for Unemployed Workers Act of 2020 reinstates FPUC—at a reduced amount of $300 per week—from December 28, 2020 to March 14, 2021.  FPUC is not available for weeks during the gap from July 27, 2020 to December 27, 2020, and there is no phaseout for FPUC.

Extended Benefits (EB)

During periods of high unemployment, states may trigger “on” for Extended Benefits (EB).  EB provides an additional 13 or 20 weeks of benefits, depending on the state’s unemployment rate.  Generally, a claimant must have exhausted regular benefits and PEUC to be eligible for EB (although the Continued Assistance for Unemployed Workers Act of 2020 makes an exception for claimants who began receiving EB before PEUC was extended).  Since July 6, 2020, New York has been triggered “on” for 20 weeks of EB.  (Because July 6, 2020 is the earliest date that a claimant could have exhausted 13 weeks of PEUC, it is also the earliest date that a claimant could have been eligible for EB.)  It is unknown when New York will trigger “off” for EB because it depends on the state’s unemployment rate.

Pandemic Unemployment Assistance (PUA)

Pandemic Unemployment Assistance (PUA) provided benefits to individuals who were not otherwise eligible for benefits and unemployed, partially unemployed, or unable to work because of the COVID-19 pandemic.  PUA was available from January 27, 2020 (backdated) to December 27, 2020.  Initially, PUA was available for 39 weeks (i.e., the equivalent of 26 weeks of regular benefits plus 13 weeks of PEUC).  Once New York triggered “on” for an additional 7 weeks of EB, the number of weeks of PUA increased by an equivalent amount to 46.

The Continued Assistance for Unemployed Workers Act of 2020 extends PUA to March 14, 2021 with backdating to December 1, 2020 (for claims opened on or after December 28, 2020) and a phaseout through April 11, 2021 (for claimants receiving PUA during the week ending March 14, 2021).  It also increases the number of weeks of PUA from 39 to 50, with the additional 11 weeks available beginning December 28, 2020.  As long as New York is triggered “on” for an additional 7 weeks of EB, the number of weeks of PUA increases by an equivalent amount to 57.

Mixed Earners Unemployment Compensation (MEUC)

Mixed Earners Unemployment Compensation (MEUC), a new benefit under the Continued Assistance for Unemployed Workers Act of 2020, provides an additional $100 of benefits per week (in addition to FPUC) for claimants who had at least $5,000 of self-employment income in the most recent tax year before they opened their claim for benefits and are receiving benefits other than PUA.  MEUC is available from December 28, 2020 to March 14, 2021, and there is no phaseout.  In effect, MEUC compensates claimants who are ineligible for PUA at a higher weekly benefit rate based on their earnings from self-employment because they have a comparatively small amount of earnings from traditional employment (enough to open a claim for regular benefits, thereby making them ineligible for PUA, but at a lower weekly benefit rate).

Lost Wages Assistance (LWA)

Lost Wages Assistance (LWA), which was authorized by the President on August 8, 2020, provided an additional $300 of benefits per week from July 27, 2020 to September 6, 2020.  LWA was funded by emergency assistance funding through FEMA.  Claimants who opened their claims before December 27, 2020 could still be eligible for LWA retroactively and/or could still receive determinations of recoverable overpayments of LWA.  LWA is not available for claims opened on or after December 27, 2020.

Partial Unemployment

Beginning January 18, 2021, the Governor has directed the Department of Labor to implement new partial unemployment rules on an emergency basis.  Under the new partial unemployment rules, claimants who work 30 or fewer hours per week and earn less than $504 will be eligible for partial benefits.  Specifically, claimants who work between 0 and 4 hours will receive their full weekly benefit rate, claimants who work between 4 and 10 hours will receive three-quarters of their weekly benefit rate, claimants who work between 10 and 20 hours will receive one-half of their weekly benefit rate, and claimants who work between 20 and 30 hours will receive one-quarter of their weekly benefit rate.  Claimants who work more than 30 hours, regardless of how much they earn, are not eligible for benefits.  Claimants who earn more than $504, regardless of how many hours they work, are not eligible for benefits.

Before January 18, 2021—and under New York law in its current form—eligibility for benefits is based on days, not hours, of work.  Claimants who work 1, 2, or 3 days and earn less than $504 are eligible for three-quarters, one-half, and one-quarter of their weekly benefit rate, respectively.  Claimants who work 4 or more days or earn more than $504, regardless of how many days they work, are not eligible for benefits.  Any work on a day—even an hour or less—counts as a day of work.  The Governor and others have introduced legislation to make the new partial unemployment rules permanent.

Overpayments and Waivers

Benefits that a claimant receives for which they were not eligible constitute an overpayment.  Pursuant to section 597(4) of the Labor Law, which applies to regular benefits and EB, overpaid benefits are recoverable unless “they were accepted by the claimant in good faith and the claimant did not make any false statement or representation and did not wilfully conceal any pertinent fact in connection with his or her claim for benefits.”  In effect, this means that a claimant who is completely truthful to the Department of Labor and receives benefits that they should not have received—perhaps because of a mere error by the Department of Labor or because the Department of Labor’s determination of eligibility is later overruled by a judge—should not need to repay them.

Section 597(4) of the Labor Law does not apply to PEUC, FPUC, PUA, or LWA.  Generally, states are required to recover overpayments of PEUC, FPUC, PUA, and LWA, regardless of the reason for the overpayment.  Reportedly, as the state worked to clear the backlog of claims at the beginning of the COVID-19 pandemic, the Department of Labor hired inexperienced representatives with limited training and hastily released benefits to claimants who were completely truthful but ineligible.  Such claimants are now receiving determinations of recoverable overpayments for the federal benefits (PEUC, FPUC, PUA, and LWA) but not the state benefits (regular benefits and EB)—an implicit acknowledgement by the Department of Labor that the claimant was not at fault for the overpayment.

The Relief for Workers Affected by Coronavirus Act permits states to waive recovery of overpayments of PEUC and FPUC where the overpayment “was without fault on the part of” the claimant, and “repayment would be contrary to equity and good conscience.”  The Continued Assistance for Unemployed Workers Act of 2020 permits states to waive recovery of overpayments of PUA and LWA for the same reasons.  The Department of Labor has yet to publish any official procedure for requesting waivers.  Until it does, it is advisable for claimants to request hearings on the determinations of recoverable overpayment and request waivers in their hearing requests.  The first element for a waiver—that the overpayment “was without fault on the part of” the claimant—is fact-specific but, in most cases, is essentially the same as the standard in section 597(4) of the Labor Law.  In the past, the Unemployment Insurance Appeal Board has interpreted “contrary to equity and good conscience” in federal statutes (most recently during the 2007-2008 financial crisis) to mean that repayment would cause the claimant to go without food, shelter, or medicine for a period of 30 days or more.

Foreign Travel

The Department of Labor has long taken the position, with approval from the Unemployment Insurance Appeal Board and the court, that a claimant who is outside of a jurisdiction that is a signatory to the Interstate Benefits Payment Plan (effectively the United States and Canada) is unable to comply with reporting requirements and therefore, ineligible for benefits, regardless of the reason for the foreign travel and the claimant’s readiness, willingness, and ability to work.  Many claimants—particularly those who were stranded abroad due to travel restrictions or would be searching for remote work, regardless of their physical location—hoped that an exception would be made for the extraordinary circumstances of COVID-19.  However, the Department of Labor has adhered to its longstanding position, and in recent decisions, the Unemployment Insurance Appeal Board sustained the Department of Labor’s determinations.  For example, in Appeal Board Case No. 612492, dated December 7, 2020, the Board held, “It is well established that a claimant who is outside of a jurisdiction which is part of the Interstate Benefits Payment Plan (“the Plan”) is neither available for work, nor able to comply with reporting requirements . . . As a matter of law, the claimant cannot receive benefits while in a country not a signatory to the Plan.  . . . The law does not provide otherwise due to an inability to return to the Unites States due to lockdown of a country due to COVID-19.”  Accordingly, any change to this rule would require legislation.

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