Covid-19 and Unemployment Insurance Benefits and Paid Sick Leave

Key Points of the March 2020 federal legislation and infusion of $2 trillion into the economy:

  • Gig workers will be covered as if employees [CA already has reclassified these workers, but many states have not – yet federal law will preempt state benefit restrictions]. This extension of benefits is unprecedented.  Yes, even successful self-employed people and freelancers who see their business sudden dry up will now qualify.  What a mess for state Unemployment offices however, as they must determine the average weekly earnings of these freelancers, drivers, and other independent workers. Let’s hope the bureaucracies don’t get stuck trying to sort out this calculation as the objective is to get help to people quickly.
  • You’re eligible for up to $600 per week for up to 4 months federal subsidized U.I. benefits in addition to your state unemployment benefits. This is great news for most lower earning folks as the combined average state and federal benefit will just about equal of even slightly exceed regular earnings.  The national average unemployment benefits check is estimated to come in at about $985 per week.
  • Used to be you had to be terminated to qualify for U.I. benefits. Not so with this package.  If you’re furloughed but still employed, and therefore still covered by company benefits, such as medical, dental, vacation, PTO, etc., the federal plan will still deliver federal UI subsidized benefits. The payout will be administered however through the states UI benefit systems.
  • President Trump signed the “Families First Coronavirus Response Act” [FFCRA] on March 18, 2020 to cover businesses with fewer than 500 employees. If you have no sick leave available, or if you’re not “sick,” within the meaning of a sick leave policy or law, the FFCFA allows your small and medium sized employer to pay you during your Covid-19 absence as if sick, and to deduct 100% of the “sick leave” pay from its taxes as a tax credit.   The new law has two parts:  a sick leave component and a family leave component.
    • Sick Leave under FFCRA: What if you’re not laid off, and not “furloughed,” but under medical quarantine, unable to work remotely, and/or suspect you actually have Covid-19?  Or maybe you’ve been ordered to stay home by local, state or federal mandate?  Or maybe you’re actually sick and disabled.  The FFCFA employees can get 80 hours of sick leave (with part-time workers getting a proportionate share) at full pay, capped at $511 per day, or an aggregate $5,110 per worker. Let your company’s CFO and legal department know about this law and encourage management to consider using it to advantage.  It’s a great way to stabilize the workforce until we emerge from this crisis.  And again, without precedent, so called independent “gig workers” and self-employed individuals can use this tax credit if they are unable to perform services due to Covid-19 work restrictions.
    • Family Leave under FFCRA: Basically, this is paid family leave without the qualifying restrictions of the FMLA.  However, a company with fewer than 50 employees can apply for an “undue hardship” to business operations exemption.  Those covered by the act can get up to 12 weeks of family leave (with the first two weeks unpaid) if they must stay home with children whose schools and day care centers have closed because of the pandemic.  You’ll be paid a maximum payment of $200 per day, or an aggregate $10,000 per worker.   In other words, it’s a maximum of $1,000 per week. You’ll need to run the numbers to select between unemployment benefits and family leave.
  • The usual rule imposed by state unemployment agencies is a 7-day or more waiting period for unemployment benefits. Most states will waive that rule and the usual waiting period will be funded by the federal government.
  • Key point is of the federal law is that an able bodied worker who has not been terminated from his or her employment can still receive Covid-19 unemployment benefits if restricted from work by a shutdown, or required to home-shelter, or required to care for a family member diagnosed with the disease, or if they themselves may be awaiting a diagnosis of Covid-19 infection.

Getting COVID-19 Relief Money Through the Delivery Pipelines

So the problem in the federal government’s release of funds is not the lack of money.  There always seems to be a few trillion laying around somewhere.  The problem is the distribution of those funds through a network of understaffed unemployment offices that themselves are struggling with Covid-19.  When in doubt, make your application, and persist in tracking the payout timeline.  Check your State’s agency website for how to apply for U.I. benefits.  Give some margin, as the unemployment numbers exceed anything ever experienced in the sudden sharp rise in unemployment, even during the Great Depression.  St. Louis Federal Reserve board member Bullard last week floated the statement that unemployment could rise to 30% of the workforce.

A Final Human Note from Your Fatherly Lawyer.

Find ways healthy ways to remain calm and focused.   Prayer, meditation, exercise, hobbies, and family can keep you strong.  Daily long open-air walks or runs away from gatherings, or maybe Yoga and stretching at home, can be a great way to relieve stress and contribute to a better night’s sleep.  Explore how this time of home confinement can lead to insights and activities foreclosed by your usual life-work routines.