Hunton Employment & Labor Perspectives

Unemployment insurance is a joint federal-state program, administered separately by each state following guidelines established by federal law. On March 12, 2020, the Department of Labor (“DOL”) issued advisory guidance for state workforce agencies, suggesting ways in which the states might relax program requirements and expand benefit eligibility in light of the COVID-19 pandemic.

Unemployment program regulations require individuals to be able and available to work, and to actively seek work, in order to qualify for benefits.  States have significant flexibility in defining, interpreting and implementing these criteria, and hence in controlling the scope of eligibility for these benefits.  DOL’s recent guidance includes a variety of measures for expanding eligibility and expediting access to benefits:

• Temporarily suspend the one-week waiting period for benefits that is imposed by most state programs. This “waiting week” is designed to give states time to assess eligibility and deter fraud, as well as avoid having to process and pay benefits for very short periods (i.e., a few days) of unemployment. Waiving it facilitates the ability to comply with quarantine orders.
• Revise the definitions of “able to work” and “available to work” to include circumstances in which individuals are ill, quarantined or in self-isolation, those in which employees must stay home to take care of children because of school closures, and short-term furloughs or layoffs.
• Waive the work-search requirements for a period of benefits related to COVID-19, particularly for those whose employers expect to recall them to work within a short period of time.
• If trust funds can remain solvent, do not charge employers for benefit costs relating to COVID-19.

Most states have implemented one or more of these measures as they struggle with the swell of unemployment claims, through executive order, emergency legislation, and/or emergency regulation. Of the 44 states with waiting periods, 32 have temporarily waived them, and others appear likely to follow.  Thirty-two states and the District of Columbia have temporarily suspended, or in some manner relaxed, work search requirements. Almost every state has modified eligibility requirements so that employees out of work due to a temporary closure of their employer’s business and/or on furlough are likely eligible for benefits. Guidance for claimants in the form of FAQs, questions and answers and charts can now be found on most state development agency websites.

States with robust disability programs and paid leave laws, such as California, New York, New Jersey and Washington, are able to point employees towards such resources as the starting point for COVID-related illnesses and absences, although some of those programs are funded by payroll taxes that now will dramatically decline. It remains to be seen whether the sick and family leave provisions of the Families First Coronavirus Response Act will eventually relieve some of the pressure on state unemployment funds.