CARES Act Expands Unemployment Insurance in Addition to State Unemployment Insurance for Wisconsin Individuals Affected by COVID-19

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law. Although the CARES Act has a number of employment-related provisions, a key part of the Act expands existing unemployment insurance (UI) programs.

Additional monetary relief for the unemployed

The CARES Act provides an additional $600 per week benefit to certain employees receiving unemployment benefits. Individuals who ordinarily would qualify for unemployment compensation benefits under state law are entitled to both:

(1) the regular amount of compensation available under state law, as well as;

(2) an additional flat-fee amount of $600 per week (called “Federal Pandemic Unemployment Compensation”).

The $600/week is payable by the state to the individual, and the state will be reimbursed by the federal government. It is not charged to the employer’s UI account. The extra $600/week benefit is available to eligible workers no matter the worker’s prior earnings or benefit level under the state program.

Expansion of individuals entitled to unemployment

In addition to people who are normally eligible for benefits, the law expands the scope of individuals who are eligible for unemployment benefits, including:

  • self-employed workers;
  • independent contractors;
  • workers who do not have long enough work histories to qualify for state benefits, and;
  • workers seeking part-time employment.

Workers must have experienced a job loss or reduced hours through no fault of their own. They must be able and available to work (as defined under existing Wisconsin state law). And a specific COVID-19-related reason must be the cause of why they cannot work, including any of the following:

  • The worker or a member of the worker’s household has been diagnosed with COVID-19;
  • The worker is providing care for a family or household member who has been diagnosed with COVID-19;
  • The worker is caring for a child (or other person for whom the worker has primary caregiving responsibilities) whose school or care facility is closed as a result of COVID-19;
  • The worker has been advised by a health care provider to self-quarantine due to COVID-19 concerns;
  • The worker’s scheduled commencement of employment has been delayed or canceled due to COVID-19;
  • The worker has become the primary breadwinner due to the death of the head of the household as a result of COVID-19, or;
  • The individual’s place of employment is closed as a result of COVID-19.

The U.S. Department of Labor announced new guidelines allowing benefits if:

  • An employer temporarily ceases operations due to COVID-19, preventing employees from coming to work;
  • An individual is quarantined with the expectation of returning to work after the quarantine is over; or
  • An individual leaves employment due to a risk of exposure or infection or to care for a family member. (In addition, Federal law does not require an employee to quit in order to receive benefits due to the impact of COVID-19.)

Wisconsin unemployment benefits expanded to a total of 39 weeks

The federal law extends state benefits to 39 weeks in place of the 26-week limit in Wisconsin. This expansion of benefits eligibility is retroactive to losses commencing on or after January 27, 2020, and continues until December 31, 2020.

In other words, if you began receiving unemployment benefits back on January 27, 2020, you will get an additional 13 weeks of unemployment added to your original 26 weeks, as long as you remain unemployed during that whole time.

However, the additional payments from the federal government (the $600/week under the CARES Act) will start from when the program kicks in. It is not retroactive, and you will not receive the $600/week for the time that you’ve previously been unemployed.

Individuals who are able to work from home with pay and workers receiving paid time off do not qualify for unemployment benefits under the CARES Act.  However, if an employee working remotely is unable to work due to becoming ill or caring for another person due to the virus, they may become eligible.

Employers are not required to pay for federal pandemic unemployment compensation

Employers do not pay anything towards the new federal unemployment benefits under the CARES Act. The federal government will be reimbursing states for the enhanced amount of unemployment compensation paid out.

Short-Time Compensation Programs are encouraged for work sharing

The CARES Act promotes the use of Short-Time Compensation (STC) arrangements, often referred to as “work sharing” or “shared work” arrangements.

The goal of STC programs is to avert layoffs, encouraging employers to retain employees on reduced hours as a means of avoiding layoffs.

To encourage states to promote existing STC programs, the federal government will reimburse a state for the total STC benefit costs under the CARES Act, up to a maximum of 26 weeks for each participant.

Questions about unemployment insurance in Wisconsin?

The employment law attorneys at Murphy Desmond are available to discuss unemployment insurance benefits for you or your employees, as well as STC programs to help retain your current staff following the COVID-19 pandemic. Call us at 608.257.7181. Our firm has offices in Madison, Janesville, Appleton, and Dodgeville, Wisconsin, to assist you with all your employment law matters.

Published April 9, 2020