By Payroll and Entitlements Editorial Staff
On March 18, 2020, President Trump signed into law a one-billion-dollar package that provides emergency grants to states for activities related to the processing and payment of unemployment benefits (UI) under certain conditions. The Emergency Unemployment Insurance Stabilization and Access Act of 2020 is incorporated into the Families First Coronavirus Response Act, 2020 (P.L. 116-127).
Additionl funding, emergency grants. Section 4102 of the Act will provide five hundred million dollars to be used to provide immediate additional funding to all states for staffing, technology, systems, and other administrative costs, so long as they met basic requirements about ensuring access to earned benefits for eligible workers.
Those requirements are:
- Require employers to provide notification of potential UI eligibility to laid-off workers;
- Ensure that workers have at least two ways (for example, online and phone) to apply for benefits; and
- Notify applicants when an application is received and being processed and if the application cannot be processed, provide information to the applicant about how to ensure successful processing.
States would be required to report on the share of eligible individuals who received UI benefits and the state’s efforts to ensure access to benefits within one year of receiving the funding. The funding would be distributed in the same proportions as regular UI administrative funding provided through annual appropriations.
Another $500 million would be reserved for emergency grants to states which experienced at least a 10-percent increase in unemployment. Those states would be eligible to receive an additional grant, in the same amount as the initial grant, to assist with costs related to the unemployment spike, and would also be required to take steps to temporarily ease eligibility requirements that are limiting access to UI during the COVID-19 outbreak, like work search requirements, required waiting periods, and requirements to increase employer UI taxes if they have high layoff rates. Depending on the state, those actions might require changes in state law, or might just require changes in state policy. This section also provides temporary federal flexibility regarding those UI restrictions which are also in federal law.
Temporary assistance for states with advances. Section 4103 provides states with access to interest-free loans to help pay regular UI benefits through December 31, 2020, if needed.
Technical assistance and guidance for short-time compensation programs. Section 4104 requires the Secretary of Labor to provide technical assistance to states that want to set up work-sharing programs, in which employers reduce hours instead of laying employees off, and then employees receive partial unemployment benefits to offset the wage loss.
Full federal funding of extended unemployment compensation for a limited period. For states that experience an increase of 10 percent or more in their unemployment rate (over the previous year) and comply with all the beneficiary access provisions in section 4102, section 4105 of the Act provides 100 percent federal funding for Extended Benefits, which normally require 50 percent of funding to come from states. Extended Benefits (EB) are triggered when unemployment is high in a state and provide up to an additional 26 weeks after regular UI benefits (usually 26 weeks) are exhausted. This section also suspends the financial penalty within EB for states that waive the usual one-week waiting period for benefits (House Appropriations Committee Title-by Title Summaary, March 2020).
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