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Dinse Brief – Unemployment Compensation Expansion for COVID-19 Related Reasons

By Dinse April, 2020

As a result of the COVID-19 pandemic, most Vermont employers have had to make difficult personnel decisions.  Employers have had to reduce employee work hours, furlough employees, or conduct layoffs, all of which have resulted in workers filing claims for unemployment compensation benefits.  In response to the massive influx of these claims, lawmakers, at both the state and federal level, have been diligently working to put in place changes to the unemployment compensation laws to help both workers and employers alike.

Vermont

On March 30th, Governor Scott signed into law legislation amending the existing Unemployment Compensation Act to provide benefits and relief for individuals who have lost their jobs or otherwise had their compensation reduced for certain COVID-19 related reasons.  Typically, unemployment benefits are paid to workers who are unemployed, either totally or partially, through no fault of their own; employees who voluntarily leave their employment, absent a few exceptions, are ineligible for unemployment compensation benefits.  The recent changes to the unemployment compensation law have expanded eligibility for benefits for this group of employees.  Specifically, employees who have left their employment voluntarily for the reasons set forth below may now qualify for unemployment compensation benefits:

  • the individual has left employment to self-isolate or quarantine at the recommendation of a health care provider or pursuant to a specific recommendation, directive, or order issued by a public health authority with jurisdiction, the Governor, or the President for one of the following reasons:
    • the individual has been diagnosed with COVID-19;
    • the individual is experiencing the symptoms of COVID-19;
    • the individual has been exposed to COVID-19; or
    • the individual belongs to a specific class or group of persons that have been identified as being at high-risk if exposed to or infected with COVID-19;
  • the individual has left employment because of an unreasonable risk that the individual could be exposed to or become infected with COVID-19 at the individual’s place of employment;

the individual has left employment to care for or assist a family member of the individual who is self-isolating or quarantining at the recommendation of a health care provider or pursuant to a

specific recommendation, directive, or order issued by a public health authority with jurisdiction, the Governor, or the President for one of the following reasons:

  • the family member has been diagnosed with COVID-19;
  • the family member is experiencing the symptoms of COVID-19;
  • the family member has been exposed to COVID-19; or
  • the family member belongs to a specific class or group of persons that have been identified as being at high-risk if exposed to or infected with COVID-19;
  • the individual has left employment to care for or assist a family member who has left employment because of an unreasonable risk that they could be exposed to or become infected with COVID-19 at their place of employment; or
  • the individual left employment to care for a child under 18 years of age because the child’s school or child care has been closed or the child care provider is unavailable due to a public health emergency related to COVID-19.

The amendments to the unemployment compensation law also provide relief to employers whose workers are collecting benefits as a result of losing their job or income level for COVID-19 related reasons.  As background, unemployment benefits are funded by a payroll tax from employers.  The amount of that tax is based upon an employer’s experience rating, which is determined by the amount of unemployment benefit payments made to previous employees of the employer. The more benefit payments that are made to former employees, the higher the tax rate is for an employer.  Given the amount of benefits being paid out in the current environment, the amended law relieves an employer’s experience rating in certain COVID-19 related situations.  First, it relieves the employer’s experience rating for benefits received by employees who voluntarily end their employment for the same reasons noted above.  Second, it relieves an employer’s experience rating for up to 8 weeks for benefits received by employees for the following reasons:

  • the employer temporarily ceased operation, either partially or completely, at the individual’s place of employment in response to a request from a public health authority with jurisdiction that the employer cease operations because of COVID-19, in response to an emergency order or directive issued by the Governor or the President related to COVID-19, or because the employer voluntarily ceased operations due to the actual exposure of workers at that place of employment to COVID-19;
  • the individual becomes unemployed as a direct result of a state of emergency declared by the Governor or the President in relation to COVID19 or an order or directive issued by the Governor or President in relation to COVID-19; or
  • the individual has been recommended or requested by a medical professional or a public health authority with jurisdiction to be isolated or quarantined as a result of COVID-19, regardless of whether the individual has been diagnosed with COVID-19.

This relief, however, is conditioned on the employer rehiring or offering to rehire the former workers within a reasonable period of time after the employer resumes operations, or upon the completion of the individual’s period of isolation or quarantine.

The 8 week experience rating relief period may be extended at the discretion of the Commissioner of Labor.

Federal – CARES Act

The CARES Act, a $2 trillion federal Coronavirus aid package designed to provide support and assistance to business and workers negatively impacted by the COVID-19 pandemic, was enacted late last week.  There are many components to this massive legislation, including a significant temporary expansion of unemployment benefits, increasing not only the number of people eligible for unemployment, but also the amount of money eligible workers receive.

First, the CARES Act expands unemployment benefits to workers not traditionally eligible. This includes self-employed workers, independent contractors, gig-economy workers, and those workers not otherwise covered by state law.  Second, unemployment insurance availability is extended by 13 weeks beyond Vermont’s typical 26 week maximum duration.  Third, the CARES Act increases an eligible worker’s weekly benefit amount by $600 per week for up to four months, through 7/31/20.  Eligible workers will receive this additional benefit amount if they self-certify that they are unemployed, partially unemployed, or unable or unavailable to work because of the following:

  • they have been diagnosed with COVID-19 or have symptoms of it and are seeking diagnosis.
  • A member of their household has been diagnosed with COVID-19.
  • They are providing care for a family or household member diagnosed with COVID-19.
  • A child or other person in the household for whom they have primary caregiving responsibility is unable to attend school or another facility that is closed as a direct result of COVID-19, and such school or facility care is required for the individual to work.
  • They cannot reach the place of employment because of a quarantine imposed as a direct result of a COVID-19 outbreak or have been advised by a health care provider to self-quarantine.
  • They were scheduled to start employment and do not have a job or cannot reach their place of employment as a result of the COVID-19 public health emergency.
  • They have become the breadwinner for a household because the head of household has died as a direct result of COVID-19.
  • They had to quit their job as a direct result of COVID-19.
  • Their place of employment is closed as a direct result of COVID-19.

Workers are not eligible for the additional unemployment compensation benefit if they either can telework with pay or are receiving paid sick days or other paid leave form their employer.

For more information, or for assistance with other employment-related questions pertaining to the COVID-19 pandemic, please contact Amy McLaughlin (amclaughlin@dinse.com), Karen McAndrew (kmcandrew@dinse.com), Maggie Platzer (mplatzer@dinse.com), or Kendall Hoechst (khoechst@dinse.com).