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U.S. Labor Department Expands Eligibility for Pandemic Unemployment Benefits

    Client Alerts
  • March 04, 2021

The Pandemic Unemployment Assistance Program was a key component of last year’s Coronavirus Aid, Relief, and Economic Security (CARES) Act and was subsequently extended through March 14 of this year. Under the program, individuals who are traditionally not entitled to unemployment benefits – such as independent contractors or gig workers – are eligible for federally funded unemployment benefits if they are fully or partially unemployed due to a qualifying coronavirus-related reason. 

In addition to those reasons specifically identified in the statute, the CARES Act authorized the Department of Labor to establish other qualifying reasons. Last week, DOL exercised this authority by issuing guidance establishing the following three coronavirus-related reasons under which an individual can also collect benefits:

  1. “The individual has been denied continued unemployment benefits because the individual refused to return to work or accept an offer of work at a worksite that, in either instance, is not in compliance with local, state, or national health and safety standards directly related to COVID-19. This includes, but is not limited to, those related to facial mask wearing, physical distancing measures, or the provision of personal protective equipment consistent with public health guidelines.” Notably, this reason only applies to individuals who had been collecting unemployment benefits but were subsequently disqualified under state law for refusing an offer of work.
  2. “An individual provides services to an educational institution or educational service agency and the individual is unemployed or partially unemployed because of volatility in the work schedule that is directly caused by the COVID-19 public health emergency. This includes, but is not limited to, changes in schedules and partial closures.” 
  3. “An individual is an employee and their hours have been reduced or the individual was laid off as a direct result of the COVID-19 public health emergency.” While most employees subject to layoff would be entitled to traditional unemployment benefits, this new reason will apply to those who are not due to exhaustion of previous benefits or lack of sufficient wages. 

While some employers may worry that the expansion of the Pandemic Unemployment Assistance Program benefits will discourage workers from returning to work, this concern should be limited by the narrow tailoring of the guidance. The first new reason does not broadly apply to any worker who believes that the workplace is unsafe. Rather, individuals must show that they had previously been disqualified from receiving benefits due to their refusal to return to work. Likewise, the third new reason only applies to those workers who have already been subject to layoffs.