CARES Act – Enhanced Unemployment Benefits
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On Friday, March 27, 2020, Congress passed the CARES Act (the Act), and it was signed into law by President Trump. The CARES Act is a 2 trillion dollar stimulus bill designed to help Americans get through the COVID-19 crisis. Among other things, the CARES Act provides enhanced unemployment benefits to various groups of individuals to assist them during the COVID-19 crisis. Covered individuals will be able to receive their state unemployment benefit amount, plus an additional $600 during each week of unemployment. In Michigan, this could result in a total weekly unemployment benefit payment of up to $962. The CARES Act enhanced unemployment benefit provisions are briefly summarized below:
Section 2102 Benefits – Unemployment For People That Are Not Normally Eligible For Unemployment Benefits
Section 2102 of the Act provides enhanced unemployment to individuals who would not normally be eligible for unemployment benefits. This includes sole proprietors, independent contractors (1099 workers), LLC and Partnership members, Gig workers, church workers, and other individuals who normally cannot establish an unemployment claim because they have no reported wages on file with the Michigan Unemployment Insurance Agency. If these individuals are unemployed or partially unemployed due to the COVID-19 crisis, then they will be eligible to collect enhanced unemployment benefits. Enhanced unemployment benefits for these workers will be retroactive back to January 27, 2020. If these individuals can “telework for pay” or are receiving paid sick leave or another type of paid leave, then they will not be eligible to collect enhanced unemployment benefits. Per the Act, individuals covered by section 2012 can receive enhanced unemployment benefits for up to 39 weeks.
Section 2104 Benefits – Additional Money For People Who Are Eligible For Unemployment Benefits
Section 2104 of the Act provides enhanced unemployment benefits to individuals who are normally eligible for state unemployment benefits. This will cover the vast majority of unemployed or partially unemployed workers (i.e., employees receiving W-2 wages from an employer). It does not appear that enhanced unemployment benefits for these individuals under section 2104 will be retroactive, like it will be for workers covered by section 2102. Most unemployed or partially unemployed workers will receive enhanced benefits under section 2104.
Section 2107 Benefits – 13 Weeks Of Additional Benefits For People That Have Exhausted Their State Unemployment Benefits
For all individuals, section 2107 of the CARES Act also provides an additional 13 weeks of enhanced unemployment benefits once an individual’s normal state unemployment benefits are exhausted. Under Governor Whitmer’s most recent Executive Order regarding unemployment benefits, unemployed workers in Michigan can receive up to 26 weeks of state unemployment benefits. Section 2107 provides an additional 13 weeks of enhanced benefits once normal state unemployment benefits have been exhausted.
How Much Are The Enhanced Unemployment Benefits Under The CARES Act? How Long Will These Enhanced Benefits Last?
The amount of the weekly benefits that will be paid to the individuals described above (section 2102, 2104 and 2107) will be equal to: the state calculated unemployment benefit + an additional $600. In Michigan, the minimum weekly unemployment benefit is $81 and the maximum benefit is $362. An individual that worked full-time prior to unemployment will likely qualify for a weekly state unemployment benefit on the higher end of the spectrum (i.e., $300-$362/week). Therefore, unemployed workers in Michigan may be eligible to receive an enhanced weekly unemployment benefit of up to $962.
The weekly enhanced unemployment benefits under the CARES Act are scheduled to be paid up through July 31, 2020 (for 13 weeks). Although the law is unclear, it appears that the additional $600/week will end for all individuals (those covered under 2102, 2104 and 2107) on July 31, 2020. We are still awaiting guidance from the US Department of Labor and the Michigan Unemployment Insurance Agency on exactly how these benefits will be paid out to individuals and for how long.
How Will Unemployed Or Partially Unemployed Workers Receive These Enhanced Unemployment Benefits? When Can They Expect To Receive These Enhanced Benefits?
Enhanced unemployment benefits will likely be paid to workers by the Michigan Unemployment Insurance Agency through its normal state unemployment claims process. Before the enhanced benefits can be paid out, the state of Michigan must first enter into an agreement with the US Department of Labor regarding these benefits. We expect the state to enter into such an agreement soon. Realistically, enhanced unemployment benefits under the CARES Act will likely not be received by unemployed or partially unemployed workers for another 2-3 weeks. In the meantime, eligible unemployed workers will receive their normal state unemployment benefits.
We understand these are difficult times, and you need to make difficult decisions. It is Miller Johnson’s mission to keep clients informed of the ever changing legal landscape in the wake of COVID-19 so you can make the best possible decisions for your organization. Once we receive guidance from the US Department of Labor and the Michigan Unemployment Insurance Agency regarding these enhanced benefits, Miller Johnson will pass that information on to you. If you have specific questions about enhanced unemployment benefits, please contact your Miller Johnson attorney.