Coronavirus and UI Benefits

The pandemic Coronavirus is making unprecedented changes across the world. Most of the US is in lockdown. The coronavirus and unemployment seem to have become inseparable as the figures for the latter keep rising every day.

The US has restricted people’s movement to contain the spread of the coronavirus. Naturally, this has led to many people losing jobs and others having to stay home without pay. Some companies have managed to ride the chaos with remote work.

Find out all the necessary updates about the COVID-19’s effect on unemployment and what the government is doing to deal with it. You will also find information on how you can avail of help.

Eligibility For UI Benefits For Coronavirus-Unemployment

With a record 3,283,000 UI claims being filed in the week from March 14-21, the coronavirus crisis has clearly put the historically largest number of workers into unemployment. If you were laid off or out of work due to the coronavirus crisis, file your unemployment claim right away. 

Ensure that you meet the eligibility conditions to avail of the unemployment benefits. You should be willing and able to work.

[get_eligibility_corona]

Here are the most important changes to unemployment eligibility rules made by most of the states to enable more people to file UI claims.

• The requirement of actively looking for new work opportunities has been waived.
• If you have been placed on standby by your employers (you have a tentative date of returning to work), you need not be willing to take up any suitable employment i.e available for work.
• Part-time workers, self-employed and gig workers are eligible for unemployment benefits (except a few states like Wisconsin).
• Claims can be filed even if an employer has shut down operations and no work is available, provided you meet the monetary criteria and the weekly eligibility criteria. 
• Partial unemployment due to reduced hours may make you eligible for UI if all the other criteria are met.
• Those who have been asked to stay at home without pay and telework option by their employer may be eligible for UI.
• Primary caregivers unable to go to work due to closure of care facilities may be eligible.
• Those unable to reach their workplace due to recommended quarantine or any other result of COVID-19 may be eligible for UI benefits.

Visit your state’s website to find out the specific details and updated filing rules.

Since the unemployment offices in most states are swamped by a massive rise in the number of applications, several claimants have reported that phone lines are not working. The state labor department websites have also been crashing in many places. Adding to this is the labor shortage faced by the states, with many workers quarantined or self-isolated.

Therefore, it is best for you to file your claims online. Exercise great caution and try not to make mistakes in filling out the forms. If you do, you may not be able to get them rectified as quickly as you will need the payments.

If you have just been asked to take leave and not been laid-off, you may be eligible to claim paid family and medical leave. The Families First Coronavirus Response Act provides leave for sick workers as well as those who have to care for out-of-school children. Companies have been provided exemptions if they have more than 500 employees or fewer than 50 employees, considering the business requirements. 

The new aid package provides for direct cash transfers, as elaborated below. To receive them faster, make sure that your IRS account is enabled with a direct deposit facility. If not, your checks will take much longer to arrive in the mail.

How Much Will I Get 

Find out your estimated weekly benefit amount, using this calculator.

If you were already drawing benefits or have exhausted them, make yourself familiar with Extended Benefits if your state offers them. This will come in addition to the unemployment compensation already paid by the states. 

Even if your state does not normally offer Extended Benefits (EB), the new CARES Act creates a Pandemic Unemployment Assistance program. It enables people not usually eligible for UI to receive up to 39 weeks of EB assistance (in most states). If you have exhausted your benefits you may be able to claim an additional 13 weeks provided you meet the other criteria.

Direct Cash Payments

The Coronavirus Economic Security Act provides for one-time direct cash payments to Americans to help tide over the next few unpredictable months. Here is a table that outlines the proposed checks:

Beyond $75000, the direct transfer reduces by 5% of the difference between your income and $75000.

As yet, it is not clear when people can expect the payments, but they will be based on income tax returns filed in 2019 or 2018. Again, this is over the unemployment benefits that some Americans will be able to claim. Note that this will be a one-time payment.

Policy Actions

The US government began the coronavirus mitigation efforts with most states waiving some UI eligibility conditions so that more workers laid off because of the pandemic could get compensation. Workers would be unable to find new jobs in this situation; hence the work search requirements were waived off.

The waiting period of one week after a successful claim was also cut down to help workers as soon as possible. Even workers whose employers have stopped operations temporarily can apply for UI benefits.

The Families First Coronavirus Response Act came next to help the states which needed some aid to pay the UI benefits. The law also mandates paid sick leave and family leave for caregivers. The states have to fulfill some UI application and status requirements to get additional funding. There is funding for Extended Benefits.

Coronavirus Aid, Relief, and Economic Security (CARES) Act

This Coronavirus Aid, Relief, and Economic Security (CARES) Act, a $2 trillion initiative, allocates varying amounts to support different industries threatened by the virus-induced slowdown. It also expands unemployment insurance provisions further. 

As mentioned above, the act expands coverage to the self-employed and contract workers and makes more money available to the average American, considering the current extraordinary situation. About $250 billion will be funnelled to address this need.

Small Business Administration Loans 

Saving small businesses are vital to keeping workers’ jobs intact. The CARES Act allocates about $350 billion to the Small Business Administration to help small firms. They will not have to repay their existing loans in the next six months. The following are the other important highlights:

• Considering that many small businesses have already been forced to shut, and more will be by the time the money is ready, there is an emergency grant of $10,000 each, under the Economic Injury Disaster Loan advance program. 
• This loan program gives small businesses working capital loans of up to $2 million to tide over shortages.
• SBA Debt Relief program has been instituted to pay the new loans issued before September 2020. This relieves small business owners from having to do it.
•  There is also the Express Bridge Pilot Loan program giving up to $25,000 to stem the loss of revenue while waiting for a loan from the EIDL program.

How Coronavirus Is Changing Employment Landscape

There has been a massive surge in UI applications, especially in March ever since the pandemic caused an exponential rise in layoffs. The official data shows an increase of 3,001,000 claims in the week from March 14-21. This number may be an under-estimate since many people were unable to access the websites, and many states relaxed UI rules after this date.

There are about 57 million independent contractors, gig workers, temporary and part-time workers in the U.S., making up over a third of the working population, and accounting for $1 trillion in income. Most of them have experienced a hit in terms of canceled gigs, or in the case of cab drivers, very few passengers.

Various news outlets and economic organizations have been releasing some estimates about how much unemployment will occur. Moody’s Chief Economist Mark Zandi estimates that the $2 trillion Bill may help arrest the unemployment rate at 8.6%. In its absence, the percentage may have spiked to over 20%.

There are air travel restrictions globally and hotel bookings are being canceled as people lose jobs. Therefore, Delta Airlines has reportedly placed 10,000 employees on leave without pay. The trade group, American Hotel And Lodging Association predict that 4 million jobs will be lost in the hotel industry alone. 

Furthermore, the event management sector, which hosts sporting events and festivals, is reporting a spate of cancelations, requiring them to cut costs. Cirque du Soleil has reportedly laid off more than 4000 employees.

As people have stopped dining out, 5-7 million restaurant industry jobs are at risk. The cruise line industry has also suffered huge losses. There is hardly any sector that has not been affected, including education, as universities have frozen hiring.

We will regularly update this section as more news emerges about this situation.

Keep watching this space for the latest updates on coronavirus-induced unemployment.