Update on Analysis of COVID‑19 Related Unemployment and Leave Benefits

The Department of Labor provided further guidance to States in regard to administration of the programs for Pandemic Unemployment Assistance (PUA), Pandemic Emergency Unemployment Compensation (PEUC), and Federal Pandemic Unemployment Compensation (FPUC). In Unemployment Insurance Program Letters (UIPL)14-20, 15-20, and 16-20 the Department of Labor revealed important information about what to expect in relation to administration of the expanded unemployment compensation system within the Cares Act.

Pandemic Unemployment Assistance

Under the PUA program self-employed workers, independent contractors, low-wage workers and those with a limited work history will be eligible for State unemployment benefits. Workers will have to be available and able to work. Traditionally, workers would have to be searching for work as well. In lieu of this, workers will have to attest that they are unable to work for one of the COVID‑19 related reasons enumerated in the Act, specifically:

1. The individual has been diagnosed with COVID‑19 or is experiencing symptoms of COVID‑19 and is seeking a medical diagnosis;
2. A member of the individual’s household has been diagnosed with COVID‑19;
3. The individual is providing care for a family member or a member of the individual’s household who has been diagnosed with COVID‑19;
4. A child or other person in the household for which the individual has primary caregiving responsibility is unable to attend school or another facility that is closed as a direct result of the COVID‑19 public health emergency and such school or facility care is required for the individual to work;
5. The individual is unable to reach the place of employment because of a quarantine imposed as a direct result of the COVID‑19 public health emergency;
6. The individual is unable to reach the place of employment because the individual has been advised by a health care provider to self-quarantine due to concerns related to COVID‑19;
7. The individual was scheduled to commence employment and does not have a job or is unable to reach the job as a direct result of the COVID‑19 public health emergency;
8. The individual has become the breadwinner or major support for a household because the head of the household has died as a direct result of COVID‑19;
9. The individual has to quit his or her job as a direct result of COVID‑19; or
10. The individual’s place of employment is closed as a direct result of the COVID‑19 public health emergency.

Those that are able to tele-work or are receiving paid sick leave or other paid leave benefits with remuneration greater than 1.5 times their PUA rate are per se disqualified. Those that receive remuneration less than 1.5 times their PUA rate are qualified for reduced benefits.

Notably, benefits are disqualified on a week-by-week basis when the worker reports their last two weeks’ remuneration to the Unemployment Agency. Income is attributable to the week in which it is received. For example, if a self-employed worker received significant payments on an account receivable may be denied benefits in the week(s) those payments are received, while remaining eligible for other weeks in which little or no income is received.

In UIPL 16-20 the Department clarified the calculus for benefits of this newly eligible class of worker. Benefits are to be calculated in accord with the regulations for Disaster Unemployment Assistance (DUA). 20 CFR § 625.6. Pursuant to the DUA regulation, benefits due to these workers are calculated at the state’s unemployment rate. Michigan unemployment compensation is calculated by multiplying the highest amount of wages paid to the employee in one quarter of the base period (4 consecutive quarters of the last 5 quarters) by 4.1 percent. The maximum benefit payment the employee may receive is the State maximum of $362 per week.

The workers applying for PUA will use their 2019 net income as reported on their tax returns to establish their base period, benefit calculation, and average weekly compensation. Those that have not filed a tax return are supposed to be allowed to self-report and provide “documentation substantiating employment or self-employment and wages earned or paid for such employment”. In the instance of low, or no, income workers, the regulation calls for the use of the State average weekly pay (currently $ 1,037.10), which is a statistic kept by the Department of Labor.

If the worker’s wage averages to less than half the average weekly pay ($518.55), then that amount is to be used to calculate the worker’s PUA benefit. As a result of this calculation, Michigan workers will qualify for at least $276.39 and no more than $362 per week in PUA benefits. This program provides up to 39 weeks of benefits and is available starting with weeks of unemployment beginning on or after January 27, 2020 and ending on or before December 31, 2020.

The Michigan Unemployment Agency is currently reprogramming its application process to accept PUA claims and urges workers potentially covered by this program to wait until it has completed this reprogramming to apply for benefits.

Pandemic Emergency Unemployment Compensation

The PEUC program provides 13 additional weeks of regular State benefits to employees that have exhausted their State benefits. State benefits have been increased to 26 weeks (increased by 6 weeks) by Executive Order. Thus, the typical employee submitting a claim may attain up to 39 weeks of unemployment benefits. The PEUC benefits are available for unemployment weeks ending April 4, 2020 and ending on or before December 31, 2020.

Employees must able to work, available for work, and actively seeking work. However, the guidance provides that states shall offer flexibility in meeting the “actively seeking work” requirement if individuals are unable to search for work because of COVID‑19, including because of illness, quarantine, or movement restriction. Michigan job search requirements have been temporarily suspended by Executive Order.

Federal Pandemic Unemployment Compensation

The FPUC program provides an additional $600 per week to individuals who are eligible for the regular unemployment, PEUC, or PUA programs. This benefit expansion is available for weeks ending April 4, 2020 through July 25, 2020. UIPL 15-20 explains that FPUC will be fully payable for the weeks within this period in which the worker collects even partial benefits under these programs.

Key Provisions of Governor’s Executive Order 2020-36

Protecting workers who stay home, stay safe when they or their close contacts are sick

Under Executive Order 2020-36, the Governor has rendered it unlawful to discharge, discipline, or otherwise retaliate against an employee for staying home when he or she is at particular risk of infecting others with COVID‑19. The particular risk is defined as:

1. Employees who test positive for COVID‑19 or who display one or more of the principal symptoms of COVID‑19, who should remain in their home or place of residence until:
   1. three days have passed since their symptoms have resolved, and
   2. seven days have passed since their symptoms first appeared or since they were swabbed for the test that yielded the positive result.
2. Employees who have had close contact with an individual who tests positive for COVID‑19 or with an individual who displays one or more of the principal symptoms of COVID‑19 until either 14 days have passed since the last close contact with the sick or symptomatic individual, or the symptomatic individual receives a negative COVID‑19 test.

Employees taking such leave are to be treated in accord with provisions of the Michigan Paid Medical Leave Act (MCL § 408.961), which means they may use paid sick time if they have acquired it under that law. Moreover, leave is not limited as it would otherwise be under the Paid Medical Leave Act. Leave lasting beyond the dates of sick leave mandated by the Paid Medical Leave Act need not be paid additional leave. Leave mandated by this Order is to be considered a medical leave of absence. Those that refuse to return to work after the above time schedule may be disciplined or discharged without recourse.

The Department of Labor and Economic Opportunity is charged with enforcing the Order. The penalty for violation, though not expounded upon in the Order, appear to be equivalent to the Michigan Paid Medical Leave Act. The penalties for violating the Paid Medical Leave Act generally amount to restitution to the employee and possibly a fine of up to $1,000.

Various classes of essential employees are exempt from the Order, including: health care professionals, workers at a health care facility, first responders (e.g., police officers, fire fighters, paramedics), child protective service employees, workers at child caring institutions, workers at correctional facilities.