Today, Congress passed, and the President signed into law, the Coronavirus Aid, Relief, and Economic Security Act, H.R. 748 (the “CARES Act”).  The CARES Act is a sweeping $2.2 trillion dollar stimulus bill, designed to help American individuals and businesses weather the current COVID-19 outbreak.  To help the large number of individuals who are being laid-off or temporarily furloughed due to the associated economic slowdown, the CARES Act dramatically expands available unemployment benefits.

How does the new law expand benefits?

Part of the CARES Act, the Relief for Workers Affected by Coronavirus Act, expands short-term unemployment to provide an additional $600.00 per week for up to four (4) months to individuals who lose their job or are unable to work due to COVID-19.   This amount is provided in addition to the weekly amounts currently provided by states.  For individuals in North Carolina, this means that eligible individuals would be able to receive up to $950.00 per week.   In addition, the new law also provides funds for states to expand their state unemployment benefits for an additional 13 weeks beyond their current maximums.  The new law also authorizes the Department of Labor (“DOL”) to create regulations to allow individuals to receive such benefits for previous weeks beginning on or after January 27, 2020.

Who is eligible to receive benefits under the new law? 

The Relief for Workers Affected by Coronavirus Act also expands who is eligible to apply for unemployment benefits.  Individuals who may be eligible include people who:

• Have been diagnosed or are experiencing symptoms and are a seeking a diagnosis of COVID-19;
• Have a member of their household who has been diagnosed with COVID-19; or are providing care for a family member who has been diagnosed;
• Have to provide care for a child or other person in their household who is unable to attend school or some other care facility due to a COVID-19 closure;
• Are subject to a quarantine or have been told to self-quarantine by a health care provider;
• Have their place of employment closed as a direct result of COVID-19;
• Have become the breadwinner for their household due to the head of household dying from COVID-19;
• Have to quit their job as a direct result of COVID-19; or
• Were scheduled to commence new employment and is unable to reach the new job as a direct result of COVID-19.

Independent contractors and self-employed individuals may also qualify for benefits.  Likewise, individuals who are partially unemployed as a result of their hours being reduced due to COVID-19 may also qualify.  Importantly, individuals who are still working their regular full-time hours; who have the ability to telework with pay; or who are receiving paid leave cannot receive unemployment benefits.  

Individuals who make false statements or misrepresentations in order to receive unemployment benefits will become ineligible to receive additional payments.  They may also be prosecuted under federal law and/or required to pay back any funds they receive.

How does this new law work fit into North Carolina’s unemployment benefits program? 

As previously discussed, on March 17, 2020, Governor Roy Cooper issued an executive order making temporary changes to North Carolina’s unemployment benefits program in order to make it easier for individuals whose jobs are impacted by the coronavirus outbreak to apply for and receive benefits.  The new federal law will assist in providing those benefits to individuals.   As mentioned above, under the new law, individuals in North Carolina will be eligible to receive up to $950.00 per week for four months.

In addition to providing the $600 per week payment, the Federal Government has also agreed to cover the first week of unemployment payments provided by the state when the state agrees to waive any waiting period it has.  Under Governor Cooper’s executive order, North Carolina’s one-week waiting period was waived for COVID-19 related claims.  Under the new law, the Federal Government will pay for that week.

Finally, because North Carolina provides partial benefits to individuals who are partially unemployed, Employers faced with implementing temporary furloughs should look carefully at how best to reduce their employee’s hours in order to make sure that those employees remain eligible to receive the maximum benefits allowed under the new law.

If you have questions about the new unemployment benefits or any other parts of the CARES Act, please contact Nathan Duggins at nduggins@tuggleduggins.com  or (336) 271-5246, or Ross Hamilton at rhamilton@tuggleduggins.com or (336) 271-5279, or Denis Jacobson at djacobson@tuggleduggins.com or (336) 271-5242 or Daniel Stratton at dstratton@tuggleduggins.com or (336) 271-5240.  Please also follow our Twitter account @TuggleDuggins at https://twitter.com/TuggleDuggins for continuing, up-to-date information related to navigating the law during the COVID-19 outbreak.

© 2020 Tuggle Duggins P.A. All Rights Reserved. The purpose of this bulletin is to provide a general summary of significant legal developments. It is not intended to constitute legal advice or a recommended course of action in any given situation. It is not intended to be, and should not be, relied upon by the recipient in making decisions of a legal nature. Moreover, information contained in this bulletin may have changed subsequent to its publication. This bulletin does not create an attorney-client relationship between Tuggle Duggins P.A. and the recipient. Therefore, please consult legal counsel before making any decisions or taking any action concerning the issues discussed herein.