This week the additional $600 of Federal Pandemic Unemployment Compensation (“FPUC”) authorized under the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act and paid to millions out of work due to the coronavirus is set to expire. After July 31, unemployment benefits will return to pre-pandemic levels.
Despite much debate and a multitude of stalled efforts, Congress has not reached a consensus on the question of whether to continue FPUC, much less in what amount or for how long. In May, Congressional Democrats unsuccessfully proposed the Health and Economic Recovery Omnibus Emergency Solutions, or HEROES, Act, which included a full extension of the $600 weekly payment through January 2021. On Monday, Senate Republicans countered with the Health, Economic Assistance, Liability Protection, and Schools, or HEALS, Act, a stimulus package that includes a $200 addition to state unemployment benefits until October 2020, with subsequent assistance equal to 70% of an individual’s prior wages until December 31, 2020. At the center of the controversy is whether the extra $600 payment provides a critical source of financial support that enables recipients to meet their basic needs or creates a disincentive for recipients to return to work.
In an earlier blog addressing COVID-19 unemployment benefits (see here), we noted that unemployment insurance varies by state and is usually determined by an individual applicant’s prior earnings and the duration the applicant held her most recent job. The CARES Act, however, provided an extension of benefits up to a maximum of 39 weeks, along with the additional $600 a week until July 31. The CARES Act also provided assistance for individuals not traditionally eligible for unemployment benefits, including gig workers, independent contractors, part-time workers and the self-employed.
Although Congress could authorize a retroactive extension of FPUC, without additional legislation, the $600 payment ends today. Other relief authorized under the CARES Act remains effective. Thus, individuals still eligible for unemployment benefits may continue to receive benefits at their state level under the CARES Act until December 31, 2020.