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Posts Tagged ‘unemployment’

CARES in California: New Unemployment Benefits Available Under Federal Law

Posted on: May 8th, 2020

By: Anastasia Osbrink

With over 3.5 million unemployment claims in California since mid-March, the state is facing an historic level of payments that need to be made. In fact, the state has paid out approximately $4.5 billion, which is entirely unprecedented. Every state will be stretched thin, but at least for four months, unemployed Californians will see a significant increase in their unemployment payments thanks to the new federal Coronavirus Aid, Relief, and Economic Security Act, or the “CARES” Act. Section 2104 of the CARES Act provides that those who qualify for unemployment benefits in participating states, which now includes California, will receive their normal weekly benefit amount, plus an additional $600 per week. This additional $600 is a federal supplement, known as Pandemic Emergency Unemployment Compensation (“PEUC”). In California, the average weekly unemployment benefit is $340. As a result of the PEUC, the average unemployment benefit check in California will increase to $940. The maximum benefit in California of $450 per week will also increase to $1050. These payments will be made through the Employment Development Department’s (“EDD”) debit cards as usual.

These benefits are not retroactive, and in California, they began on Sunday, April 12, 2020. The usual one-week waiting period for benefits is eliminated under section 2105 of the CARES Act. The additional $600 is only available while the individual would normally be eligible for benefits in that state. In California, this means benefits are available for 26 weeks. However, the additional $600 will cease on July 31, 2020 pursuant to the CARES Act and after that, the employee will receive their normal unemployment payment for the remainder of the 26-week period. Once the 26-week period is over, individuals will receive their normal benefit amount (though not the additional $600 after July 31, 2020) for a 13-week period pursuant to section 2107 of the CARES Act. That benefit and the waiver of the one-week waiting period will expire on December 31, 2020.

These benefits are obviously welcome aid for unemployed Californians. However, there are many issues the State continues to face. First, the CARES Act provides benefits for the first time to contract and furloughed workers and those in the gig economy. This means a whole new category of claims to process. That, coupled with business closures and layoffs, has resulted in a huge increase in claims. The extent of delays for individuals seeking benefits remains to be seen. Many applicants are unable to reach the EDD by phone because the EDD’s phone lines are open just four hours per day. Now that millions are trying to access the EDD, many are calling on the State to expand those hours. However, those administrative costs are paid for by employers through a federal tax, and federal funding was significantly reduced over the past several years due to the boom economy. As a result, EDD staffing was cut in half in California. Thus, half the amount of EDD staff is now struggling to process millions of claims. Federal law requires 90% of claims to be processed within 21 days. California came close to that in February and has appeared to largely keep up with it in March and April thanks to a more streamlined temporary process that has been implemented. This includes waiving some verification requirements until after payments are issued, no longer requiring claimants to recertify their claims every two weeks, and processing more claims through an automated system. However, significant delays have been reported for employees who were misclassified as independent contractors by employers and did not have their wages reported to the EDD, which is doing a wage audit. Many of these claimants have reported waiting six weeks or more before receiving benefits.

Additionally, it appears likely that it will be a long time before life returns to normal (though it will certainly be a new “normal” and not the normal we used to know), and the economy will take even longer to recover. This means months, and likely years of high unemployment in the State. How that unemployment will be paid for in the long run will be a significant challenge. In an effort to address this challenge, California became the first state in the country to take out a federal loan. As of April 30th, California has borrowed $348 million from the federal government and has been approved to borrow up to $10 billion. This is not the first time the state has taken out such a loan. California borrowed $10.7 billion from the federal government during the Great Recession that it just finished paying back in 2018, including hundreds of millions of dollars in interest. As of now, this appears to be California’s best option to stay afloat during what has become the highest period of unemployment since the Great Depression. Regardless, we can appreciate the reprieve and aid offered by the CARES Act.

Additional Information:

The FMG Coronavirus Task Team will be conducting a series of webinars on Coronavirus issues on a regular basis. Topics include real estate issues, business interruption losses, and more. Click here to view upcoming webinars.

FMG has formed a Coronavirus Task Force to provide up-to-the-minute information, strategic advice, and practical solutions for our clients.  Our group is an interdisciplinary team of attorneys who can address the multitude of legal issues arising out of the coronavirus pandemic, including issues related to Healthcare, Product Liability, Tort Liability, Data Privacy, and Cyber and Local Governments.  For more information about the Task Force, click here.

You can also contact your FMG relationship partner or email the team with any questions at [email protected].

**DISCLAIMER:  The attorneys at Freeman Mathis & Gary, LLP (“FMG”) have been working hard to produce educational content to address issues arising from the concern over COVID-19.  The webinars and our written material have produced many questions. Some we have been able to answer, but many we cannot without a specific legal engagement.  We can only give legal advice to clients.  Please be aware that your attendance at one of our webinars or receipt of our written material does not establish an attorney-client relationship between you and FMG.  An attorney-client relationship will not exist unless and until an FMG partner expressly and explicitly states IN WRITING that FMG will undertake an attorney-client relationship with you, after ascertaining that the firm does not have any legal conflicts of interest.  As a result, you should not transmit any personal or confidential information to FMG unless we have entered into a formal written agreement with you.  We will continue to produce education content for the public, but we must point out that none of our webinars, articles, blog posts, or other similar material constitutes legal advice, does not create an attorney client relationship and you cannot rely on it as such.  We hope you will continue to take advantage of the conferences and materials that may pertain to your work or interests.**

What Rhode Island Employers Should Know About COVID-19

Posted on: March 19th, 2020

By: Jennifer Markowski and Catherine Scott

Governor Gina Raimondo has declared a state of emergency in the state of Rhode Island and implemented certain measures, such as the closing of public schools through April 3, that have a direct effect on Rhode Island employers. The Rhode Island Department of Labor and Training (RIDLT) continues to issue guidance to Rhode Island employers to help with these issues.

Unemployment Benefits

In light of the impact of COVID-19, many employers have needed to consider layoffs, furloughs, salary and time reductions, and other options for reducing costs.  Many affected employees are entitled to unemployment benefits.  To facilitate the receipt of benefits, RIDLT announced it would suspend the seven-day waiting period for unemployment claims related to layoffs or involuntary furlough due to COVID-19. Employers who are considering furloughs or layoffs due to COVID-19 can contact our office with any questions about these measures.

Paid Leave Benefits

Many employees in Rhode Island will be eligible to use their paid time off and/or sick leave if their offices remain open but they are unable to work due to an illness and/or childcare issues. The Healthy and Safe Families and Workplace Act provides most employees in Rhode Island with one hour of paid sick leave for every 35 hours worked up to 40 hours per year. The size of the employer will impact how the law is applied, and the waiting period will be determined by the class of the employee.

Additionally, the Coronavirus Response Act has been executed by President Trump. The federal legislation mandates that certain employers provide additional paid leave to their employers.  You can read here to find out more about the provisions and whether it applies to your business.

Temporary Disability Insurance (TDI) and Temporary Caregiver Insurance (TCI) Benefits

For employees whose offices are open but do not have access to paid leave benefits, Rhode Island offers both TDI and TCI insurance benefits. Similar to unemployment benefits, RIDLT announced it would waive the seven-day out-of-work period required before a claimant can receive TDI and/or TCI benefits. Claimants for such benefits will be allowed to temporarily qualify for benefits via self-attestation of quarantine due to COVID-19, rather than being required to supply medical certification. Moreover, employees who are required to stay home due to issues with childcare may be temporarily eligible for TCI benefits.

Unpaid Leave

We note many Rhode Island workers are likely entitled to job-protected unpaid leave under the Rhode Island Parental and Family Medical Leave Act and/or the federal Family and Medical Leave Act as it stands.

If you have questions about these laws or how they apply to your business, feel free to contact Jen Markowski at [email protected] or Cat Scott at [email protected].

Additional information: 

The FMG Coronavirus Task Team will be conducting a series of webinars on Coronavirus issues every day for the next week. We will discuss the impact of Coronavirus for companies in general, but also for business in insurance, healthcare, California specific issues, cybersecurity, and tort. Click here to register.

FMG has formed a Coronavirus Task Force to provide up-to-the-minute information, strategic advice, and practical solutions for our clients. Our group is an interdisciplinary team of attorneys who can address the multitude of legal issues arising out of the Coronavirus pandemic, including issues related to Healthcare, Product Liability, Tort Liability, Data Privacy, and Cyber and Local Governments. For more information about the Task Force, click here.

You can also contact your FMG relationship partner or email the team with any questions at [email protected].

U.S. Unemployment Rate Edged Down in February 2013

Posted on: March 29th, 2013

By: Brad Adler

The U.S. Bureau of Labor Statistics recently reported that the U.S. unemployment rate fell to 7.7 percent in February, down slightly from 7.9 percent in January, 2013. Among the major groups, the unemployment rate for Caucasians declined in February to 6.8 percent while the rates for adult men (7.1 percent), adult women (7 percent), teenagers (25.1 percent), African-Americans (13.8 percent), and Hispanics (9.6 percent) showed little or no change.

While the unemployment rate has steadily declined since it hit 10 percent at the height of the “Great Recession” in late 2009, even the current rate is dramatically higher than, for instance, the employment rate in May 2007 (4.4 percent). While commentators debate the impact of unemployment on employment discrimination claims, the EEOC’s charge statistics seem to support a direct connection. In 2007, there were 82,792 EEOC Charges filed. Only three years later and the full impact of the Great Recession hitting employers and their workforce, EEOC charge filings swelled to 99,922. All of this is to say that, while the economy has rebounded (some say only modestly) since 2009/2010, employers need to be aware that the current unemployment rate can contribute to an increased sensitivity by employees and an environment that breeds EEOC Charges.