Joshua C. Black
Unemployment Benefits Extended: A Temporary Solution
By: Gregory C. Sinning, Esq. & Joshua C. Black, Esq.
On Saturday, August 8, 2020, the President signed four Executive Orders aimed at providing short-term relief to Americans during the pandemic. Each Executive Order focuses on temporary solutions to issues pertaining to unemployment benefits, payroll taxes, federal student loan repayments, and evictions. This article will discuss the updates made to unemployment benefits.
The CARES Act
On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (“the CARES Act”) was signed into law. Our office spoke about the CARES Act in detail in a previous article that you can find here. To briefly summarize the CARES Act, The CARES Act expanded eligibility for unemployment and provided up to an additional $600 per week in unemployment benefits to qualified workers.
Here in Arizona, a qualified applicant for unemployment earned up to $240.00 per week in benefits. When the additional funds from the federal government were added to the state allowance for unemployment, an unemployed Arizona worker could collect up to $840.00 per week in unemployment benefits.
During 2020, most states at one time or another have shut down all “non-essential” work due to the COVID-19 pandemic. In Arizona, Governor Doug Ducey (“Gov. Ducey”), ordered all Arizonans to “Stay Home, Stay Healthy, Stay Connected” for the month of April.[i] During this time, only essential businesses were allowed to remain open. This shutdown affected restaurants, movie theaters, and a slew of other places of employment. For most Arizonans, this precluded them from making a living wage or paying their bills. This additional funding from the federal government was the relief many workers needed during the pandemic.
The enhanced benefits from the federal government continued until July 31, 2020. Because Congress did not act to extend the benefits, those additional funds were no longer being disbursed as of August 1, 2020. On August 8, 2020, President Donald Trump, through the issuance of an executive order, extended federal unemployment assistance for the time being, with some major changes.
New Enhanced Benefits
Under the new system, qualifying workers are eligible for $400.00 per week of additional unemployment. To assist in funding this expansion of unemployment, President Trump is relying on the states to pay 25% of the unemployment benefits from their Coronavirus Relief Fund (“CRF”). The federal government will provide $300.00 per week and the states will be required to supply $100.00 per week.
Under the CARES Act, any person who was unemployed because of the pandemic qualified for the additional $600.00 per week. The new enhanced benefits will not be available to all non-working Americans. According to the executive order, “only ‘out-of-work’ Americans receiving $100.00 per week from state unemployment are eligible for the additional federal aid.”[ii] For example, in Arizona, your weekly Unemployment Insurance Benefit Amount (WBA) is calculated on wages you earned from employers who paid Unemployment Tax to the State of Arizona.[iii] The WBA is 4% of the wages paid in the highest quarter of your base period. The current maximum WBA is $240.
If under this calculation you do not qualify for at least $100.00, you will not be eligible for the additional funds from the federal government. If you are unsure about your eligibility, we strongly recommend you contact Arizona Department of Economic Security or an employment attorney to discuss your particular situation.
How long will it last?
As with the CARES Act, the new enhanced benefits have an expiration date. Additionally, the new enhanced benefits have a spending limit attached. The federal portion of the new benefits will be paid from the Department of Homeland Security Disaster Relief Fund (“DRF”). The funds will continue to be paid until the DRF is depleted to roughly $25 billion. Currently the DRF has $70 billion, making roughly $45 billion available to unemployed Americans.
Experts in finance have suggested this executive order is a stopgap for only a few weeks as the funds will be depleted quickly.[iv] After that time, unemployed Americans will be looking to the White House and Congress for additional assistance during these uncertain times.
If you have would like to speak with an Arizona Employment Attorney regarding your potential eligibility for unemployment under these new guidelines, please reach out to the authors. The authors can be reached at the Law Office of Joshua Black, PLC at 623-738-2225.
[i] Executive Order 2020-18. https://azgovernor.gov/executive-orders [ii] https://www.whitehouse.gov/presidential-actions/memorandum-authorizing-needs-assistance-program-major-disaster-declarations-related-coronavirus-disease-2019/?utm_source=link [iii] https://des.az.gov/services/employment/unemployment-individual/eligibility-unemployment-insurance-benefits [iv] https://www.forbes.com/sites/shaharziv/2020/08/10/400-unemployment-extension-start-trump-signs-executive-order-in-lieu-coronavirus-stimulus-package/#11feb4b747c7