Unemployment Assistance Under CARES
Authors:
Anne G. Scheer, Esq.
Devin K. Bolger, Esq.
Margaret "Peg" O'Brien, Esq.
April 7, 2020
Times are tough for both employers and their employees. As the spread of COVID-19 grinds the economy to a halt, New Hampshire businesses are struggling to make payroll. At the same time, these same employers are worrying about their employees’ livelihood should a furlough, reduction in hours, or layoff be required. To address these increasing concerns, as well as the current public health crisis, Governor Sununu through Emergency Order No. 5, and the Federal government through the Coronavirus Aid, Relief, and Economic Security Act (“CARES”), have implemented expanded aid to workers through the unemployment system.
By way of these two laws, the CARES Act and Governor Sununu’s Order, eligible New Hampshire workers will receive increased weekly unemployment benefits, at a livable amount, for a longer period of time, in the event their workplaces close or reduce operations due to COVID-19. Soon after the CARES Act was signed into law, on March 30, 2020, Governor Sununu executed an agreement with the Federal government giving individuals receiving New Hampshire weekly unemployment benefits a $600 increase to their state weekly unemployment benefit amount. These changes provide a safety net for New Hampshire employees and their families, and allow New Hampshire employers to make payroll and staffing decisions without fear that they are impoverishing their employees. The goal, of course, is for all New Hampshire businesses to resume their regular operations as soon as possible.
The following questions and answers provide basic information about New Hampshire’s unemployment compensation benefit payments during this COVID-19 pandemic. New Hampshire businesses are encouraged to visit the NH Employment Security website for additional information.
Who is currently eligible for unemployment assistance?
New Hampshire law generally affords 26 weeks of unemployment assistance to workers who (a) are ready, willing and able to work, yet have experienced a reduction in hours worked and a reduction in earnings for reasons other than a “voluntary resignation” (the non-monetary eligibility requirements); and (b) have earned $1,400 in earnings in two quarters during the applicable base period (the monetary eligibility requirement). The “base period” is the first 4 of the most recent 5 quarters completed. The CARES Act has temporarily waived the monetary eligibility requirements.
In terms of the “non-monetary” eligibility requirements, Governor Sununu’s Emergency Order #5 and the CARES Act each substantially broaden the category of employees who are eligible for unemployment.
In addition to those categories of involuntarily separated employees who would have been eligible for unemployment benefits prior to COVID-19, on March 17, 2020, Governor Sununu’s Emergency Order #5 greatly expanded the category of individuals who are eligible for unemployment benefits to include all persons who have experienced unemployment due to any of the following COVID-19 related reasons:
- The individual has a current diagnosis of COVID-19;
- The individual is quarantined (including self-imposed quarantine), at the instruction of a health care provider, employer, or government official, to prevent the spread of COVID-19;
- The individual is caring for a family member or dependent who has COVID-19 or is under a quarantine related to COVID-19; or
- The individual is caring for a family member or dependent who is unable to care for
themselves due to the COVID-19 related closing of their school, child care facility, or other care program.
Following the Governor’s Emergency Order, the federal government then enacted the CARES Act which provides “Pandemic Unemployment Assistance” for individuals unable or unavailable to work or telework because:
- The individual has been diagnosed with COVID–19 or is experiencing symptoms of COVID–19 and seeking a medical diagnosis;
- A member of the individual’s household has been diagnosed with COVID–19;
- The individual is providing care for a family member or a member of the individual’s household who has been diagnosed with COVID–19;
- 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;
- 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;
- 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;
- 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;
- 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;
- The individual has to quit his or her job as a direct result of COVID–19;
- The individual’s place of employment is closed as a direct result of the COVID–19 public health emergency; or
- The individual meets any additional criteria established by the Secretary for unemployment assistance under this section
Both Emergency Order #5 and the Pandemic Unemployment Assistance Program provide unemployment benefits to a broad category of workers not traditionally entitled to such benefits, including independent contractors, gig workers, self-employed individuals, business owners, and workers who otherwise would not be eligible for unemployment because they have a limited work history or limited history of wages earned. For example, without Emergency Order #5 and the CARES Act, workers who quit their jobs to care for young children whose school closed due to COVID-19 would not have been eligible for unemployment benefits. In that case, their separation from employment likely would have been deemed a “voluntarily quit” for a reason not attributable to their employer. Note: Workers who can telecommute or are receiving paid sick leave are not eligible for these benefits.
How much money will a worker on unemployment receive?
New Hampshire’s state weekly unemployment benefits for full unemployment range from a floor of $32 (for those with annual earnings of $2,800) to a ceiling of $427 in maximum weekly benefit amounts (for those with annual earnings of $41,500 or above). A chart of maximum weekly benefits for the state is established by statute and can be found here.
The CARES Act provides that through July 31, 2020 all individuals receiving state weekly unemployment benefits will receive an additional federal weekly unemployment benefit of $600. Further, for those eligible under the CARES Act, the weekly state benefit floor is raised from $32 to $168.
Is everyone who receives state unemployment benefits eligible for the $600 federal payment?
Yes. Everyone who is receiving state unemployment benefits (full or partial) will receive the additional $600 payment, as well as those who were receiving unemployment benefits prior to the COVID-19 crisis. Anyone receiving unemployment benefits as part of the “workshare program” (see below) will also receive the $600 payment. And the $600 payment is never pro-rated. It is a fixed sum.
Is there still a 7-day waiting period before an individual is eligible to receive unemployment benefits?
No. The 7-day waiting period is waived throughout the period of the Emergency Order #5.
How long can someone receive unemployment benefits?
Generally, 26 weeks is the maximum length a worker can collect unemployment benefits in New Hampshire. However, the CARES Act extends that by an additional 13 weeks, to a maximum of 39 weeks. Note: The $600 Federal stimulus addition to unemployment weekly benefit payments will end on July 31, 2020. Weekly benefit payments thereafter will be limited to New Hampshire weekly unemployment benefit amounts. However, the weekly benefit floor of $168 for those eligible under the CARES Act will remain as such until December 31, 2020.
Will some employees earn more on unemployment than they were earning working?
Possibly, yes. From now through July 31, 2020, the addition of the federal $600 weekly stimulus to an individual’s weekly New Hampshire unemployment benefits will result in some individuals receiving more than they were being paid before their employment was suspended or ended.
Where did the amount of $600 being added to weekly unemployment benefits come from?
When the CARES Act was being negotiated in Congress, the Republicans’ initial proposal included a single payment of $600 to workers receiving unemployment. This amount was based on a 40-hour week at $15 per hour, the rate many Democrat legislators think the minimum wage should be increased to. Democrats countered with a proposed requirement that to participate in the small business loan forgiveness program (“Paycheck Protection” provided for in Title I of CARES), a business would be required to pay all of its employees a minimum wage of at least $15 per hour, and that individuals on unemployment would be paid $600 weekly in addition to their state’s weekly unemployment benefits. As a compromise, the Democrats agreed to strike their proposed $15 per hour minimum wage requirement for a business to participate in the Bill’s loan forgiveness program, and the Republicans agreed to the stimulus increase of $600 of weekly benefit payments through July 31, 2020. And, that’s how the sausage was made.
Does the Department of Employment Security make a distinction between the terms “furloughs,” “layoffs” or “reduced hours”?
No. In terms of eligibility criteria, the Department of Employment Security assesses the situation in terms of whether the individual is employed or unemployed (which can include partial or total unemployment).
If an employee’s hours are reduced, may he or she be eligible for “partial unemployment”?
Yes. If hours and pay are reduced, then the employee would be eligible to receive partial unemployment benefits if the gross wages payable to the employee for the week are less than the employee’s Weekly Benefit Amount plus 30% (“Adjusted Weekly Benefit Amount”). For example, assume an employee earns $52,000 per year. Per RSA 282-A:25, his or her Weekly Benefit Amount would be $427 in the event of full unemployment and the Adjusted Weekly Benefit Amount would be $427 + 30% = $555.10. Next assume that rather than a furlough or layoff, the employer opts to reduce the employee’s hours and pay by 50%, with the result that he or she now earns $500 per week before deductions. The Adjusted Weekly Benefit Amount ($555.10) – Gross Amount of Wages ($500) = $55.10. Therefore, $55.10 is the amount of partial state unemployment benefits due to the employee.
If the employee receives partial state unemployment through July 31, 2020, then the employee will also receive the additional $600 federal payment. In the example above, this means the employee will receive $500.00 in employer wages, plus $55.10 in state unemployment benefits, plus $600 in federal unemployment benefits, for a total of: $1,155.10.
Are there any other unemployment benefit options for a partial reduction in work hours?
Yes. The workshare program. Employers must submit an application with NH Employment Security to be approved for this program. Any employer evaluating options for a percentage decrease of hours worked by employees for their workforce should look at the workshare program. Per the workshare program, if an employer implements a partial reduction of employee hours by 10% to 50%, then those employees will qualify for that same percentage of their Weekly Benefit Amount. Take the example above. Assume the employee earns $52,000 per year and would qualify for a Weekly Benefit Amount of $427 if experiencing total unemployment. Instead, the employer has an approved workshare program and rather than furloughing or terminating the employee, the employer decides to reduce the employees’ hours and pay by 50%. In that case, the employee will receive $500 in employer wages; $213.50 in state unemployment benefits (50% of $427) plus $600 in federal unemployment benefits. The total is $1,313.50.
Does the CARES Act provide any Alternative Relief for Employers, Other than When There are Employee Lay-Offs, Furloughs and Reduced Hours?
Yes. In addition to enhancing unemployment benefits, the CARES Act includes a variety of other stimulus programs that employers should consider during these very difficult and challenging economic times as alternatives to staff reductions. Notably, the Act includes a small business forgivable loan program “Paycheck Protection,” emergency grants, and employee retention tax credits. The collective title for each of these programs is “Keeping American Workers Paid and Employed.”
Which of these unemployment benefit payments will be charged to NH employers?
Benefits paid to individuals receiving unemployment benefits under Governor Sununu’s Emergency Order #5 will be paid from New Hampshire’s Unemployment Trust Fund. Otherwise, the U.S. Treasury will pay the following unemployment benefits: benefits paid to individuals entitled to benefits under the CARES Act’s expansion of New Hampshire’s unemployment eligibility rules; the Act’s $600 stimulus addition to weekly benefits; and the Act’s extension of benefits from 26 to 39 weeks.
Do employees need to apply or do anything else to receive the $600 stimulus addition to their NH unemployment weekly benefit?
No. An employee who applies and is approved for weekly unemployment benefits will automatically receive the extra $600 stimulus payment weekly through July 31, 2020. The NH Employment Security has tutorials for first-time claimants (see here).
When will unemployed workers start to receive the $600 stimulus addition to their NH unemployment weekly benefit?
The Department expects to begin making the additional $600 payments on or around April 13, 2020 or April 14, 2020.
How will an employee receive the $600 stimulus addition to their NH unemployment weekly benefit?
The CARES Act requires that the $600 be paid at the same time and in the same manner as the State pays the person’s weekly state unemployment benefit.
Must employers provide employees with notice of their right to collect unemployment?
Yes. Starting this week, NH Employment Security will distribute to all employers a notice that they must provide to employees who are subject to a reduction in their hours and pay (full or partial) to inform them of their right to apply for unemployment benefits.
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