As states closed down and businesses shuttered because of COVID-19, record numbers of the newly out-of-work people applied for unemployment insurance (UI) to help pay their bills. In the week ending March 28, 2020, the U.S. Department of Labor (DoL) announced that 6.6 million new benefit claims were filed, compared to 3.3 million the previous week.

In the week ending Sept. 16, 2021, it was reported 330,000 workers filed for unemployment benefits in their home states. Despite its decrease, these figures show that unemployment due in part to the pandemic continues to impact American workers.

Labor Department Guidance

The Labor Department provided guidance to increase the flexibility states had in administering their unemployment insurance. The Coronavirus Aid, Relief, and Economic Security (CARES) Act, a $2 trillion economic relief plan passed by Congress and signed by President Donald Trump on March 27, 2020, expanded unemployment benefits to Americans who had been affected by the coronavirus pandemic. These provisions were extended again by two other laws passed by President Trump and President Joe Biden when he assumed office.

For example, under the COVID-19 relief package signed into law by President Trump in December 2020, federal unemployment benefits, like Pandemic Unemployment Assistance (PUA), Pandemic Emergency Unemployment Compensation (PEUC), and Federal Pandemic Unemployment Compensation (FPUC) were extended for 11 weeks until March 14, 2021. The American Rescue Plan Act of 2021, signed into law on March 11, 2021, by President Biden, has extended the availability of PUA, PEUC, and FPUC through September 6, 2021.

Keep reading to learn more about the basics of how unemployment works, including the new provisions added due to the COVID-19 pandemic.

Key Takeaways

  • Unemployment insurance claims related to COVID-19 catapulted to 3.28 million in the week ending March 21, 2020.
  • The CARES Act expanded unemployment insurance eligibility to gig and freelance workers and part-time workers who were affected by the coronavirus pandemic.
  • In addition to receiving a percentage of their salary, unemployed workers who couldn't work because of COVID-19 were eligible to have $600 a week added to their checks through July 31, 2020.
  • Most states recommend applying for UI online and following website updates for news.
  • Most pandemic-related benefits ended on September 6, 2021.

Am I Eligible for Unemployment Insurance?

The CARES Act boosted the benefit amount that people could get, extended benefits, and made unemployment insurance available for groups of people who were otherwise not eligible for UI. These benefits and provisions were extended after the passing of both the Consolidated Appropriations Act and the American Rescue Plan Act of 2021. There are several different programs, so applicants should pay close attention to the details of the assistance.

Federal Pandemic Unemployment Compensation (FPUC)

Under the Federal Pandemic Unemployment Compensation (FPUC) program, unemployment benefits were supplemented by an additional $600 a week for four months. This applied to those who are eligible for benefits under the following two programs (PUA and PEUC).

The Consolidated Appropriations Act (CAA), signed by President Trump, continued providing unemployed individuals with a flat amount but reduced it from $600 to $300 each week starting Dec 26, 2020. This provision was set to expire on March 14, 2021, but was extended once again with the Biden administration's American Rescue Plan Act (ARPA).

The FPUC expired under the act on Sept. 6, 2021. Twenty-six states elected to end their enrollment in the program before this date. The best way to determine your eligibility and duration of FPUC benefits is to check your state's unemployment office website.

Pandemic Unemployment Assistance (PUA)

Under the CARES Act, freelancers and independent contractors, workers seeking part-time work, those without a substantial work history to qualify for state unemployment insurance benefits, and workers who otherwise wouldn't have qualified for benefits under state or federal law could file for unemployment insurance under the Pandemic Unemployment Assistance (PUA) program.

To qualify, individuals are required to self-certify that they are able to work, are available for work, and are unemployed, partially employed, unable, or unavailable to work because of one of these COVID-19-related scenarios:

  • You were diagnosed with COVID-19 or have symptoms of it and are trying to get diagnosed
  • A member of your household was diagnosed with COVID-19
  • You were providing care for someone diagnosed with COVID-19
  • You were providing care for a child or other household member who can't go to school or another facility because it's closed due to COVID-19
  • You were quarantined or have been advised by a health care provider to self-quarantine
  • You were scheduled to start a job and didn't have a job or couldn't reach the job due to COVID-19
  • You became the primary earner for a household because the head of household died as a direct result of COVID-19
  • You had to quit your job as a direct result of COVID-19
  • Your place of employment was closed as a direct result of COVID-19
  • You met other criteria set forth by the Secretary of Labor

Benefit amounts are calculated based on previous earnings, using a formula from the Disaster Unemployment Assistance program. A minimum benefit is available equal to 50% of the state's average weekly UI benefit (about $190 per week). The PUA program expired on Sept. 6, 2021, under the American Rescue Plan Act.

If you applied for unemployment insurance under the Pandemic Unemployment Assistance (PUA) program, check with your individual state to determine when your last PUA payment will be issued.

Pandemic Emergency Unemployment Compensation (PEUC)

States provide benefits for up to 26 weeks (see the map above), but what if you exhaust your unemployment benefits?

Under the Pandemic Emergency Unemployment Compensation (PEUC) program, you were eligible for an extra 13 weeks of UI under the CARES Act. However, you had to be "able to work, available to work, and actively seeking work." States were required to offer flexibility to applicants in meeting PEUC eligibility requirements related to "actively seeking work" if an applicant's ability to find work was affected by COVID-19.

That 13-week period was extended to 24 weeks when the CAA was signed in December 2020. President Joe Biden's American Rescue Plan added an additional 29 weeks for a total of 53 weeks for the PEUC program. The PEUC program expired on Sept. 6, 2021.

How Unemployment Insurance Is Administered

The country's unemployment insurance system is run by the individual states, which generally set up their own eligibility criteria and benefits levels and pay the actual benefits. Still, it is overseen by the federal government, which pays administrative costs and will now also pay for the added $300-per-week benefit.

This benefit, of course, replaced the original $600 weekly payment. Ordinarily, most states provide up to 26 weeks of benefits to unemployed workers to replace roughly half of their previous wages, up to a maximum benefit amount.

The amount of unemployment benefits varies widely by state. The minimums available start at $5 in Hawaii and go up to a maximum of $855 in Massachusetts.

How to Apply for Unemployment Insurance

To apply for UI, you must follow your state's guidelines, which you can link to via the DOL website, CareerOneStop. Depending on the state, you can file a claim in person, online, or over the phone. When you file a claim, you must provide your Social Security number, contact information, and details about your former employment.

In the case of the pandemic, there are several reasons due to COVID-19 that qualify you for unemployment, outside of regular unemployment criteria. These include:

  • Having to leave your job because you or a member of your family has contracted COVID-19
  • Having to provide childcare because your child's school is closed due to COVID-19
  • Resigning for a good cause like unsafe work conditions or because you are denied accommodations to work from home, in the case that you have a family member with an increased risk of death or serious illness if they contract COVID-19

You cannot claim pandemic benefits if you resign or are allowed to work from home and simply don't want to. You must provide proof you are actively looking for work opportunities after you file for unemployment, although this requirement has not been as strongly enforced during the pandemic. And if you are a freelancer, you can still qualify for benefits if you lose your job by applying for Pandemic Unemployment Assistance (PUA) benefits.

While every state has its own eligibility rules, there are a few universal steps to take to file for unemployment insurance, no matter where you reside. Before you apply, collect all the appropriate paperwork. Be prepared to file your address, telephone number, and your Social Security number. You will also need to provide the names, addresses, telephone numbers, and your employers' identification numbers (EIN) from the past 18 months. You need to provide your dates of employment and your earnings (W-2s and pay stubs) for the past 18 months.

When you have all the necessary information, you can apply online for your benefits. You will have to apply in the state that you work, not the state where you live. So if you work in New York but live in New Jersey, you will need to file for unemployment benefits in New York State.

Warning: If You Are Offered Your Old Job Back

Some people may be tempted to stay on unemployment instead of returning to work—at least through the period where FPUC provided that extra $300 per week, in addition to each state's regular unemployment payment. Be wary of following that approach. And remember, the benefits are only available until early September 2021.

Businesses who received loan forgiveness under the Paycheck Protection Program (PPP) have been pushing for an answer to whether they would lose loan forgiveness if laid-off employees refuse to return when offered their old jobs back (the extra payments mean many are making more on unemployment than they did at work). The Treasury Department issued an FAQ saying this would not happen if they make a good-faith, written offer to rehire a laid-off employee (same hours, same wages) and have documented evidence of being turned down by the employee.

But here's what that FAQ also said: "Employees and employers should be aware that employees who reject offers of re-employment may forfeit eligibility for continued unemployment compensation." In other words: Refuse to go back, and you could lose your unemployment insurance.