As states close down and businesses are shuttered because of COVID-19, the illness caused by the novel coronavirus, record numbers of the newly out-of-work have been applying for unemployment insurance (UI) to help pay the bills. In the week ending March 28, 2020, the U.S. Department of Labor (DOL) announced that 6.6 million new benefit claims had been filed, while 3.3 million had filed the previous week. Some experts are predicting higher levels than the Great Depression.

The DOL has already provided new guidance to increase the flexibility that states have in administering their unemployment insurance. Now, the Coronavirus Aid, Relief, and Economic Security (CARES) Act, a $2 trillion economic relief plan passed by Congress and signed by President Trump on March 27, 2020, has expanded unemployment benefits to Americans who have been affected by the coronavirus pandemic.

As states ramp up in the face of the tsunami of claims, here is what you need to know about applying for unemployment insurance right now.

Key Takeaways

  • Unemployment insurance claims related to COVID-19 catapulted to 3.28 million in the week ending March 21, 2020.
  • The new CARES Act has expanded unemployment insurance eligibility to gig and freelance workers and part-time workers who have been affected by the coronavirus pandemic.
  • In addition to receiving a percentage of their salary, unemployed workers who can't work because of COVID-19 are eligible to have $600 a week added to their checks through July 25, 2020, or July 26, 2020.
  • Most states recommend applying for UI online and following website updates for news.

Am I Eligible for Unemployment Insurance?

The new legislation boosts the benefit amount that people can get, extends benefits, and makes unemployment insurance available for groups of people who would otherwise be ineligible for UI. There are several different programs, so pay close attention to the details of the CARES Act assistance:

Federal Pandemic Unemployment Compensation (FPUC)

Under the Federal Pandemic Unemployment Compensation (FPUC) program, unemployment benefits will be supplemented by an additional $600 a week for four months. According to the U.S. Department of Labor, "FPUC is not payable for any week of unemployment ending after July 31, 2020. Accordingly, in states where the week of unemployment ends on a Saturday, the last week that FPUC may be paid is the week ending July 25, 2020. For states where the week of unemployment ends on a Sunday, the last week that FPUC is payable is the week ending July 26, 2020." This applies to those who are eligible for benefits under the next two programs (PUA and PEUC).

Pandemic Unemployment Assistance (PUA)

Under the CARES Act, freelancers and independent contractors, workers seeking part-time work, those who don't have a long enough work history to qualify for state unemployment insurance benefits, and workers who otherwise wouldn't qualify for benefits under state or federal law can now file for unemployment insurance under the Pandemic Unemployment Assistance (PUA) program. If eligible, they can also receive $600 per week under FPUC.

To qualify, you must provide self-certification that you are able to work and available for work, and that you are unemployed, partially employed, or unable or unavailable to work because of one of these COVID-19-related scenarios:

  • You have been diagnosed with COVID-19 or have symptoms of it and are trying to get diagnosed
  • A member of your household has been diagnosed with COVID-19
  • You are providing care for someone diagnosed with COVID-19
  • You are 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 are quarantined or have been advised by a health care provider to self-quarantine
  • You were scheduled to start a job and don't have a job or can't reach the job due to COVID-19
  • You have become the primary earner for a household because the head of household has 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 is closed as a direct result of COVID-19
  • You meet other criteria set forth by the Secretary of Labor

Your benefit amount will be calculated based on previous earnings, using a formula from the Disaster Unemployment Assistance program, and there will be a minimum benefit equal to 50% of the state's average weekly UI benefit (about $190 per week).

If you have applied or are planning on applying for unemployment insurance under the Pandemic Unemployment Assistance (PUA) program, be sure to 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, below), but what if you have exhausted your unemployment benefits? Under the Pandemic Emergency Unemployment Compensation (PEUC) program, you will be eligible for an extra 13 weeks of UI, though you must be "able to work, available to work, and actively seeking work." However, states must offer flexibility to applicants in meeting PEUC eligibility requirements related to "actively seeking work" if an applicant's ability to find work is affected by COVID-19. Depending upon when you become unemployed, benefits could stretch through Dec. 31, 2020.

People who can work from home, as well as those receiving paid sick leave or paid family leave, are not eligible for unemployment insurance benefits.

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—but is overseen by the federal government, which pays administrative costs and will now also pay for the added $600-per-week benefit. 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 $1,234 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.

Anecdotal accounts are accumulating of state unemployment websites crashing and jammed phone lines, which means you likely will have to be patient. One of the problems: State unemployment offices are understaffed because head count is pegged to the unemployment rate, which had been at historically low levels before the pandemic hit. That means states are playing catch-up in trying to meet the new surge.

The New York Department of Labor website, for example, notes, "Due to enormous volume there will be considerable wait time. Please be patient; everyone who is entitled will get their benefits." New UI filers are instructed to apply for benefits on a specific day of the week according to the first letter of their last name and reassured that any claim filed "will be backdated to the date you became unemployed." As of April 8, the Colorado Department of Labor and Employment, on the other hand, tells workers affected by COVID-19, "The Coronavirus Aid, Relief, and Economic Security Act (CARES) was passed March 27 but we are not yet able to take those claims. Please rest assured that we will backdate and back pay claims as appropriate."

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 provides that extra $600 per week, in addition to each state's regular unemployment payment. Be wary of following that approach.

Businesses who are receiving 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 Dept. 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.  An "interim final rule" on this issue is coming.

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.