The New CARES ACT Significantly Increases Unemployment Benefits for Those Affected by COVID-19

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In an unprecedented expansion of unemployment insurance, the federal government will provide jobless workers an extra $600 a week on top of their state benefits through the end of July. The relief measure is part of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), a $2 trillion stimulus deal passed on March 27, 2020.

While the extra money in the CARES Act may not fully replace the lost wages of some higher-paid workers, it will significantly add to most employees’ regular state benefits – $362 per week in Michigan.

Responding to Workers’ Needs During the Coronavirus Outbreak

The massive boost in unemployment insurance, which is projected to cost about $250 billion, comes as more than three million people have filed for first-time jobless benefits. Most, if not all, of those job losses follow actions by governors around the country to shut down most non-essential businesses in their states.

Besides the enhanced checks, the relief package would add up to 13 weeks of extended benefits that the federal government will fully cover. Currently, Michigan unemployment checks extend only 26 weeks.

Not Only for Employees

The CARES ACT creates a new Pandemic Unemployment Assistance program to independent contractors, gig economy workers like Uber drivers, and the self-employed – workers who don’t typically qualify for such assistance – as well as those who are unable to work or telework because of the COVID-19 public health emergency. These benefits will mirror what’s available in an individual’s state.

The Pandemic Unemployment Assistance program not only benefits workers, as it also provides funding to reimburse nonprofits and government entities that are not part of the state unemployment system. Those organizations will receive 50% of the costs they incur through December 31, 2020, to pay unemployment benefits.

Because furloughed workers typically qualify for unemployment assistance, they will receive all of the enhanced benefits under the stimulus package.

The CARES ACT follows a different bill passed last week that provided states with $1 billion in administrative funding to run their unemployment programs, many of which have been overwhelmed by the crush of people filing for first-time benefits. The prior package also covers the states’ share of the extended jobless benefits program.

The unemployment provisions in the CARES Act would expire at the end of 2020. For more information, including the unemployment application, visit www.michigan.gov/coronavirus.

We Are Available to Help During the Coronavirus Emergency

If you have questions about employment issues resulting from the COVID-19 pandemic and Michigan’s “Stay Home, Stay Safe” shelter-in-place restrictions, the employment law attorneys at Kreis Enderle are here to counsel you regarding your rights. We are working remotely during the crisis and can conference with you by telephone or video.  To discuss your situation, please contact Jesse Young at jyoung@kehb.com or (269) 321-2311.

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