The CARES Act establishes a temporary pandemic unemployment program for individuals who are ineligible for regular compensation or extended benefits. The Act significantly expands the number of individuals who are eligible for unemployment benefits, including those who are not currently eligible for such benefits under state programs. The new benefits will be available from January 27, 2020 to December 31, 2020 and the CARES Act provides funding to pay for the cost of the first week of unemployment for those states that waive the one week waiting period.
Under the Act, unemployment insurance benefits for all covered individuals will increase by an additional $600 per week, this additional amount is fully covered by the federal government and is available from the date that the state enters into an agreement with the Secretary of Labor until July 31, 2020. A qualified individual will receive the additional $600 weekly payment regardless of whether the amount provides the individual more than he or she was earning while employed. The Act also extends the duration of state unemployment insurance benefits. The Act provides 13 additional weeks (in addition to the usual 26 weeks), thus extending the duration of benefits to 39 weeks.
The Act also creates a Short Time Compensation Program that provides compensation to employees who are not laid off but have suffered a reduction in pay. This program is available in states that already have this program in place. The Short Time Compensation Program will allow eligible employees to receive partial unemployment compensation benefits for lost hours.
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