New clarifying guidance issued by the Department of Labor
This weekend the Department of Labor (DOL) issued further guidance on the Federal Pandemic Unemployment Compensation (FPUC) Program clarifying further Section 2104 of the CARES Act. This section relates to the additional unemployment benefit issued to those employees furloughed or laid-off in recent weeks.
Based upon the information within the CARES Act and the guidance provided by the DOL, the individual states will continue to determine eligibility to receive unemployment compensation (UC).
The CARES Act has broadened the scope for determining who is eligible to receive UC benefits, and our prior advice still stands. We recommend applying for UC benefits if you are not working and your office is closed. This includes doctors who are self-employed as well as those who have paid themselves wages from their own corporation.
KEY GUIDANCE UPDATES
- Eligibility of Benefit: The additional $600 will be paid to individuals otherwise entitled to receive UC from their respective state’s UC programs. If the individual is eligible to receive at least $1 of underlying benefits for the claimed week, the claimant will receive the full $600. Anyone receiving partial UC will be eligible for the additional federal benefit.
- Methods of Payment: The states may pay the additional $600 either as a part of the regular UC benefit or in a separate payment at the same time as any regular UC payable.
- Taxability: The $600 FPUC is taxable. States must include FPUC when preparing 1099Gs and must withhold taxes from the weekly benefit amount and from the $600 FPUC, when an individual elects to have taxes withheld.
- Effective Dates: FPUC is payable for weeks of unemployment beginning on or after the date on which the state enters the program (all states have entered the program as of March 28,2020).
- In states where the week of unemployment ends on a Saturday, the first week for which FPUC may be paid is the week ending April 4, 2020, provided the state entered the program no later than March 28, 2020
- In states where the week of unemployment ends on a Sunday, the first week for which FPUC may be paid is the week ending April 5, 2020, provided the state entered the program no later than March 29, 2020
In the CARES Act it states that the Secretary of Labor has authorization to provide unemployment assistance for periods prior to the enactment of the CARES Act. The further guidance provided this weekend does not expand the benefits for periods prior to the enactment at this time. For now, employees will only receive the additional benefit for the period after the state entered into the program.
We will continue to keep you updated as additional useful and pertinent guidance is released. Please continue to look out for emails from us and bookmark out COVID-19 Resources page to stay up to date.