Municipal employers and non-profits often opt to reimburse the Unemployment Compensation system for claims rather than contribute a portion of each employee’s pay to the system quarterly. These “reimbursing employers” are eligible to receive a benefit under the CARES Act – reimbursement of 50% of their Unemployment claims between March 13, 2020 and December 31, 2020. The U.S. Department of Labor recently issued guidance clarifying how the reimbursement would be carried out under the legislation. The new guidance from the Department of Labor explains that reimbursing employers must first pay the full amount owed for Unemployment benefits and then the state will reimburse 50% back to those employers. This applies whether or not the claim was related to COVID-19.
The CARES Act also provides for various expansions to Unemployment Compensation (such as the $600 weekly extra payment and the expansion to 39 weeks of benefits). The DOL guidance clarifies that these payments are fully funded by the federal government and are not to be charged to reimbursing employers. (Per Executive Order 7W, “contributing employers” in Connecticut will not have their accounts charged for unemployment that is attributable to COVID-19 beginning on March 10, 2020.)
As employers navigate decisions about furloughs, layoffs, and reduction of operations, it is important to know what Unemployment benefits may be available to affected employees. The labor and employment attorneys at Berchem Moses PC can help public and private employers navigate these complex decisions.