Supplemental $600 Per-week Benefit Expanded To Short-time Compensation (STC) Programs

On Thursday, April 2, the U.S. Department of Labor (USDOL) reversed its prior position and announced that the supplemental $600 per-week unemployment insurance benefit under the CARES Act (termed Federal Pandemic Unemployment Compensation, or FPUC) is expanded to apply to workers participating in a short-time compensation (STC) or “work-sharing” program.  (For more information about the CARES Act as applied to employers, click here).  The FPUC benefit is federally funded under the CARES Act and applies in addition to any benefit an individual is eligible to receive under a state unemployment insurance (UI) or STC program.

This relief is granted in part as a result of state UI programs facing unprecedented demand due to the economic effects of COVID-19, and in an effort to avoid incentivizing employers to lay-off workers in order for them to qualify for the FPUC benefit.  As background, an STC program is a lay-off aversion program where an employer, by entering into an STC Plan with the state, reduces the hours of a group of workers to avoid layoffs.  Employees qualify for a percentage of unemployment insurance benefits equal to the percentage by which their hours have been reduced.  For example, an employee whose hours are cut by 50 percent would qualify for 50 percent of the state’s established weekly UI benefit.  These programs have proven to be a “win-win-win,” as businesses retain their trained workforce, employees keep their jobs, and states save money by paying only partial unemployment claims. 

The supplemental $600 per-week benefit (FPUC) is expanded to apply to workers receiving relief under the following assistance programs: (1) regular unemployment compensation; (2) an STC program; (3) Pandemic Emergency Unemployment Compensation (PEUC), which provides for up to 13 weeks of benefits to individuals who have exhausted regular unemployment compensation under state law; (4) Pandemic Unemployment Assistance (PUA), which provides for up to 39 weeks of UI benefits to individuals not typically eligible for UI benefits, such as self-employed individuals and independent contractors; and (5) the Self Employment Assistance (SEA) program.

The FPUC benefit applies for any weeks of unemployment beginning after the date on which the state enters into an agreement with the USDOL.  Nebraska entered into an agreement with the USDOL on March 28, so the FPUC benefits applied for workers receiving UI and STC benefits beginning the week of March 29 – April 4.  The FPUC benefit will end on or before July 31, 2020.