Last week, the federal Department of Labor issued written guidance to state unemployment offices expanding eligibility of employees and independent contractors to self-certify and qualify for Pandemic Unemployment Assistance (PUA) and requiring the states to notify each individual whose prior PUA claim had previously been rejected of the new criteria (unless that individual filed a fraudulent claim based on identity theft). Of importance to employers is that employees will be able to apply for benefits for refusing to report for work based on the current or prospective employer’s failure to comply with COVID safety standards and these benefits will be retroactive to either December 6 or to when they filed an earlier claim for PUA prior to December 27, 2020. The employees are able to self-certify their eligibility. The DOL also expanded the eligibility of employees who were otherwise disqualified from PUA due to, among other things, insufficient qualifying wages, prior disqualifications or exhaustion of benefits when “their hours have been reduced or the individual was laid off as a direct result of the COVID-19 public health emergency.” The new guidance does not change the requirements that such employees not be able to telework with pay. The DOL expects that states will need until the end of this month to modify their application systems. As stated by the DOL:
Individuals who refuse to return to work that is unsafe or accept an offer of new work that is unsafe. The Department approves the following COVID-19 related reason for an individual to self-certify for PUA eligibility: “The individual has been denied continued unemployment benefits because the individual refused to return to work or accept an offer of work at a worksite that, in either instance, is not in compliance with local, state, or national health and safety standards directly related to COVID-19. This includes, but is not limited to, those related to facial mask wearing, physical distancing measures, or the provision of personal protective equipment consistent with public health guidelines.”
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An individual is generally denied unemployment benefits if the state determines that the work is suitable and the individual did not have good cause for refusing such work. This new COVID-19 related reason applies only to individuals who had already been receiving unemployment benefits but were determined to be ineligible or disqualified under state law because they refused an offer of work at a worksite that was not in compliance with local, state, or national health and safety standards directly related to COVID-19. This is a separate COVID-19 related reason from item (ii) of Section 2102(a)(3)(A)(ii)(I) of the CARES Act, which provides eligibility to an individual who quits their job as a direct result of COVID-19.
For example, an individual may self-certify under this new COVID-19 related reason who has previously been denied because the state law does not consider health and safety standards when assessing suitability or good cause, or who has previously been denied because the health and safety standards considered under state law are more restrictive than the local, state, or national COVID-19 health standards. Below are a few non-exhaustive scenarios. See Section 4.b.iv. of this UIPL for additional details regarding PUA effective dates.
o An individual was laid off in June 2020 and began receiving regular UC. The individual was recalled to work in October 2020. However, because the worksite was not in compliance with the local mask mandate, the individual refused to return to work. The individual was disqualified from continued receipt of regular UC under state law. The individual is now eligible to apply for PUA under this new COVID-19 related reason.
o An individual was laid off in October 2020 and began receiving regular UC. The individual received a new job offer in January 2021, however, the new worksite was unsafe due to non-compliance with physical distancing measures under state law. The individual was disqualified from continued receipt of regular UC under state law. The individual is now eligible to apply for PUA under this new COVID-19 related reason.
An individual is not eligible for PUA if they are otherwise eligible for regular UC (or PEUC or EB). Many states have provisions in their state UC law that consider work that unreasonably exposes an individual to health and safety risks to be unsuitable work. The state may determine, if it is consistent with the state’s law, that the work is not suitable. Or, the state may find the work is suitable but determine that the individual had good cause for refusing such work.1 In these circumstances, the individual must continue to receive unemployment benefits, provided they are otherwise eligible. The individual is not eligible for PUA using this new COVID-19 related reason if the individual was determined eligible for continued unemployment benefits for refusal of work under state law. Moreover, an individual who is allowed continued unemployment benefits and subsequently exhausts such benefits is not eligible for PUA using this new COVID-19 related reason.
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Existing PUA claims. For individuals with a PUA claim filed on or before December 27, 2020, the expanded COVID-19 related reasons provided in Section 4.a. of this UIPL are to be applied retroactively based on the effective date of an individual’s existing PUA claim. However, if the new COVID-19 related reason applied before the effective date of the individual’s existing PUA claim, the claim must be backdated to the date that the new COVID-19 related reason applied. For example, an individual may have filed a new PUA claim before December 27, 2020 with an effective date in April 2020 based on the previous COVID-19 related reasons available. With the addition of the new COVID-19 related reason, the individual actually may have first been eligible in February 2020. Because this existing PUA claim was filed on or before December 27, 2020, the state must backdate the PUA claim from April 2020 to February 2020 – when the individual first met the applicable COVID-19 related reason.
New PUA claims. For individuals filing an initial PUA claim after December 27, 2020, states must determine PUA effective dates for new PUA claims consistent with instructions provided in Section C.15. of Attachment I to UIPL No. 16-20, Change 4. For example, if an individual files a new PUA claim after the publication of this UIPL because of circumstances occurring in July 2020, absent a PUA claim already being on file and consistent with the Continued Assistance Act, the claim effective date may not be any earlier than December 1, 2020 (weeks of unemployment beginning on or after December 6, 2020), and retroactive benefits may not be awarded prior to that date.
Because of the rampant identity theft occurring with the self-certified PUA claims, the DOL recommends and is permitting certain security measures, including:
Cross match of state unemployment claim records with respect to individuals who self-certify that they refused work that is unsafe because of the COVID-19 public health emergency.
If the state identifies any discrepancies through this cross match (e.g., the individual does not have a previous unemployment claim or the individual was disqualified for a reason other than refusing work because of health and safety standards at the worksite), the state must review information already on file and take any action necessary to address the discrepancies.
If the information on file with the state contradicts the individual’s PUA self certification (e.g., previous adjudication of the issue determined that the worksite was in compliance with health and safety standards or previous adjudication of the issue determined that the individual refused work due to a reason that was not because of unsafe working conditions), then the state has reasonable suspicion of fraud and must open an investigation to conduct fact finding to determine if the individual’s PUA eligibility is valid.
Because the PUA self-certification may be different from the state’s provisions for suitable work and good cause (e.g., the new COVID-19 related reason accounts for local, state, and national health and safety standards directly related to COVID-19), it is possible for an individual to be denied unemployment benefits under state law for health and safety standards and be eligible for PUA.
If the state does not identify any discrepancies through this cross match (e.g., the individual has a previous unemployment claim, the individual refused work because the worksite was not in compliance with health and safety standards, the individual was denied continued benefits, and the state record does not contain information which contradicts this self-certification), the state does not have reasonable suspicion of fraud to open an investigation.
NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can change or be amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.