An Overview of the CARES Act

By Jonathan R. Ksiazek

On March 27, 2020, the President signed the Coronavirus Aid, Relief, and Economic Security Act into law (“CARES Act”). CARES Act provides an estimated $300 billion in cash payments to most individuals and $260 billion in enhanced and expanded unemployment insurance (“UI”) to millions of workers throughout the country who are being furloughed, laid off, or are without work because of the COVID-19 pandemic.

CARES Act creates three new UI programs: Pandemic Unemployment Compensation (“PUC”), Pandemic Emergency Unemployment Compensation (“PEUC”), and Pandemic Unemployment Assistance (“PUA”). All three programs are fully federally funded. This article will discuss the cash payments and all three types of UI programs.

Cash payments: Most individuals earning less than $75,000 per year can expect a one-time cash payment of $1,200. Married couples would each receive a check and families would get $500 per child. That means a family of four earning less than $150,000 can expect $3,400. The checks start to phase down after that and disappear completely for people making more than $99,000 and couples making more than $198,000 per year. The cash payments are based either on an individual’s 2018 tax return or, if already filed, their 2019 tax filings. Individuals who receive Social Security benefits but don’t file tax returns are still eligible. They don’t need to file taxes; their checks will be based on information provided by the Social Security Administration.

Pandemic Unemployment Compensation: From March 27, 2020 through July 31, 2020, all regular UI and PUA claimants will receive their usual calculated benefit plus an additional $600 per week in compensation. PUC is a flat amount to those on UI, including those who are receiving a partial unemployment benefit check. PUC also goes to those receiving the new Pandemic Unemployment Assistance program described below. PUC may be paid either with the regular UI payment or at a separate time, but it must be paid on a weekly basis.

Pandemic Emergency Unemployment Compensation:  Provides an additional 13 weeks of state UI benefits, which will become available after someone exhausts all their regular state UI benefits. Illinois offers 26 weeks of UI benefits. To receive PEUC, workers must be actively engaged in searching for work. The bill explicitly provides, however, that “a State shall provide flexibility in meeting such [work search] requirements in case of individuals unable to search for work because of COVID-19, including because of illness, quarantine, or movement restriction.” In particular, Illinois has adopted emergency rules which do not require a worker to register with its employment service provided the employee is prepared to return to work when the employer reopens.

Most states, including Illinois, have a statutory one-week “waiting period” for people to receive UI benefits. But under the CARES Act, states that waive the one-week waiting period will be fully reimbursed by the federal government for that week of benefits paid out to workers plus the administrative expenses necessary for processing those payments.

 Pandemic Unemployment Assistance: Provides emergency unemployment assistance to workers who are left out of regular state UI or who have exhausted their state UI benefits. Up to 39 weeks of PUA are available to workers who are immediately eligible to receive PUA. The program will expire on December 31, 2020, unless otherwise extended. PUA provides income support to many workers who are shut out of the state UI systems in this country. This is because workers who are eligible for state UI are not eligible for the PUA program.

“Gig” workers. Workers eligible for PUA include self-employed workers, such as independent contractors, freelancers, workers seeking part-time work, and workers who do not have a long enough work history to qualify for state UI benefits. These “gig” workers should also qualify for regular UI because of the broad definitions of employment in many state UI laws, including in Illinois. Applicants for the above benefits will need to provide self-certification that they are (1) partially or fully unemployed, OR (2) unable and unavailable to work because of one of the following circumstances:

  • They have been diagnosed with COVID-19 or have symptoms of it and are seeking diagnosis;
  • A member of their household has been diagnosed with COVID-19;
  • They are providing care for someone diagnosed with COVID-19;
  • They are providing care for a child or other household member who can’t attend school or work because it is closed due to COVID-19;
  • They are quarantined or have been advised by a health care provider to self-quarantine;
  • They were scheduled to start employment and do not have a job or cannot reach their place of employment as a result of a COVID-19 outbreak;
  • They have become the breadwinner for a household because the head of household has died as a direct result of COVID-19;
  • They had to quit their job as a direct result of COVID-19;
  • Their place of employment is closed as a direct result of COVID-19; or
  • They meet other criteria established by the Secretary of Labor.
  • Workers are not eligible for PUA if they can either telework with pay or are receiving paid sick days or paid leave. Workers must be authorized to work in the United States to be eligible for PUA, meaning that undocumented workers will not qualify.

The PUA program will run from January 27, 2020 through December 31, 2020. Workers will be eligible for retroactive benefits and can access benefits for a maximum of 39 weeks, including any weeks for which the person received regular UI. PUA benefits are calculated the same way as they are for the federal Disaster Unemployment Assistance program under the Stafford Act, which is the model for the PUA program. PUA will have a minimum benefit that is equal to one-half the state’s average weekly UI benefit (about $190 per week).


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