Unemployment Compensation Information For During COVID19 Shutdown
*Please note information is specific to Pennsylvania
UPDATED MARCH 19, 2020
With all the uncertainty and shutdowns related to COVID19, we wanted to provide employers and employees with some basic information regarding unemployment compensation eligibility and benefits in Pennsylvania. We hope this is helpful and we are available to answer questions.
Trellis is also offering a 20% discount on all flat rate legal services until March 31, 2020 for any business or non-profit with a legal need.
Unemployment Compensation Generally
In order to be eligible for unemployment compensation generally, an employee must have been laid off or had their hours reduced through no fault of their own. An employee must also meet the financial eligibility requirement.
The State determines an employee’s financial eligibility by first looking at an employee’s “base period” of employment and their gross pay during that period. That base period is the earliest 4 out of 5 complete calendar quarters before filing for benefits. During the base period, an employee must have earned at least $116 per week (these are called credit weeks) during at least 18 weeks. An employee must also have earned at least $1,688 during the highest quarter in the base period, and at least $3,391 total wages during the base period.
The total amount of unemployment compensation benefits a person may receive during the benefit year is called the “maximum benefit amount” and is dependent on the number of credit weeks during the base year multiplied by the weekly benefit rate. The maximum benefit amount may not exceed 26 times the weekly benefit rate. Employees who had less than 18 credit weeks in the base year are not eligible for unemployment compensation benefits.
Secondly, the state looks at the situation which resulted in potential eligibility. If an employee works less than their normal full-time hours through no fault of their own, they may be eligible to receive full or partial benefits, depending on their gross earnings and partial benefit credit. Full benefits are typically awarded (if eligible) if an employee is fully laid off.
Unemployment Compensation For Employees With Reduced Hours Or Other Part-Time Work
Employees that have reduced hours or other part-time work that so that they have some income, may still be qualified for some partial unemployment benefit, called the partial benefit credit.
The partial benefit credit is based on an amount equal to 30% of the weekly benefit rate. A weekly benefit rate is calculated based on the wages an employee was paid in their base year (defined and discussed above). Once an employee’s weekly benefit rate and partial benefit credit are calculated, it is awarded as follows:
If an employee’s gross earnings for a week are equal or less to the partial benefit credit amount, then the employee is still eligible for the full weekly benefit rate;
If an employee’s gross earnings for a week exceed the partial benefit credit, then the gross earnings are deducted from the sum of the weekly benefit rate plus the partial benefit rate to determine any partial benefits the employee may be eligible for (rounded up to the nearest dollar).
So, for example, if an employee’s weekly benefit rate is determined to be $100, then their partial benefit rate is $30. If the employee makes $31 in a week, it exceeds the partial benefit rate by $1 and therefore that is deducted from the benefit rate, so the employee would get $99 that week instead of $100.
If an employee’s earnings for a week are more than the partial benefit credit plus the weekly benefit rate, then they are not eligible for any UC benefits that week.
So with our example, if they made $131 or more, they would not be eligible. Remember each employee’s partial benefit rate and weekly benefit rate will vary based on their specific calculation.
Procedure if Laid Off From More Than One Job
One of the realities of the service industry is that many employees are working for more than one employer. For example, an employee may work for a restaurant and a coffee shop. In the crazy times of COVID19 it is unfortunately the case that the employee may be laid off from both jobs. The classic unemployment compensation form isn't really designed for these types of cases since employees were rarely being laid off from multiple jobs so close in time.
So what should an employee do if they are laid off by more than one job? First, they just need to file ONE unemployment compensation claim. Secondly, when filling out the claim, the employee should list their most recent employer (so if an employee got laid off Sunday by the restaurant and Wednesday by the coffee shop, then the employee should list the coffee shop as their most recent employer). The application will then ask if the employee made at least $3,366 while working at the most recent job (in our example the coffee shop).
If yes, then the employee doesn't need to list the second job, just answer that they have another job in the checkbox and he/she will report that income on the biweekly report an employee has to submit to the unemployment office. If the employee did not make $3,366 from the most recent employer then the employee should list the second job when prompted. The Office of Unemployment Compensation will then make a determination off of the information entered.
What to Do if an Employee Was Laid Off From One Job, But Still Employed at Another
Sometimes an employee will be laid off at one job, but still employed at another job, maybe with reduced hours. If this is the case, the employee can still apply for unemployment compensation basically under the same principles as described for reduced hours or additional part-time work.
Given the overload on the unemployment compensation system right now, it is better to apply even if an employee still has a second job and get a higher spot in the line than wait until that second job further reduces hours or lays the employee off. If an employee ends up being laid off from that second job, then the employee will just report that in their biweekly report to the unemployment office.
Additional Changes For COVID19 Lay Offs
Some other changes the Unemployment office has made in light of COVID19 include suspending the waiting week and waiving the work search and registration requirements. What this means is that under the previous procedures, newly unemployed individuals typically had to wait a week after unemployment before receiving unemployment benefits. Under the new procedure, this has been suspended and laid off employees are eligible their first week of unemployment.
Waiving the work search and registration requirements makes it so those receiving benefits do not have to continually show they are looking for and applying for jobs in order to continue receiving benefits. Typically, those receiving benefits had to register with PA Careerlink and demonstrate to the unemployment office that he/she was continually searching and applying for jobs. This requirement has completely been waived until further notice. However, it is important to note that benefits are not being extended past 26 weeks at this time.
In sum, in order to qualify for unemployment compensation, an employee has to meet the base income requirements. There may be other factors that also affect their eligibility, such as any other work or income they have etc. It is not recommended that employers tell all employees they are eligible for unemployment compensation, but rather say they should look into it.
However, if they meet the requirements, employees should be able to get benefits if they are laid off, lose one of their multiple jobs, or have reduced work hours if their income does not exceed their partial benefit rate and weekly benefit rate combined. Also important to note, employees must file and meet all other reporting requirements. It is on employees to keep the State updated on their current employment and income status.
If an employee is not on health insurance, it may be most beneficial to them to just lay them off so they can collect full benefits. If an employee receives health insurance, then the reduced hour calculation may be the best way to help them get benefits while still getting health insurance.
Here is a link to the State site that contains unemployment compensation information, which now includes specific information for COVID19 impacts: https://www.uc.pa.gov/Pages/default.aspx
Good luck and thinking of all of you!
DISCLAIMER: This blog post is meant for informational purposes only and does not constitute specific legal advice or create an attorney-client relationship. Readers should discuss their specific situation with an attorney.