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The End of Federal Pandemic Benefits

Summer is winding down and with the end of summer comes the end of the Pandemic Emergency Unemployment Assistance (PEUC) for many unemployed Americans. The CARES Act provided a lifeline for unemployed Americans by providing 13 weeks of federally funded PEUC benefits to those who had already exhausted their benefits at the state level, plus an additional 13-20 weeks of federally funded Extended Benefits in states that continued to have high levels on unemployment.  These programs, combined with the regular state unemployment benefits, can provide up to 53 weeks of benefits.

On September 6, 2021, the Federal PEUC benefits (additional $300/week) and the PUA benefits that covered individuals who were not eligible for or had exhausted their regular benefits will expire in the states that have not opted out of the program early.

What Does This Mean for Me as an Employer?

Once the program ends, the burden to continue benefits is on the employee.  As employers, the only actions that you need to take are to report those individuals who refuse an offer of work and some states are asking employers to report individuals who fail to show up for scheduled interviews.   Taking these steps will aid the state unemployment agencies in making sure that only those that are eligible still receive benefits.

One area to watch is fraudulent claims. There is concern that once the Pandemic Unemployment Assistance program ends, we may see another spike in fraud claims as cybercriminals shift their focus from the benefits paid to gig workers (PUA) to the traditional unemployment programs.  According to a recent report by Bloomberg Law “Fraud rings look for easy targets that produce revenue with minimal risk,” said Douglas Holmes, president of UWC – Strategic Services on Unemployment & Workers’ Compensation, an advocacy organization for businesses. “When PUA is no longer on the board, they’ll look to other places to exploit. They’ll look to regular UI.”

Employers should pay close attention to benefit claim notices, report those that are suspicious, and alert workers that they might be victims of identity theft.  Thomas & Company should be alerted to any potential fraud claims so that we can audit the unemployment benefit charge statements to protest any questionable claims. As always, we post the most up to date information on our UI Fraud Support page https://support.thomas-and-company.com/hc/en-us/categories/1500000053821-CLAIMS-FRAUD

How will my employees that are still unemployed be impacted?

You may want to be prepared to answer any questions that come from your employees who are still unemployed.  We have outlined the changes that have taken place, or will be coming, below.

What benefits will end:

  • The Pandemic Unemployment Assistance (PUA) program for those who traditionally did not qualify for regular state benefits, such as self-employed and independent contractors, or exhausted all other benefits
  • Pandemic Emergency Unemployment Compensation Program (PEUC) that extended regular state benefits
  • Federal Pandemic Unemployment Compensation Program (FPUC), which provided an additional $300 weekly benefit payment.

PUA benefits were available for those claimants who:

  • Lost their jobs or self-employment because of the COVID-19 pandemic
  • Did not earn enough wages in the 18 months before they applied for benefits to qualify for a regular unemployment benefits claim
  • Exhausted their regular unemployment, Pandemic Emergency Unemployment Compensation (PEUC) and State Extended Benefits (EB) or did not qualify for these claims

If your employees were receiving PUA and FPUC federal benefits, once the program expires in the state, they will not receive any further pandemic program benefit payments after the expiration date, even if they had a balance remaining on their claim.

If your employee had been receiving PUA benefits, they will still be required to provide proof of employment, self-employment, or prospective employment or self-employment, even though the pandemic claims program has ended. Requests for proof of employment must be provided by the deadline indicated on the notice. This requirement remains in effect even after the PUA program ended. If they fail to provide proof, they may have to repay all PUA benefits they received from December 27, 2020, or from their initial PUA claim date.

States will also begin enforcing the work search requirements to continue benefits.  This provision was waived during the pandemic to limit the spread of COVID-19. Pre-pandemic, the requirements for unemployment were being able and available for work and actively seeking work.  States will require those still receiving benefits to prove that they are actively seeking work by logging or reporting their work search activities, registering with the state’s re-employment services, or taking advantage of other re-employment options available in the state. Failure to report adequate re-employment activities can lead to benefits being denied.

On Thursday, August 19th, Labor and Treasury Department officials announced that states can pay benefits past the September 6th expiration date by using leftover funds allocated to them through the American Rescue Plan. “Now, in states where a more gradual wind down of income support for unemployed workers makes sense based on local economic conditions, American Rescue Plan funds can be activated to cover the cost of providing assistance to unemployed workers beyond Sept. 6,” Treasury Secretary Janet Yellen and Labor Secretary Marty Walsh wrote to Senate Finance Committee Chair Ron Wyden, D-Ore., and House Ways and Means Committee Chair Richard Neal, D-Mass.

Twenty-six states opted out of federal unemployment programs early, in June and July, to try pushing jobless workers back into the labor market. Four states — Alaska, Arizona, Florida, and Ohio — only ended the extra $300 a week and kept other federal benefits intact. And state judges in Indiana, Maryland and Arkansas reversed officials’ withdrawal, reinstating the benefits.

States do not have to meet specific economic conditions to offer unemployment assistance from the leftover funds.  We will continue to monitor the situation as the deadline draws near.  If any additional actions are needed as an employer, we will provide updates as they become available.  If there are any questions, please do not hesitate to contact us or visit our website for the latest news and updates.

Josh Kendall

Author Josh Kendall

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