With the coronavirus pandemic spurring a rapid increase in unemployment claims, the Department of Labor (DOL) deployed programs stemming from Congressional actions to help businesses and employees alike.
The coronavirus pandemic forced businesses, including the restaurant industry, to close shops and furlough or let go of workers. For the week ending April 4, unemployment claims reached over 6 million, bringing total job losses in less than a month to 16.8 million.
Despite the fact millions of Americans lost their jobs in connection with the coronavirus pandemic, future prospects looked even more grim.
Economists at the Federal Reserve’s St. Louis district predicted job losses could total 47 million, translating to a 32.1% unemployment rate, reported NBC News (March 30). “These are very large numbers by historical standards, but this is a rather unique shock that is unlike any other experienced by the U.S. economy in the last 100 years,” said MiguelFaria-e-Castro, St. Louis Fed economist.
Goldman Sachs Group Inc. expects the U.S. economy will shrink an annualized 34% in the second quarter, and unemployment will soar to 15% by midyear, reported Bloomberg (March 31). Additionally, a survey by The Pew Research Center asked panelists how much of an impact the coronavirus will have on the U.S. economy.
It found “nearly half (48%) say it will cause a recession, while another 17% think it will cause a depression. About a third (34%) expect a less severe economic impact and say the coronavirus will result in an economic slowdown, but not a recession or depression.”
DOL unveiled the first sets of guidance at the end of March for employers and employees to take advantage of the Families First Coronavirus Response Act (FFCRA), which took effect April 1. The guidance includes a fact sheet for employees, a fact sheet for employers, and a questions and answer document.
The department’s Wage and Hour Division (WHD) posted a temporary rule issuing regulations pursuant to this new law, saying FFCRA would help the U.S. combat the workplace effects of COVID-19 by reimbursing American private employers that have fewer than 500 employees with tax credits for the cost of providing employees with paid leave for specified reasons related to COVID-19.
The law enables employers to keep their workers on their payrolls, while at the same time ensuring that workers are not forced to choose between their paychecks and the public health measures needed to combat the virus. WHD administers the paid leave portions of the FFCRA.
“The bill provides unprecedented paid leave benefits to American workers affected by the virus, while ensuring that businesses are reimbursed dollar for dollar. This is one of a number of important actions taken to protect and sustain workers and their families during this time of need,” said Secretary of Labor Eugene Scalia.
Meanwhile, DOL published Unemployment Insurance Program Letter 14-20 (UIPL) April 2 outlining relevant provisions of the Coronavirus Aid, Relief, and Economic Security (CARES) Act related to the administration of and eligibility criteria for state unemployment insurance (UI) programs, including Pandemic Unemployment Assistance (PUA) for those not typically eligible for UI, such as gig workers, and expanded UI benefits.
The UIPL outlined several new programs under the CARES Act. PUA provided benefits for eligible individuals who are self-employed, seeking part-time employment, or who otherwise would not qualify for UI benefits under state or federal law. To be eligible, among other requirements, individuals are required to demonstrate that they were otherwise able to work and available for work within the meaning of applicable state law, except that they are unemployed, partially unemployed, or unable or unavailable to work because of COVID-19 related reasons.
Under the Federal Pandemic Unemployment Compensation (FPUC) program, eligible individuals who are collecting certain UI benefits, including regular unemployment compensation, will receive an additional $600 in federal benefits per week for weeks of unemployment ending on or before July 31.
The Pandemic Emergency Unemployment Compensation (PEUC) program will allow those who exhausted benefits under regular unemployment compensation or other programs to receive up to 13 weeks of additional benefits. States must offer flexibility in meeting PEUC eligibility requirements related to “actively seeking work” if an applicant’s ability to do so is impacted by the coronavirus.
“As workers across the country make sacrifices to combat the coronavirus, the U.S. Department of Labor is focused on supporting them and their families during a time of economic hardship,” said Sec. Scalia.