On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (the CARES Act) was signed into law with the goal of aiding American individuals and businesses in navigating the international crisis caused by the COVID-19 outbreak.
The CARES Act provides loans, tax and employment benefits for businesses, and unemployment, qualified plan and tax-related benefits for individuals to alleviate the economic challenges individuals and businesses are facing due to the outbreak. This article is a broad overview of key provisions of the CARES Act that might affect you as as an individual.
Eligibility for Unemployment Benefits
Covered individuals include any individual who is available to work but is unemployed or partially unemployed because of COVID-19 related reasons, including:
The individual's place of employment was shut down because of COVID-19;
The individual is providing care to a family member or member of a household who has been diagnosed with COVID-19;
The individual cannot commute to his or her work location due to an imposed COVID-19 related quarantine;
The individual is the primary caretaker of a child or other person who is unable to attend school or other facility (e.g., senior living center) because of COVID-19 and such school or facility is required for this individual to work;
The individual, or a member of the individual's household, is diagnosed with COVID-19 (or experiencing similar symptoms and seeking medical diagnosis);
The individual has been ordered by a healthcare provider to self-quarantine due to COVID-19 related concerns;
The individual becomes the primary breadwinner after the head of the household dies as a result of COVID-19;
The individual had just been hired and scheduled to start working but could not do so due to COVID-19; or
The individual has to quit as a direct result of COVID-19.
Amount and Duration of Unemployment Benefits
The CARES Act provides a maximum of 39 weeks of unemployment benefits (including the total number of weeks an individual receives under the applicable state law) for unemployment caused by COVID-19 between January 27, 2020 and December 31, 2020.
Individuals are required to first exhaust any available unemployment benefits under state law before being able to receive these new unemployment benefits; however, individuals may receive the new benefits during any state-required "waiting period."
Until July 31, 2020, unemployment benefits include the amount payable under the applicable state law plus $600 per week.
PTO Eligibility if You are Rehired
Employers with 500 or fewer employees must make rehired employees who were laid off on or after March 1, 2020 and worked at least 30 days of the last 60 calendar days prior to their layoff eligible to receive paid leave upon rehire.
Individual Rebate Checks
The CARES Act provides individuals a $1,200 ($2,400 in the case of a joint return) rebate check, with an additional $500 rebate per qualifying child. The rebate is subject to a phase-out based on income. Taxpayers with adjusted gross incomes in excess of $99,000 ($198,000 in the case of a joint return) would not receive the rebate.
Qualified Plan Withdrawals
Allows eligible participants of a qualified retirement plan (e.g., a 401k) to request a penalty-free distributions of up to $100,000 for qualifying COVID-19 related reasons, including adverse financial consequences due to being quarantined, furloughed, laid off, having work hours reduced, being unable to work due to a lack of childcare, or closing or reducing hours of a business owned or operated by the individual.
Participants may repay the amount withdrawn within three years and tax on the income from the withdrawal may be paid over a three-year period.
Frequently Asked Questions & Answers - Iowa Specific
Question 1: Can I get unemployment benefits if I am laid off due to issues related to COVID-19?
Answer: Yes. Iowa unemployment benefits are available to individuals who are unemployed through no fault of their own. If an employer must shut down operations and no work is available, its employees would be eligible for unemployment benefits if they meet the monetary criteria.
Question 2: If any employer lays of employees due to the loss of production caused by COVID-19, will the employees be eligible for unemployment insurance benefits?
Answer: Yes. Benefits are available to any individual who is unemployed through no fault of his/her own. If an employer must lay off employees due to the loss of production caused by COVID-19, individuals may be eligible for unemployment benefits if they meet the monetary criteria.
Question 3: If an employer temporarily lays off employees due to any loss or lack of work due to COVID-19, will the employees be eligible for unemployment insurance benefits?
Answer: Yes. Iowa law allows for an employee to be on temporary layoff when work is not available.
Question 4: If an asymptomatic employee imposes a self-quarantine because of the COVID-19, will they be eligible for unemployment benefits?
Answer: Maybe. If the employer allowed this individual to telework, they would not qualify for benefits because they would not be unemployed. Employees should first see if the employer will offer paid time off to cover the time the employee must be out of work.
Question 5: Can an employer require a worker to stay home for the COVID-19 incubation period?
Answer: Yes. Your employer can require you to stay at home for 14 days if you have traveled abroad or had contact with someone who visited an affected region. Please contact your employer regarding potential telecommuting, sick leave, paid time off (“PTO”), Family & Medical Leave Act (“FMLA”), Disability and other options they may be offering. If paid time off is not available, you may be eligible for unemployment benefits.
Question 6: If an employer requires a worker to stay home due to traveling abroad or being in contact with someone who visited an affected region, are they eligible for unemployment?
Answer: Yes. Your employer can require you to stay at home for 14 days if you have traveled abroad or had contact with someone who visited an affected region. Please contact your employer regarding potential telecommuting, sick leave, paid time off (“PTO”), Family & Medical Leave Act (“FMLA”), Disability and other options they may be offering. If paid time off is not available, you may be eligible for unemployment benefits.
Question 7: If an employee is in mandatory quarantine because of suspicion of having the Coronavirus, will they be eligible for unemployment benefits?
Answer: Eligibility will be determined on a case by case situation. If the suspicion of having the Coronavirus is legitimate and the facts show there is a high likelihood of being infected, the worker may be eligible for benefits for the incubation period of the virus. Please contact your employer regarding potential telecommuting, sick leave, PTO, FMLA, Disability and other options they may be offering. If paid time off is not available, you may be eligible for unemployment benefits.
Question 8: If an employee is ill because of COVID-19 and unable to work, will they be eligible for unemployment benefits?
Answer: Yes. Please contact your employer regarding potential telecommuting, sick leave, PTO, FMLA, Disability and other options they may be offering. If paid leave is not available from your employer, you will be eligible for unemployment insurance benefits if you meet all other monetary eligibility requirements.
Question 9: If an employer shuts down the business operations because an employee is sick with the COVID-19, would those other employees be eligible for Benefits?
Answer: Yes, those employees would be eligible for benefit.
Question 10: If I am unable to work due to my employer shutting down due to health concerns related to the COVID-19, do I need to complete work searches?
Answer: If you file a claim as a result of COVID-19, you will not be required to search for work. If your status changes with your employer and you do not plan on returning to work, please contact Iowa Workforce Development.
Question 11: What if an employer reduces the hours of work because business has slowed down, would the employees impacted by the reduction of hours be eligible for Benefits?
Answer: Yes. Iowa allows for partial unemployment benefits. Impacted employees would still need to report the wages earned per week when filing for benefits.
Question 12: Is the COVID-19 considered a disaster, and can I receive Disaster Unemployment Assistance if I am not eligible for unemployment insurance benefits?
Answer: A disaster has not been declared by the President for individual assistance. If the president of the United States declares the COVID-19 a national disaster, and if individuals experience a loss of work in Iowa as a result, they may be eligible for unemployment benefits and/or Disaster Unemployment Assistance.
Question 13: What if I contract the COVID-19 while on the job; would I be available for Benefits?
Answer: Please contact your employer regarding potential telecommuting, sick leave, PTO, FMLA, Disability, Worker’s Compensation and other options they may be offering. If paid time off is not available, you may be eligible for unemployment benefits.
Question 14: What if I have COVID-19 and have to quit, am I eligible for Benefits?
Answer: Each situation will be handled based on the facts of the separation. You can file for unemployment insurance benefits if you are laid off or separated from your employer and you are not currently working. A determination will be made based on the reason for separation.
Question 15: What if I have a fear of work, or doing my job because I fear that I may come into contact with the COVID-19. I don’t have an underlying medical condition, I just don’t want to work while this is going on. If I leave work or refuse to work would I be eligible for benefits?
Answer: No, the individual—not the employer—is choosing not to work and, therefore, would be ineligible. Please contact your employer regarding potential telecommuting, sick leave, PTO, FMLA, Disability and other options they may be offering.
Question 16: What if my dependent, family member or child has school cancellations and I have to stay home and care for them, would I be eligible for unemployment?
Answer: Please contact your employer regarding potential telecommuting, sick leave, PTO, FMLA, Disability and other options they may be offering. If those options are not available, you may file for unemployment insurance benefits to determine your eligibility.
Question 17: If I am currently receiving unemployment benefits and am unable to find a job due to companies not hiring because of the COVID-19, am I eligible for an extension?
Answer: There are currently no extensions to regular unemployment benefits available.
Question 18: I was diagnosed with COVID-19, and I was hospitalized and or quarantined. My employer fired me for not showing up to work or calling them. Am I eligible for benefits under this scenario?
Answer: Yes. This scenario would be treated as a separation and would be adjudicated according to Iowa Unemployment Law.
Question 19: I was possibly exposed to COVID-19 and my employer found out and told me not to come to work for 2 weeks. Am I eligible for benefits since my employer won’t let me come into work?
Answer: You should work with your employer on what leave may be available during the time they will not let you return to work. If paid time off is not available, you may be eligible for unemployment benefits.
Question 20: I was laid off due to the Coronavirus. I used some vacation time during this layoff; do I need to report this if I file for unemployment?
Answer: Vacation pay is reportable for unemployment insurance purposes.
Question 21: If needed, would RESEA and/or Promise Jobs appointments be able to be conducted via phone call?
Answer: Iowa Workforce Development is working through guidance related to programs and the use of technology for service delivery and we will update as soon as that is available.
Question 22: If colleges continue to close or go online only, how will that affect the local office as far as partner staff?
Answer: Discussions with partners and program delivery are underway, further guidance will come out as soon as available.
Question 23: With colleges considering closing and moving to all online courses. What will happen if Title I partners follow that order and do not come into the centers?
Answer: Discussions with partners and program delivery are underway, further guidance will come out as soon as available.
Question 24: I am a teacher who is on Spring Break. Am I eligible for unemployment benefits?
Answer: No, not during a scheduled break due to reasonable assurance rules but potentially after the break ends. However, if your employer recalls you, you must be able to return to work. If you are not able to return to work upon recall your eligibility for benefits could be questioned.
Question 25: I am a teacher who is off of work due to COVID-19, not a scheduled break. Am I eligible for unemployment insurance benefits during the time my school is closed?
Answer: Will you continue to be paid from the school? If the school is going to continue paying you then you would need to report your weekly earnings during this time. If the school district will not be paying you then yes, you could be potentially eligible for benefits. However, if your employer recalls you to work, you must be able to return. Otherwise your eligibility could be questioned.
Question 26: I am a teacher's aide/ para educator and my school is closed. I will not be paid for the time my school is closed. Am I eligible for unemployment insurance benefits?
Answer: If you are on a scheduled school break such as Spring Break week, you will not be eligible for that week. If you are not on a scheduled break then you would eligible for benefits. However, if your employer recalls you, you must be able to return to work. If you are not able to return to work upon recall your eligibility for benefits could be questioned.
Have questions? We have answers.
Call us at (515) 281-1475 or email us at akanne@2501grand.com.
This Wandro & Associates Update is intended to inform firm clients and friends about legal developments, including recent decisions of various courts and administrative bodies. Nothing in this Practice Update should be construed as legal advice or a legal opinion, and readers should not act upon the information contained in this Update without seeking the advice of legal counsel.
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