Changes to Unemployment During the COVID-19 Pandemic
Created by FindLaw's team of legal writers and editors | Last reviewed March 31, 2020
Unemployment claims in the U.S. soared to record highs in the wake of the COVID-19 pandemic. In response, the federal government took unprecedented steps to boost the unemployment insurance system. In this article, we discuss the ways in which unemployment insurance (UI) has changed during the pandemic. The changes are in effect through Dec. 31, 2020.
It Is Easier to Qualify for Unemployment Benefits
In response to the COVID-19 pandemic, federal lawmakers passed a historic stimulus bill, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), that super-charges unemployment benefits in the country. The changes allow many workers to qualify for unemployment benefits who wouldn't normally qualify.
The more flexible qualification rules allow self-employed and part-time workers to qualify for benefits. This includes gig workers like Uber and Lyft drivers, as well as independent contractors and freelancers, who typically are not eligible for benefits.
Additionally, workers who are partially-employed because of the pandemic can also qualify for benefits.
The Benefits Are Much Higher Than They Normally Are
The stimulus bill provides unemployed workers with an extra $600 per week for four months, on top of their regular state unemployment benefits. The goal is to provide unemployed workers with 100% of their lost wages. Traditionally, UI benefits only provide 40-45% of lost wages, depending on the state.
Benefits are calculated based on previous earnings and are capped for high-earners. For gig and part-time workers, the benefit amount will be calculated based on previous earnings and a formula from the Disaster Unemployment Assistance program.
The Benefits Will Last Longer Than They Normally Do
Under the stimulus bill, unemployed workers who qualify for benefits will be eligible for an additional 13 weeks of benefits, with a maximum total of 39 weeks.
Typically, most states allow benefits to continue for 26 weeks, though it's shorter in some states. Therefore, in states that provide benefits for 26 weeks, unemployed workers would be eligible for a total of 39 weeks, which is the maximum time benefits can continue.
Regardless of the state, the extra $600 covers weeks of unemployment for up to six months.
Do I Qualify for Unemployment Because of COVID-19?
If you have found yourself temporarily laid off or furloughed because of COVID-19, you might be wondering if you qualify for unemployment benefits. Chances are that you do qualify if you are eligible to work in the U.S.
Experts are urging people who are out of work due to COVID-19 to apply for benefits even if they aren't sure that they qualify. The Department of Labor has created an easy-to-use tool that allows you to find updates on UI changes in your state as well as apply for benefits and check on your applications, found here: CareerOneStop.org.
How to Apply for Unemployment Benefits Due to COVID-19
Applying for unemployment insurance (UI) benefits related to COVID-19 is largely the same as applying for benefits at any other time, though career center locations are closed in most states so in-person help may be limited. It is generally an easy process that does not require the help of an attorney.
Many states are encouraging applicants who have lost their jobs due to COVID-19 to file an unemployment insurance claim online for fastest service. It is also possible to apply over the phone in many cases.
Links to the online and phone unemployment application services in each state have been compiled on the Department of Labor's website CareerOneStop.org.
The website also provides links to state updates related to COVID-19 and unemployment insurance, and many other resources to help workers find jobs and training programs.
What Is Unemployment Compensation?
Unemployment insurance (UI), is a government-sponsored benefits program that provides temporary financial support to qualified workers when they lose their jobs due to no fault of their own.
Benefits are generally paid at a percentage of the worker's lost income, which is usually about 45%, but it varies by state and there is a cap. States vary in how long they provide temporary unemployment benefits. Most pay for 26 weeks, while some states pay a much shorter length, or vary the length depending on unemployment levels.
The stimulus package includes a law that supplements the benefits provided by the state, and in many cases lengthens the amount of time benefits are available. Learn more about the details here.
The UI program is managed at both the state and federal levels. It is funded by taxes collected from employers. States make their own program application procedures, but generally, the following conditions must be met to be eligible for unemployment benefits:
- The applicant is a U.S. citizen or can provide proof of the legal right to work;
- The applicant was employed for a certain length of time (determined by state rules);
- The applicant earned a certain amount in wages before unemployment (determined by state rules);
- The applicant is currently available to work immediately*; and
- The applicant is physically able to work*.
*Note: The last two conditions are likely no longer applicable because of the rule changes that have been made due to COVID-19. Visit the Department of Labor's website CareerOneStop.org for state-based updates to unemployment insurance.
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