March 26, 2020
Kentucky and Indiana have experienced an unprecedented number of claims for unemployment insurance benefits due to layoffs related to COVID-19. Both state governments have recently taken measures to expand the scope of eligibility for unemployment insurance benefits and speed up the application process. Unemployment insurance is a “safety net” program for workers. It provides a minimum level of benefits for employees who lose their job through no fault of their own.
As part of the $2 trillion economic stimulus package that passed the U.S. Senate on March 25 and is expected to become law very soon, these unemployment insurance benefits would be materially increased. Specifically, this new federal legislation would provide up to $600 per week in additional federal benefits on top of whatever state benefits a worker would be entitled to receive. These enhanced benefits would be available for four months, and would be available to freelancers, independent contractors and furloughed employees, as well.
SKO is glad to provide the following summary information and online resources in response to widespread client requests for information about how unemployment insurance can be of assistance to their employees in recent circumstances. (Please also find at the end of this update new guidance from the U.S. Department of Labor regarding the Families First Coronavirus Response Act).
On March 16, 2020, Governor Andy Beshear issued an executive order (linked below) expanding the scope of eligibility for unemployment insurance benefits to cover employees who are quarantined or temporarily lose their jobs because of COVID-19.
Typically, when an employee files for unemployment insurance benefits they do not receive benefits for the first 7 days out of work. However, the recent executive order waived this waiting period, allowing employees to receive a full 14 days of benefits in their first payment.
Who is eligible for unemployment insurance benefits?
Generally, employees may receive unemployment insurance benefits if they are separated from work through no fault of their own. With respect to COVID-19, an employee may be eligible for unemployment insurance benefits if the employee was temporarily laid off or placed on a leave of absence because they are in quarantine mandated by a doctor because they have a confirmed case of COVID-19. An employee may also be eligible for unemployment insurance benefits if they were temporarily laid off, or had their hours materially reduced, because of a temporary shutdown due to COVID-19.
To be eligible under either of these circumstances, the employee must have reached a certain earnings level over time and must be available to return to work when there is work to be performed – for the foreseeable future, regular job search requirements have been suspended.
Who is not currently eligible for unemployment insurance benefits?
Claimants who have been separated from work for a disqualifying reason (including misconduct and a voluntary resignation), or who have not met the earnings threshold with any employer over the fifteen-month “base period” used by the state to determine eligibility and benefit levels, are not eligible for benefits. While typically independent contractors and self-employed individuals are not eligible for benefits, the Kentucky Office of Unemployment Insurance has invited both types of workers to file claims, citing special disaster provisions in state and federal law.
What is the process an employee must follow to obtain unemployment insurance benefits?
First, an individual that is laid off files an initial claim application to request unemployment insurance benefits. After a claimant files and requests payment, unemployment insurance staff will conduct an eligibility review and process the benefit request concurrently.
If unemployment insurance benefits are approved, the initial payment is authorized for 14 days of benefits. The claimant may then request benefits every two weeks for a (current) maximum of 26 weeks. The weekly benefit amount is based on the worker’s past wages and the maximum weekly benefit amount is $552 – subject to the potential federal enhancement of up to $600 per week (see above).
What should an employer do if it is planning a mass layoff?
If an employer has 100 or more employees and temporarily lays off 25 or more employees because of COVID-19, the employer should complete Kentucky’s “e-claims” process (otherwise, the affected employees should observe the process above).
The e-claims process allows the employer (instead of the employees) to directly provide information to the state about who is impacted by the layoff and eliminates the need for multiple individual claims. Normally, Kentucky requests that employers provide 4 weeks of notice prior to such a layoff, as well as a return to work date within 4 weeks; however, the 4-week-notice requirement and the return to work date within 4 weeks requirement have been waived in light of COVID-19. If an employer completes the e-claims process, the employee simply needs to go online and request benefits every two weeks.
Kentucky State Government COVID-19 page
Kentucky Chamber of Commerce March 20, 2020 Webinar on Unemployment and Federal Legislation
Kentucky Career Center – “If You Are Unemployed” page
Kentucky Office of Unemployment Insurance Claim Filing Portal
Kentucky Office of Unemployment Insurance’s Employer Guide
Kentucky Office of Unemployment Insurance’s Claimant Filing Schedule – March 23, 2020 through March 27, 2020
Governor Beshear’s March 16, 2020 Executive Order Addressing Unemployment Insurance
Similarly, Indiana is interpreting unemployment laws as broadly as possible to cover citizens out of work because of COVID-19. This coverage includes paying unemployment insurance benefits to employees who file their unemployment claims late. Additionally, Indiana is allowing citizens to accrue unemployment eligibility if they take leave from work due to COVID-19. Indiana is also seeking federal approval to provide benefits to typically non-eligible individuals, such as recent hires. Further, Indiana is not assessing experience rate penalties on businesses who lay off workers because of COVID-19.
Unlike Kentucky, Indiana has not waived the one-week waiting period for payment of unemployment insurance benefits. Therefore, benefits are not paid for the first week that an individual is eligible for benefits.
Generally, employees may receive unemployment insurance benefits if they are separated from work, or suffer a material reduction in hours, through no fault of their own. With respect to COVID-19, employees are eligible for unemployment insurance benefits if they are in quarantine based on a directive from a medical professional or their employer due to COVID-19 and are not receiving sick pay or any other leave pay from their employer. The employee must have earned enough wages to set up a claim and meet the weekly eligibility criteria. Employees must also stay in contact with their employer and be available to work when called back by the employer.
An employee is also eligible for unemployment insurance benefits if the reason the employee is out of work is because of a school or daycare closure due to COVID-19 and the employee needs to care for their children. In these circumstances, the employee must still be otherwise eligible, must not receive sick pay or other pay from their employer, and must meet the minimum amount of wages to set up a claim.
Claimants who have been separated from work for a disqualifying reason (including misconduct and a voluntary resignation), who have not earned enough wages to set up a claim, who do not meet the weekly eligibility criteria, or who are receiving sick pay or other leave from their employer are not eligible for unemployment insurance benefits. However, the facts of each circumstance are important, so employees are encouraged to file a claim and the Indiana Department of Workforce Development will evaluate the claim.
First, an individual that is laid off should immediately submit an initial claim application online to request unemployment insurance benefits (he or she may file at www.unemployment.in.gov).
A claimant must also submit vouchers on a weekly basis even if there is an issue delaying benefits or the decision is being appealed. Within 10 business days of filing a claim, the employee will receive a wage transcript and benefits computation form. After a claimant files and requests payment, unemployment insurance staff will conduct a review and determine eligibility during the first 21 business days if there are no issues with the claim.
If an employer is planning a mass layoff of approximately 50 or more employees, the Indiana Department of Workforce Development requests that the employer provide employee specific information to assist in processing claims quickly for the impacted employees. The employee specific information includes full name of the employee, employee’s SSN, last day worked, and amount of deductible income paid to claimant upon the layoff (vacation pay, sick pay, paid time off, etc.).
Indiana State Government COVID-19 Page: https://www.in.gov/coronavirus/
Indiana Department of Workforce Development (“DWD”) COVID-19 Page
Indiana Unemployment Insurance Homepage
Indiana COVID-19 Unemployment FAQ Document
Indiana DWD “One-Pager” for COVID-19 Unemployment Insurance Claimants
Indiana Unemployment Insurance Employer Handbook
Registration Site for Indiana Unemployment Compensation “Basics” Webinar on March 24, 2020 and March 25, 2020
Families First Coronavirus Response Act Update
The U.S. Department of Labor (DOL) has recently announced that law will take effect April 1, 2020 (and not April 2, 2020, as many commentators assumed) and the DOL has also issued informal FAQ-type guidance.
Stoll Keenon Ogden (SKO) is pleased to provide further client guidance, including:
1. A link to the new DOL Families First Coronavirus Response Act posting, and
2. A link to guidance from DOL regarding this posting.
Stoll Keenon Ogden understands that these are trying times for our clients and our country. Our firm operations have continued uninterrupted and our attorneys are equipped to serve as we always have – for over 120 years. If you would like to discuss unemployment insurance benefits, the effects of the COVID-19 pandemic on your operations, or any other important matters, please do not hesitate to contact your trusted SKO professional.
Please also be sure to check out the Stoll Keenon Ogden Coronavirus Resource webpage for additional articles and information related to the latest information on new laws and directives enacted by federal, state, and local governments in response to the Coronavirus pandemic.