Wildfires, hurricanes, earthquakes, flooding.  What do all of these events have in common? They are natural disasters. We are seeing them across the United States right now.

Whether it is a forest fire, flooding or hurricane; natural disasters will affect many employees in many different industries.  And what happens when industries have to stop business due to these disasters? Employees need unemployment.

In most states, the former employee will be found eligible for unemployment benefits because the employee has been separated through no fault of their own.  The allowance of benefits is only reasonable as long as the former employee is able, available and actively seeking to return to work.

For employees who are not deemed eligible under their states unemployment program, the federal government does provide for them under the Disaster Unemployment Assistance (DUA).  The Disaster Relief Act of 1974 authorizes the President to provide to any individual unemployed as a result of a major natural disaster such as assistance as deemed appropriate while the individual is unemployed. In general, individuals living or working in those areas affected by a major natural disaster, who are unemployed because of the disaster, are eligible for DUA if they are not eligible for UC or other wage replacement payments and meet certain requirements. Assistance is available for a maximum of 26 weeks after the major natural disaster is declared. (1)

We are fortunate that many states have taken precautions to ensure there are clear guidelines for handling the unemployment claims received during these unfortunate events. Typically, these are states that have had natural disaster issues in the past and are protecting both the employer and the employee should the issue arise again in the future.

For employers, while we want to ensure our former employees are being taken care of, we also have a concern about how our business is going to be affected by the disaster.  Unfortunately, unemployment will be one of those concerns.  Several states have taken steps to ensure that while the former employee is allowed benefits after the natural disaster, the employer is not penalized for events that were beyond their control.

The following states grant the employer noncharging or relief of benefit charges for employees who are collecting benefits as a result of a natural disaster.  In most of the states, the natural disaster must be declared by the President of the United States of America.

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Employers are fortunate that so many states have taken steps up front to ensure employers are not affected by natural disaster. This eliminates the burden the employer would have to add to an already difficult period for their business.  We have seen that retroactive assistance can be offered by the state agency to alleviate the burden employers may face.  An example of this is the occurred in Vermont.  The Vermont Legislature passed legislation to provide partial State Unemployment Tax Act (SUTA) relief to Vermont employers impacted by the federally declared disasters of 2011 (i.e., the April and May 2011 flooding events, and Hurricane Irene in August 2011).  They gave employers until June 10, 2013, to file for the credit in an effort to stimulate the Vermont economy.

It is important to note that employers should not rely on the retroactive credits in determining the effect unemployment will have after the natural disaster.  As well, it is unfortunate to note, but there are very few states that grant relief of benefit charge to nonprofit employers such as school districts, governmental agencies and 501 (c)3 organizations.

If you have additional questions or comments, please contact your CCC Account Executive.


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