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Deadline extended represented by pouring more sand into hourglass

Since the pandemic began almost a year ago, there’s been a lot in the news about extended unemployment benefits (EB). We’ve had a lot of questions from our clients, so we thought you might like a summary.

The CARES Act that was signed into law in March of 2020 created two new EB categories:  Pandemic Unemployment Compensation (PUC) which added $300/week to regular state benefits, and Pandemic Emergency Unemployment Compensation (PEUC) which provided additional benefits to claimants who had exhausted regular benefits.

However, unlike the benefits mentioned above, EB programs aren’t new; they have been in place at both the state and federal levels for many years.

Most states’ unemployment legislations include the possibility of ‘regular’ state extended benefits.  State extended benefits provide an additional 13 weeks of benefits, in addition to the usual 26 weeks. They are enacted when the state unemployment rate reaches a certain point; that rate differs by state.  Some states may have EB ‘triggered on’ more frequently than others; it depends a lot on the type of industry that’s prevalent in that state, not just what’s happening on a national level.  Prior to the COVID-19 pandemic, the last time we saw a lot of states turn on EB at the same time was in the recession of 2007-2009.

Federal extended benefits are generated through passing new federal legislation and generally carry a time limitation.  Further extensions will also need to be passed via legislation.  Again, last year was the first time we’d seen this legislation for over ten years.

As you probably know, most states have said that COVID-related charges will not be charged back to employers, including the PUC and PEUC.  Even before COVID, almost 50% of states didn’t fully charge EB back to the employer.  However, if a state ends up having to borrow from the federal government because trust funds have run out, then all employers in that state will pay higher state and federal taxes.   In the end, the truth is that almost all the cost of unemployment compensation is paid by the employer.


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