Source: Posted April 8, 2020 on National Association of REALTORS®

The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) signed into law on March 27, 2020, provides relief to families, small businesses, and individuals who are self-employed and independent contractors. A key provision in the law creates a temporary “Pandemic Unemployment Assistance” program that extends unemployment benefits to those not traditionally eligible, including self-employed individuals. Below is a summary of the program, updates from Advisories issued by the U.S. Department of Labor (DOL) to state workforce agencies implementing the program.

PDF document attached

Pandemic Unemployment Compensation Eligibility

1. I’m an independent contractor, am I eligible for unemployment benefits?

The PUA program is a temporary program that provides assistance to individuals, including self-employed and independent contractors, who are fully or partially unemployed as a direct result of the COVID-19 public health emergency, beginning January 27, 2020 through December 31, 2020. Individuals who are eligible for PUA compensation are:

  • NOT eligible for regular compensation benefits or extended benefits under state or federal law; AND
  • Can self-certify that he or she is able to work, but who is unable to work due to COVID-19 such as: movement restrictions, employment closures, medical diagnoses, and quarantines. (See Question 8 below for details.)

If an individual is eligible to telework with pay, or has paid sick leave or expanded family and medical leave, they will not be eligible for unemployment assistance. Further, under the law, the U.S. Secretary of Labor is authorized to establish additional eligibility criteria.

These new benefits will be carried out through agreements between each state and the Department of Labor, where more details on eligibility are expected as these programs are implemented.

2. Where do I apply for unemployment compensation benefits?

To apply for unemployment compensation benefits, you must apply through your state labor or employment agency. To find out more information about your state unemployment office, please visit local employment benefits page at www.careeronestop.org.

Each state labor or employment agency participating in the pandemic unemployment assistance (PUA) program will have its own process for accepting unemployment compensation claims and processing those requests.  Many states are working to implement the CARES Act and are creating the proper systems to be able to accommodate all requests for unemployment compensation.  It is best to continue to check with your state labor agency or unemployment office to find out how and when to apply.

Because the unemployment claims process is now being extended to independent contractors, under the CARES Act there may be questions asked that do not apply (i.e. who is your employer). As states update their processes to extend the benefits, , these questions and claims forms may change. It is recommended that all questions be answered thoroughly and honestly for accuracy in PUA benefit determinations conducted by the state.

3. Real estate services has been deemed “essential” in my state, does this mean I’m ineligible for the new unemployment benefits for self-employed?

No. Even if real estate related activities are deemed essential, it does not necessarily mean that an individual is working and receiving compensation. For this purpose, whether an industry is “essential” is not relevant to the test as to whether an individual is eligible to receive unemployment compensation. Individuals are encouraged to apply for unemployment if they have been fully or partially unemployed due to an inability to work, as a result of the COVID-19 public health emergency.  Individuals should check with their state labor agency or unemployment office to determine eligibility and claims filing information. As additional guidance is issued from the Department of Labor on this questions, we will provide updates.

4. As an independent contractor, can I apply for unemployment compensation benefits and still accept work?

Yes. Independent contractors and self-employed individuals can apply for full or partial unemployment compensation benefits for weeks that their work has been impacted due COVID-19 if they live in a state that is participating in the pandemic unemployment assistance (PUA) program with the U.S. Department of Labor. State laws and regulations will govern the conditions related to work availability and what constitutes “active work,” while receiving unemployment benefits.

5. If I am able to telework, but unable to fully close transactions or complete work to receive compensation, am I ineligible for benefits?

No. The law states that if an individual is eligible to telework with pay, they will not be eligible for unemployment assistance. Individuals who can telework with pay for the same number of hours of work that they would normally work will not be eligible for unemployment compensation. Individuals who are able to partially telework for pay still may be eligible to apply for for “partial unemployment” benefits, if their work has been impacted as a result of the COVID-19 public health emergency. It may be useful to keep track of total hours worked to help estimate the percentage of time worked for pay, as states’ requirements for reporting unemployment eligibility vary.

6. A closing occurred prior to the effective date of the PUA program, but I have not been paid my commission. How does this impact my unemployment eligibility?

It depends! Each state labor or employment agency participating in the pandemic unemployment assistance (PUA) program will have its own system for applying, verifying, and accepting unemployment compensation claims with varied eligibility details. Without guidance from the U.S. Department of Labor or partnering states, it is unclear how earned income prior to being “out of work” may impact unemployment benefit eligibility. It is recommended to apply for the benefits, including detailed financial information for benefits calculations, which may reduce the total benefits (or not pay) for that particular week during which the compensation is received.

7. How much in unemployment benefits can I receive and for how long?

It depends! The CARES Act provides benefits of $600 per week (only through July 31, 2020, called Federal Pandemic Unemployment Compensation (FPUC) ) in addition to the amount provided under a state’s compensation law through December 31, 2020.

Typically, states base compensation amounts on an individual’s wages from their most recent tax year, and net income from all self-employment that was reported on an individual’s tax return. States compute a state weekly benefit amount for eligible individuals, based upon state law. Individuals can receive up to 39 weeks of PUA benefits through December 31, 2020. For more on state specific benefits, please visit the Department of Labor's Significant Provisions of State Unemployment Insurance Laws. The CARES Act also included a provision encouraging states to waive a customary 7-day waiting period for the first week to receive benefits.

Individuals deemed eligible to receive unemployment compensation benefits under the PUA should also be entitled to receive the “Federal Pandemic Unemployment Compensation” (FPUC) of $600 per week through July 31, 2020.  Individuals who are deemed ineligible to receive unemployment compensation benefits by a state labor agency will also be ineligible to receive the Federal Pandemic Unemployment Compensation.

8. What factors are considered when determining unemployment benefit eligibility as a result of COVID-19?

Individual factors that are needed to show unemployment status as a result of COVID-19 include:

  • Individuals diagnosed with COVID-19 or experiencing symptoms of COVID-19 and seeking a medical diagnosis;
  • A member of an individual’s household who has been diagnosed with COVID-19;
  • Individuals providing care for a family member, child, or other person within one’s household diagnosed with COVID-19;
  • Individuals who are unable to reach his or her place of employment because of self-quarantine, due to COVID-19;
  • Individuals who were scheduled to begin a work or unable to reach work due to COVID-19;
  • Individuals who provide major household support, because the head of the household has died as a result of COVID-19;
  • Individuals who have had to quit his or her job as a direct result of COVID-19;
  • Individuals whose place of employment is closed as a direct result of COVID-19; or
  • Individuals who are self-employed, or who would not otherwise qualify for regular unemployment.

This is not an exhaustive list of all qualifying factors that states will use in determining individual benefit eligibility as a direct result of the COVID-19 public health emergency, but these are key factors that states will use in making determinations. States may also consider state emergency declarations, social distancing protocols, and other business closures and restrictions due to the COVID-19 public health emergency.

9. Under the CARES Act, can I apply for both unemployment benefits with in my state and also apply for a loan under the SBA programs (Paycheck Protection Program (PPP) and Economic Injury Disaster Loan (EIDL))?

At this time, an individual could apply for both, but there is no ability to determine whether an individual will qualify for both the unemployment compensation program and the SBA loan programs. Individuals should assess each programs’ qualifications when deciding on available options. Additional information and guidance on this issue will be provided as it becomes available.

10. How will I be notified by my state agency regarding my eligibility to receive unemployment compensation benefits?

State agencies are required to provide notice to individuals in writing regarding the state’s determination regarding an individual’s eligibility to receive unemployment compensation benefits. If an individual is denied unemployment compensation benefits, the state agency must provide in the written notice, regarding thean individual’s right to reconsideration or appeal or both.

11. If I am deemed eligible by the state to receive unemployment compensation, how long will it take for me to receive those benefits?

It depends! The time it takes for your state labor agency to determine your eligibility to receive unemployment compensation benefits, and the time it takes for you to receive those benefits will vary.  It is important to check with your state labor or employment agency to better understand the processing timeline. 

12. If I am deemed ineligible by the state to receive unemployment compensation, what should I do next?

If your state determines that you are ineligible to receive unemployment compensation benefits, then the state is required to provide you with written notice regarding your rights to reconsideration or appeal or both.

13. May I collect unemployment insurance benefits for time in which I   receive pay for paid sick leave and/or expanded FMLA leave?

No. If you are eligible for paid sick leave or expanded family and medical leave (FMLA), you are not eligible for unemployment assistance. However, each state has its own unique set of rules; and DOL recently clarified additional flexibility to the states (UIPL 20-10) to extend partial unemployment benefits to workers whose hours or pay have been reduced. Therefore, individuals should contact their state unemployment office for specific questions about eligibility.

State Participation in the Pandemic Unemployment Compensation Program

1. Is my state required to participate in the Pandemic Unemployment Assistance (PUA) Program?

No. Under the CARES Act, states may participate in the PUA program, and will be fully reimbursed for the compensation paid out, plus administrative costs, if they do so (subject to DOL authority).

Individual states must sign an agreement with the U.S. Department of Labor for the full reimbursement costs to implement the program. Check with your state labor department or unemployment commission to determine PUA participation. To find information on you state labor agency, please visit the DOL's Services by Location page.

2. Is there a list of states that are currently participating in the Pandemic Unemployment Assistance (PUA) program?

At this time, there is no comprehensive list of states participating in the PUA program. States are taking different approaches to the new program, where some have already started to allow workers to apply while others are waiting for guidance from DOL. Check with you state labor department or unemployment commission to find out whether a state is planning to participate and the potential eligibility criteria. For more information on state labor agencies, please visit the DOL's Services by Location page.

3. How much money will my state receive in Pandemic Unemployment Assistance?

The amount that each state will receive in funds for pandemic unemployment assistance will vary by state.  The amount is determined by the U.S. Secretary of Labor based on statistical data and information agreed upon with the state labor agencies. 

1. I’m a broker, with independent contractor agents. Will I have to pay anything for my agents to receive unemployment benefits?

Traditionally, state unemployment programs are funded by an employer assessed unemployment tax. The CARES Act extended unemployment benefits to independent contractors for states that sign an agreement with the U.S. Department of Labor for 100 percent reimbursement of compensations paid. At this time, there are no specific details regarding additional fees or taxes imposed on businesses with independent contractors receiving unemployment benefits under the PUA. Additional information on this issue will be provided as it becomes available.

2. I’m a broker, with independent contractor agents. Will I have to verify their “unemployment” status to ensure an agent’s eligibility?

It depends! Each state labor or employment agency participating in the pandemic unemployment assistance (PUA) program has its own system for applying, verifying, and accepting unemployment compensation claims, including various documentation requirements. As states update their processes to extend the benefits to self-employed individuals, qualifying criteria may change. It is recommended that all questions presented as an “employer” be answered thoroughly and honestly for accuracy in PUA benefit determinations. 

Additional Resources

50 State Guide to Workforce Agencies’ COVID-19 Response

U.S. Department of Labor State-by-State Guide to Unemployment Benefit Amounts

DOL Advisories to State Workforce Agencies: