On April 4, 2020 the US Department of Labor issued UI-PL 15-20 in its continuation of guidance to states in administering the provisions of the Coronavirus Aid, Relief, and Economic Security (CARES) Act of 2020. UIPL 15-20 provides Federal Pandemic Unemployment Compensation (FPUC) Program Operating, Financial, and Reporting Instructions. (see attached)

Section 2104 of the Coronavirus Aid, Relief, and Economic Security (CARES) Act of 2020 provides for a temporary emergency increase in unemployment compensation (UC) benefits, referred to as the Federal Pandemic Unemployment Compensation (FPUC) program. This program provides an eligible individual with $600 per week in addition to the weekly benefit amount he or she receives from certain other UC programs.

The cost of these additional $600 payments to eligible individuals each week is 100% federally funded. States may not charge employers for any FPUC benefits paid so as to impact the employer’s experience rating.

The FPUC program is administered through a voluntary agreement between the state and the Department. Implementation costs and ongoing administrative costs for this program are also 100% federally funded.

Comment:

This clearly indicates that employer accounts shall not be charged for the FPUC payments so as to impact experience rating. However a definition of “employer” is not provided in the UI PL, leaving a question open with respect to whether the 100% non-charging for the FPUC also applies to reimbursing employers and Indian tribes that have chosen to be reimbursing.

A review of the CARES Act itself includes Section 2103 that provides authority to the Secretary of Labor to issue additional clarifying guidance with respect to “maximum flexibility to reimbursing employers as it relates to timely payment and assessment of penalties and interest pursuant to such State laws”. This language could be interpreted to mean that reimbursing employers are to be charged, although states may be flexible in assessment of penalties and interest on reimbursement amounts that may be due but not paid timely.

Additional guidance would be helpful to clarify if all employer accounts shall not to be charged for FPUC $600 amounts, or one-half of reimbursement amounts are to be charged to reimbursing employers.

The provisions of the CARES Act include Section 2103 below.

SEC. 2103. EMERGENCY UNEMPLOYMENT RELIEF FOR GOVERNMENTAL ENTITIES AND NONPROFIT ORGANIZATIONS.

(a) FLEXIBILITY IN PAYING REIMBURSEMENT.—The Secretary of Labor may issue clarifying guidance to allow States to interpret their State unemployment compensation laws in a manner that would provide maximum flexibility to reimbursing employers as it relates to timely payment and assessment of penalties and interest pursuant to such State laws.

(b) FEDERAL FUNDING.—Section 903 of the Social Security Act (42 U.S.C. 1103) is amended by adding at the end the following:

‘‘Transfers for Federal Reimbursement of State Unemployment Funds ‘‘

(i)(1)(A) In addition to any other amounts, the Secretary of Labor shall provide for the transfer of funds during the applicable period to the accounts of the States in the Unemployment Trust Fund, by transfer from amounts

reserved for that purpose in the Federal unemployment account, in accordance with the succeeding provisions of this subsection.

(B) The amount of funds transferred to the account of a State under subparagraph (A) during the applicable period shall, as determined by the Secretary of Labor, be equal to one-half of the amounts of compensation (as de

fined in section 3306(h) of the Internal Revenue Code of 1986) attributable under the State law to service to which section 3309(a)(1) of such Code applies that were paid by the State for weeks of unemployment beginning and

ending during such period. Such transfers shall be made at such times as the Secretary of Labor considers appropriate.

(C) Notwithstanding any other law, funds transferred to the account of a State under subparagraph (A) shall be used exclusively to reimburse governmental entities and other organizations described in section 3309(a)(2) of such Code for amounts paid (in lieu of contributions) into the State unemployment fund pursuant to such section.

(D) For purposes of this paragraph, the term ‘applicable period’ means the period beginning on March 13, 2020, and ending on December 31, 2020.

(2)(A) Notwithstanding any other provision of law, the Secretary of the Treasury shall transfer from the general fund of the Treasury (from funds not otherwise appropriated) to the Federal unemployment account such

sums as the Secretary of Labor estimates to be necessary for purposes of making the transfers described in paragraph (1).

(B) There are appropriated from the general fund of the Treasury, without fiscal year limitation, the sums referred to in subparagraph (A) and such sums shall not be required to be repaid.