COVID-19: Expansion Of Unemployment Benefits To Nebraska And Iowa Workers


March 20, 2020

In response to COVID-19 and the challenges that employees and employers are facing, both Iowa and Nebraska have temporarily modified certain unemployment benefit requirements. These changes come on the heels of guidance from the U.S. Department of Labor, Unemployment Insurance Program Letter 10-20, https://wdr.doleta.gov/directives/attach/UIPL/UIPL_10-20.pdf, which outlines that states may expand normal unemployment rules to respond to the coronavirus pandemic.

Nebraska

Governor Pete Ricketts issued an executive order that allows the Nebraska Department of Labor (NDOL) to temporarily modify certain unemployment insurance requirements. Generally, unemployment benefits are only available for employees (1) unemployed through no fault of their own and (2) are able and available to work. In response to COVID-19, the NDOL is adjusting regulations related to the “able and available” requirement.

  1. Who is covered? 

Unemployment benefits only apply to employees and not to independent contractors or the self-employed.

  1. What situations are covered by unemployment insurance benefits?

If an employee is temporarily impacted by COVID-19, this will be treated as a “lay-off.”  This change will apply to employees that are in unpaid status because of a shutdown (partial or full), quarantine, or because they are caring for a family member because of illness or a facility closure.

NOTE: It is unclear whether this applies to employees who are voluntarily not working because of self-quarantine, etc. Such employees are still encouraged to file.

  1. What claimant requirements are waived?

The requirement to search for work will be waived for all workers filing for unemployment. This is consistent with the government’s goal to discourage people from going out into the community.

The one-week unpaid waiting week will also be waived. Most quarantines are two weeks in length. The NDOL does not want to discourage employees from going into quarantine and will pay immediately for claims filed during that time period.

  1. Does the employer’s account get charged?

No. The NDOL will waive charges to employers. The NDOL will instead pay for unemployment benefits with a trust fund. This will soften the blow on employers and encourage employers to send people home that need to be sent home. The trust fund is easily able to handle this for many weeks, unlike other states.

  1. When do the changes go into effect?

These temporary changes are in effect from March 22, 2020, through May 2, 2020. The changes will be reviewed throughout their implementation and possibly expanded past May 2nd, if need be.

  1. Is there any action required from employers?

Employers will receive a form in the mail if they have an employee file a claim. Employers will be asked to share when the employee worked for them, what day the employee stopped working, and when they believe the employee will be able to return to work. As for the return-to-work date, employers are strongly encouraged to make their best estimate based upon their business and their industry.

Iowa

Governor Kim Reynolds has announced assistance for workers and employers impacted by layoffs related to COVID-19. Accordingly, the Iowa Workforce Development (IWD) has implemented new guidance relating to unemployment benefits under Iowa law in order to take steps to reduce the impact of claims on employers who must temporarily lay off staff due to closures or slowdowns. The IWD has indicated that it “encourages all employers to utilize paid leave and telework options for employees before utilizing temporary layoffs” where possible.

  1. Who is covered? 

Unemployment benefits only apply to employees and not to independent contractors or the self-employed.

  1. What situations are covered by unemployment insurance benefits?

 If an employer temporarily lays off employees due to any loss or lack of work due to COVID-19, employees will be eligible for unemployment insurance benefits, provided the employees meet all other eligibility requirements.

If an employee imposes a self-quarantine after exposure, is required to stay home by his/her employer because of the COVID-19, or is impacted by school closures with no childcare, the employee may be eligible for unemployment benefits if they are not allowed to telework and do not have paid time off to cover the time the employee must be out of work. These instances will be evaluated on a case by case basis.

NOTE:  It is unclear whether this applies to employees who are voluntarily not working because of self-quarantine without exposure, etc. Such employees are still encouraged to file.

Below is a chart provided by the IWD outlining specific COVID-19 scenarios and benefits available.

  1. What claimant requirements are waived?

Claimants can expect to receive payment within 7-10 days after the date the claim is filed and the IWD is waiving work search and work availability requirements.

  1. Does the employer’s account get charged?

No. All unemployment claims filed and paid as a result of COVID-19 will have the charges waived for employers. This means that an employer’s tax rate should not be affected. If employers do receive charges for a COVID-19 claim, they should contact the IWD.

  1. When do the changes go into effect?

These temporary changes are in effect immediately

  1. Is there any action required from employers?

Employers are asked to notify employees when filing a claim for unemployment due to COVID-19, they must select in the application the following option:  “You are filing due to a temporary layoff as a result of COVID-19 (Coronavirus).”  The IWD has indicated that it “encourages all employers to utilize paid leave and telework options for employees before utilizing temporary layoffs” where possible.

The IWD has provided the following chart outlining specific COVID-19 scenarios and benefits available:

COVID-19 Scenarios Iowa Unemployment Insurance
1. Worker is mildly ill with COVID-19.
2. Worker is severely ill with COVID-19.
3. Worker was exposed & quarantined. Business remains open.
4. Worker caring for family member. Depends – case by case basis
5. Schools close, worker has no childcare.
6. Schools close, worker is impacted.
7. Worker is immune-compromised, advised to quarantine.
8. Employer must shut down.
9. Employer does a temporary shut down.
10. Employer reduces hours & work.
11. Healthcare workers and first responders are under quarantine.

If you have any questions about this alert, please contact the Labor Employment and Benefits members of our COVID-19 Response Team indentified below.

Aaron Clark
aclark@mcgrathnorth.com
(402) 633-9580

Abbey Moland
amoland@mcgrathnorth.com
(402) 633-9566

Caroline Nelsen
cnelsen@mcgrathnorth.com
(402) 633-9575

Contact information for the complete McGrath North’s COVID-19 Response Team can be found here.

For information regarding additional business-related concerns centered around COVID-19, please visit our COVID-19 Resource Guide here.

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