Coronavirus Resources

Unemployment benefits and PPP under COVID-19


We are getting many questions about unemployment benefits, eligibility for PPP, and what do dealers do if an employee refuses to come back to work?

Here is a helpful breakdown of the Federal DOL guidelines under Coronavirus Aid Relief Act and most frequently asked  FAQ’s

As dealers receive their CARES ACT PPP Loan approvals and start planning for your loan forgiveness eligibility, this email will be a helpful guide so please RETAIN for future reference.   


On April 4th, the U.S. Department of Labor (DOL) issued Unemployment Insurance Guidance Letter 15-20 to provide further guidance to the states on the temporary expanded unemployment insurance benefits available under the Coronavirus Aid, Relief, and Economic Security (CARES) Act. The Guidance focuses primarily on section 2104 of the CARES Act, which authorizes Federal Pandemic Unemployment Compensation (FPUC) benefits. Under the FPUC, individuals who are otherwise entitled to receive regular unemployment compensation will also receive an additional $600 per week flat payment through July 31, 2020.

The Guidance clarifies the following important details regarding CARES Act unemployment benefits:

Employee eligibility:

An individual is eligible for the full $600 weekly payment if the individual receives one dollar ($1) or more in regular unemployment compensation for the week from the individual’s home state. An employee may receive partial state unemployment benefits if their hours have been materially reduced. Thus, under the DOL Guidance, many individuals whose wages and hours have been reduced as a result of the pandemic will now also be eligible for the full $600 weekly payment, so long as they qualify for one dollar of regular unemployment benefits from the state.

FPUC benefits are federally-funded:

DOL Guidance makes clear that FPUC benefits are 100% federally-funded. States may not charge employers for any FPUC benefits.

Other guidance:

The DOL’s Guidance letter also includes guidance to states about protecting unemployment insurance program integrity, as the provisions in the CARES Act operate in tandem with the fundamental eligibility requirements of the Federal-State Unemployment Insurance program. Critically, to be eligible for unemployment benefits, individuals must be unemployed through no fault of their own and be able and available to work.

                                        Unemployment benefits and the Payroll Protection Program:

The CARES Act also provided funding for the Payroll Protection Program (PPP). A key provision of the PPP provides for loan forgiveness if the business maintains its monthly payroll expenses and does not allow them to decline by more than 25%.

If you have already let go of employees or are considering letting them go so they can pursue unemployment benefits, know that this will hinder your ability to receive full forgiveness on your PPP loan. However, if you have already let go of employees, you will have until June 30 to rehire them back onto your payroll without penalty.

                                        Frequently Asked Questions:

Q: An employee is threatening to file for unemployment benefits because he will make more than he currently earns with the $600 weekly FPUC benefit. He is an essential employee and we have available work for him to perform. Can he do this?

A: No. The most recent DOL Guidance makes clear that states must continue to protect unemployment insurance integrity. To be eligible for benefits, an employee must be unemployed through no fault of their own and be able and available to work. An employee who voluntarily quits because they believe they will make more drawing unemployment is not eligible for benefits. If the employee quits anyway and files for unemployment, you should consider contesting the claim to avoid an increase to your unemployment insurance rates.

 Q: An employee has asked us to lay him off so he will qualify for unemployment benefits. Do we have to agree?

 A: No. If the employee is considered essential and you have work available for them to perform, you do not have to agree to terminate him so that he can collect unemployment benefits. Keep in mind, however, if the employee’s hours have been materially reduced as a result of the economic downturn, he may qualify for partial state benefits and the additional $600 weekly FPUC benefit even without being laid off.

Q: We have already had to lay off employees but would like to file for a PPP loan. Will that impact our eligibility for the loan?

A: No. If you get the PPP loan, you will have until June 30 to rehire the employees back onto your payroll without penalty.

Q: What if we receive a PPP loan, but the employees we laid off refuse to return to work because they say they are better off continuing to receive unemployment benefits with the $600 FPUC payments?

A: You should explain to these employees that they will be disqualified from receiving unemployment benefits if they refuse suitable work. You can’t compel unwilling employees to return to work, but you should report their refusal to accept re-employment to the state.

IMPORTANT :  Keep in mind you can also replace any workers who refuse to return with new hires to restore your payroll by June 30th.

Q: How do I let unemployment know that my employee  turned down work? 

A:  It is the employer’s responsibility to notify the DOL that a claimant has refused a recall or an offer of employment.  The employer needs to provide the following information to the DOL.

1.     Date employment was offered

2.     Date employment to start

3.     Name and title of person making the job offer

4.     Title of job offered

5.     Rate of pay

6.     Schedule of job offered

A letter then needs to be sent to the DOL to include the employer’s SUI# and the claimant’s name and the last four (4) of the SS#.

Department of Labor
Unemployment Division
PO BOX 15122
Albany, NY 12212-5122

The DOL will then issue a determination on the claimant’s eligibility.  This is a process that can take several weeks at best.

 I would think that facing the current volume of claims, this protest could take months to resolve.

If you have any more questions, please call  631-8511 or feel free to call our HR consultant Tony Antoniadis at Peoples System Inc. at  1-800 -234-4632 x 361.

Tony has been extremely helpful in assisting NFADA and our members navigate through these challenging HR times.

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