Law Alert: Motor Carriers Should Continue Objecting to IC Unemployment Claims Under the CARES Act
April 10, 2020
Pursuant to Section 2102 of the federal Coronavirus Aid, Relief, and Economic Security Act (CARES Act) enacted March 27, 2020, individuals not otherwise eligible to receive any state unemployment compensation benefits or extended federal benefits, including self-employed persons and independent contractors (ICs), may qualify for Pandemic Unemployment Assistance (PUA) funded by the federal government. In order to receive PUA benefits, ICs must show:
- They are unable to work or can only work a reduced schedule due to one of several COVID-19 related circumstances; and
- Provide proof of net income for their most recent tax year.
PUA benefits are retroactive for weeks of unemployment, partial employment, or inability to work due to COVID-19 reasons starting on or after January 27, 2020, and ending December 31, 2020.
Importantly, state unemployment agencies must administer these unique federal PUA benefit claims -- a task they are not necessarily readily equipped to handle via a method separate from typical state unemployment claims handling processes. While certain states appear to be working to implement some form of PUA specific claim administration, the processes are likely to remain largely intertwined since states are required to first ensure applicants are not eligible for any other state or federal unemployment benefits before awarding PUA benefits. Not surprisingly, so far, notices of IC PUA claims seem generally consistent with typical state unemployment claim notices. Thus, to the extent motor carriers receive notices concerning IC PUA claims from various state unemployment agencies, they may well be indistinguishable from a normal state unemployment benefit claim.
Absent each state’s implementation of a clearly delineated process for administering PUA benefit claims, not involving consideration of the motor carrier as an IC’s alleged employer (which creates the potential for reclassification challenges and unemployment tax assessments), the Firm recommends motor carriers continue filing written objections in response to all notices of IC unemployment benefit claims, explaining that the claimant was not an employee pursuant to each state’s unemployment law. Such responses can also include a statement recognizing that, while the IC may qualify for PUA benefits, such benefits are not chargeable to the motor carrier.
For additional information on IC PUA benefit claims under the CARES Act or assistance in preparing a written objection to one or more IC unemployment claims, including claims for PUA benefits, please contact Scopelitis Partners Steve Pletcher or Becky Trenner.
For answers to frequently asked COVID-19 questions, as well as up-to-date coverage of various related issues impacting the transportation industry, be sure to visit the Scopelitis COVID-19 Task Force Resource Page.