Unemployment Claims in the COVID-19 Era

Even in the best of times, unemployment claimants can find the unemployment process complicated, confusing, long, and difficult. And this is not the best of times. The COVID-19 pandemic has exacerbated existing problems and created significant new problems from start to finish in the unemployment process. These problems go beyond mere delays, which could have been expected given the challenges imposed by the pandemic. A massive increase in the number of claimants, new eligibility categories, and the New Jersey Department of Labor working remotely rather than together in an office have combined into a perfect storm to put everybody in a frustrating and unwinnable situation. The laws guiding New Jersey unemployment1 provide little help with the new situations that have arisen. The CARES Act2 created an entirely new category of eligible claimants with little guidance as to how to establish their eligibility. New Jersey has been filling in the gaps through its own determinations and decisions, but those determinations and decisions are not publicly available.3 I have participated in dozens of COVID-19 related unemployment hearings and have spoken with over a thousand claimants. The information provided herein is taken from the decisions in these hearings and discussions with these claimants. In this article, I will address some of the most common issues that claimants find themselves facing during this pandemic and how to avoid them, if possible.

Pay Now or Pay Later?

During the Summer of 2020, NJDOL began paying a significant number of claims without making initial determinations. The following months have seen a flood of refund notices from NJDOL to claimants found ineligible after determinations are made. This process is still continuing. Many claimants understandably panic because they have spent the money, have no ability to repay, and were relying on the continuing income. NJDOL is no longer paying claims before making determinations. Initial determinations are often taking two months or longer, depending on the issue. This is a long time for unemployed workers to survive without a safety net, and while they are eventually paid a lump sum of all claimed benefits, that is little help to those who need the money now to pay bills and put food on the table. There is no great solution here. If unemployment benefits are paid before a determination is made, it upsets those who later receive a notice they were not eligible. If unemployment benefits are not paid until a determination is made, benefits are not being timely paid to people who really need them. Claimants need to be advised that they could be on either of these tracks. Whether they have received benefits or not, they need to continue certifying each week until a determination is made. If they received their benefits right away, they should be aware there is a chance of a redetermination later.

On Notice

There have been numerous disruptions to the administration of unemployment claims at all levels. This has led to many of the notices sent to unemployment claimants being inaccurate or untimely. The following are some of the most common issues with notices that are affecting claimants and employers alike. Some notices provide a length of time in which a claimant or employer can expect a response or decision to submitted information. However, everything is moving significantly slower than usual, which means the timeframes given are inaccurate. I have been advising claimants to add anywhere from four to 12 weeks to what is listed on notices due to the various delays. Certain issues, such as claims involving earnings in two or more states, can take even longer. Notices have not been updated to reflect the increased delays. It is important to note that the time to appeal is not extended, so parties must still file their appeals within the time prescribed on notices. However, notices still Unemployment Claims in the COVID-19 Era by Adam L. Schorr New Jersey State Bar Association New Jersey Labor & Employment Law Quarterly Vol. 42, No. 3 (April 2021) 8 Go to Index advise the parties that they can file their appeals via mail, fax, or online. While this is technically correct, appeals filed via mail or fax are taking significantly longer to process, if they are processed at all. The only way to ensure that an appeal has been received is to file the appeal through the NJDOL website and receive a confirmation number via email. Some notices are also arriving late to claimants and employers alike. This has become especially problematic with the Notice of Phone Hearing for the Appeal Tribunal Hearing. Both claimants and employers must register for their Appeal Tribunal hearing by 3 p.m. the day prior to their hearing. However, I have been involved in an increasing number of hearings in which the notice of hearing is received only days before the hearing, giving parties little time to register and prepare. It is important for everybody to note when they receive documentation from NJDOL, as the time to respond is based on both the mailing date and the date received. Keeping track of when notices are received can significantly help later in the process if it becomes an issue.

CARES Act Categories

The CARES Act created approximately 11 new categories of people who could claim unemployment benefits,4 which has been designated Pandemic Unemployment Assistance. The most commonly applied categories are (1) independent contractors and gig workers whose earnings typically do not count toward unemployment eligibility; (2) employees who cannot work due to having COVID-19; (3) employees who have less or no work due to businesses slowing or shutting down; (4) employees who have been advised by a medical professional to quarantine; and (5) employees who have to care for children who no longer attend physical school or who otherwise lost their child care.5 These categories were put into law by the federal government with no federal regulations. The primary guidance provided to the states has been a downloadable PDF on the U.S. Department of Labor website,6 which NJDOL appears to be following. NJDOL has not yet adopted any regulations regarding these categories. The best way to learn how a claimant can establish eligibility under the CARES Act is to speak with another attorney who has already participated in a hearing regarding the issue.

$231 Weekly Benefit Rate

To qualify for standard unemployment benefits in 2020, a claimant must have earned either $10,000 total or at least $200 in 20 different weeks in their base year.7 Only earnings in New Jersey are counted, and self-employment earnings are not counted.8 However, the CARES Act specifically made eligible independent contractors, gig workers, and employees who did not earn enough.9 How did New Jersey determine what these workers would be paid? The CARES Act points to the Disaster Unemployment Act, which sets the minimum payment at 50% of the Average Weekly Benefit Rate of the state in the previous year.10 For New Jersey, that was $230.35, which was rounded up to $231.11 Many claimants received this $231 weekly benefit rate because NJDOL did not have any record of self-employment earnings for these claimants. However, NJDOL has been reviewing these claims and issuing re-determinations of the weekly benefit rate based on all earnings, including self-employment earnings.12 These monetary redeterminations have been progressing, but it has been a very slow process. Claimants who were working as independent contractors and gig workers should monitor their email in case NJDOL requests information and documentation regarding their earnings.

The New “Black Hole”

The original unemployment “Black Hole” applied to claimants who quit one job for another and then did not start the second job and work at least eight weeks through no fault of their own. Claimants were disqualified from benefits due to voluntarily quitting their first job, and changing jobs was not considered good cause. That Black Hole has been amended so that claimants in that situation are not disqualified provided they were supposed to start the second job within seven days of the first job and the second job was for the same or more money and the same or more hours.13 However, there is no protection for claimants who quit their jobs in early 2020 intending to take only a brief period of time away from work but found themselves unable to rejoin the workforce because the COVID-19 pandemic eliminated so many jobs. NJDOL has consistently disqualified claimants for voluntarily leaving work without good cause in these cases, and claimants in this situation must work eight weeks and New Jersey State Bar Association New Jersey Labor & Employment Law Quarterly Vol. 42, No. 3 (April 2021) 9 Go to Index earn 10 times their weekly benefit rate to become eligible for unemployment benefits again.14 Unfortunately, this has left many claimants unable to collect benefits through nothing more than bad timing. A second subset of claimants began working after voluntarily leaving their previous employment but failed to meet the eight weeks/10 times requirement. Under current federal guidance, these claimants should be found eligible.15 NJDOL has typically been finding these claimants eligible for PUA benefits. Finally, there is the category of claimants caught in between, who accepted offers at new jobs, quit their previous jobs, and the new jobs failed to begin due to the COVID-19 pandemic. This is the situation contemplated in McClain v. Board of Review. 16 This recent New Jersey Supreme Court case found that, as long as a claimant had a job offer that met the criteria of N.J.S.A. 43:21-5, a claimant is still eligible for benefits if that job offer is revoked through no fault of the claimant.17 Claimants in this situation do not need PUA – they will be eligible for standard unemployment.

Fear of the Virus

A large and growing subset of claimants have been disqualified for benefits because they quit their job in March and April 2020 due to fear of catching the virus. Some of these claimants quit because they had an underlying medical condition or lived with somebody who did. Some of these claimants were concerned that their employer did not provide proper protection and equipment during the early weeks when such equipment was not readily available. Some did not feel comfortable or safe being around people after the governor’s orders, even if they worked in a business that was not shut down. The CARES Act18 does not provide benefits for those who quit their jobs or requested leave due to fear of catching the virus. Many of these claimants have been disqualified for benefits. There are two primary ways for these claimants to establish eligibility. First, claimants whose doctors advised that they should quarantine because their ages or underlying medical conditions put them at increased risk of the virus are eligible for benefits. The claimant must present a doctor’s note to NJDOL stating that the claimant is or was advised to quarantine. A claimant who did not get a contemporaneous doctor’s note should still get a current doctor’s note. NJDOL is not accepting verbal testimony of claimants to establish this eligibility. If a claimant quit because the claimant was living with somebody who was advised to quarantine, the claimant should present medical documentation regarding that person’s need to quarantine. This approach is not always successful depending on the surrounding circumstances, but it provides a better chance of success than proceeding without any doctor’s note. Second, a claimant who, prior to quitting, complained to the employer that the employer was not taking appropriate steps to provide a safe work environment may be eligible for benefits if the employer took no steps to remedy the unsafe condition(s). This situation is covered under regular unemployment law, not PUA, as a claimant always has good cause to quit when an employer fails to provide a safe work environment.19 Putting complaints in writing is highly recommended, and complaints to outside agencies such as OSHA can significantly increase the chance of success. The claimant must also give the employer a reasonable opportunity to remedy the unsafe condition(s). NJDOL has posted all scenarios in which claimants may be eligible for benefits related to the COVID-19 pandemic.20 Quitting and failing to meet one of the allowed criteria will result in disqualification. Fear of the virus is not a permitted criterion.

Conclusion

These are just a few of the many situations that are coming up often in unemployment claims. The CARES Act has introduced a host of new legal issues, and the current infrastructure is struggling to keep up with the deluge of new claims, causing many previously unseen administrative issues. Attorneys should familiarize themselves with the new unemployment categories as quickly as possible to best advise their clients. Having attorney representation will greatly increase a claimant’s chances of success at NJDOL.22 Adam L. Schorr is a partner at Schorr & Associates, P.C. in Cherry Hill. He represents claimants in unemployment claims and appeals and represents employees in a variety of other workplace disputes, including discrimination, harassment, retaliation, and contract issues.

 

Endnotes

1. N.J.S.A. 43:21-1, et seq. and N.J.A.C. 12:17-1.1, et seq.

2. 15 U.S.C. §§ 9001-9101.

3. Because Appeal Tribunal and Board of Review decisions are unavailable publicly, citations cannot be provided.

There have been no COVID-19 related decisions issued by the Superior Court of New Jersey, Appellate Division

or New Jersey Supreme Court to date. Therefore, many statements of law in this article remain uncited.

4. 15 U.S.C. § 9021(a)(3)(A)(ii)(I).

5. Id.

6. Available at wdr.doleta.gov/directives/attach/UIPL/UIPL_16-20_Change_1.pdf,

7. See myunemployment.nj.gov/before/about/who/#:~:text=To%20be%20eligible%20for%20

Unemployment,during%20the%20base%20year%20period.

8. N.J.S.A. 43:21-19(i)(1)-(10).

9. 15 U.S.C.A. § 9021(a)(3)(A)(i)-(iii).

10. 20 C.F.R. § 625.6.

11. See wdr.doleta.gov/directives/attach/UIPL/UIPL_11-20_Attachment.pdf.

12. See myunemployment.nj.gov/labor/myunemployment/assets/pdfs/CARES_FFRCA.pdf.

13. N.J.S.A. 43:21-5(a).

14. Id.

15. See wdr.doleta.gov/directives/attach/UIPL/UIPL_16-20_Change_1.pdf, See Question 33.

16. McClain v. Board of Review, 237 N.J. 445 (2019).

17. Id. at 464.

18. 15 U.S.C. §§ 9001-9101.

19. N.J.A.C. 12:17-9.4.

20. See myunemployment.nj.gov/labor/myunemployment/assets/pdfs/COVID-19%20SCENARIOS.pdf.

21. Id.

22. See schorrlaw.com/unemployment-hearing-statistics-year-end-2020/.

 

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