Changes to Unemployment Assistance Under the American Rescue Plan Act

Information Current as of March 15, 2021

President Biden signed the American Rescue Plan Act of 2021 (“ARP”) into law on March 11, 2021. ARP provides “Crisis Support for Unemployed Workers” affected by the pandemic by extending the availability of the following types of unemployment assistance:

Type

Purpose

Change

Federal Pandemic Unemployment Compensation(“FPUC”)

To supplement the weekly amount of existing state benefits by adding $300 per week from the federal government. (FPUC was originally $600 before dropping to $300 in December 2020.)

Those eligible for unemployment benefits in their state will continue to receive an additional $300 until the new cut-off date of September 6, 2021. 

Pandemic Emergency Unemployment Compensation(“PEUC”)

To increase the duration of benefits for those who have already used up the available weeks of state or federal unemployment benefits.

End date extended by 29 weeks to September 6, 2021. 

Pandemic Unemployment Assistance(“PUA”)

To help self-employed, part-time, and “gig workers” who traditionally might not have qualified for any unemployment benefits.

End date extended by 29 weeks to September 6, 2021. 

Mixed Earner Unemployment Compensation(“MEUC”)

$100 per week from the federal government to help those who are partly employed and partly self-employed.  (MEUC was created in December 2020 to help those workers with mixed sources of income who traditionally might not have qualified for any unemployment benefits.)

End date extended to September 6, 2021.



Additionally, ARP introduced a tax break for unemployed Americans: employees will not be taxed on the first $10,200 of unemployment benefits received in 2020 if the employee’s 2020 adjusted gross income was under $150,000. 

Takeaways for Employers:

  • Depending on how the pandemic progresses, benefits could be extended or reduced by Congress after September 6, 2021.
  • Although there are concerns by some about benefits keeping employees from returning to work, it is important to look at the actual data in your particular industry.
  • We know more about tackling COVID-19 now than a year ago, so businesses worried about employees not wanting to return should consult counsel on how to show they are providing a safe workplace. [See Employee Vaccination Considerations for Employers]
  • If employees refuse to return to the workplace despite a recall notice, employers should consult counsel about possibly notifying state unemployment offices. [See What to Do When Your Employee Refuses to Return to Work Amid COVID-19?]
  • An employee who declines to return may present an employer the opportunity to look for new ways to attract and use workforce talent post-pandemic.
  • Employers with questions about unemployment insurance, reluctant employees, workplace health and safety, and post-pandemic workforce reallocation should speak with counsel about the specific ways ARP and other standards may affect their opportunities and responsibilities. 
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