Give me the TL;DR of Executive Order No. 20-04 Granting New Unemployment Benefits Due to Novel Coronavirus
**This is another guidance document by KSB School Law that we are sharing with our clients and others regarding the most common legal issues schools and ESUs should consider related to the coronavirus. Our posts will deal specifically with legal issues, and not with the health-related issues best led by the CDC, DHHS, NDE, and your local health officials. You will be able to find all of the guidance from KSB at this site: https://www.ksbschoollaw.com/covid19
Executive Order No. 20-04 (EO) is a responsive measure to the novel coronavirus that suspends several provisions of the Nebraska Employment Security Law with respect to coronavirus related claims filed on or after March 22, 2020, through May 2, 2020. The EO grants unemployment compensation eligibility to individuals “as a result of COVID-19 exposure or illness.”
However, the EO itself does not provide a great amount of detail and is not perfectly clear on its face. To be sure we understood how the EO will operate, we (along with others) reached out to the Department of Labor seeking more guidance. The Department was very responsive and helpful in clarifying its view of the EO. Do remember that this was informal guidance. There will be no substitute for seeing how these benefits are actually administered as we move forward.
The Department indicated that it will broadly interpret the EO and existing regulations to extend benefits to those whose wages are disrupted due to the coronavirus, even if they are not personally exposed to or ill from the virus. For example, the Department has said they will treat those who must take time away from work to care for others (such as a child whose school or daycare closed in response to the virus) as covered by the executive order. Additionally, individuals whose workplaces are closed or limited in operation in order to stem the spread of the virus will be considered “laid off” and entitled to unemployment benefits.
Most notably, the EO does the following:
Directs the Commissioner of Labor to treat all individuals in an “unpaid” status as a result of COVID-19 “exposure or illness” as being on a temporary layoff by suspending definitions of “leave of absence” and “unemployed”;
Permits individuals to immediately receive benefits when “unpaid” as a result of COVID-19 exposure or illness by suspending the usual one week waiting period;
Waives availability and work search requirements for individuals receiving benefits as a result of COVID-19 exposure or illness;
Grants employers relief from charges for benefits paid to individuals eligible for unemployment benefits “solely as a result of COVID-19 exposure or illness”; and
Grants employers relief from charging and appeal rights when an employer’s failure to respond to requests for separation information within ten days is reasonably attributable to absences or temporary separations resulting from COVID-19 exposure or illness.
Employers naturally have questions about the effect of the EO. We’ve compiled the most frequent questions we’ve received so far:
1. Are employees eligible for unemployment if we have offered to provide full or part-time work to them, and they decline?
The EO does not address this, and it will likely depend on the reason for the employee turning down the work. For example, if employees say they can’t work due to the need to care for a child or family member as a result of COVID-19 illness or exposure, or related closures, they may still qualify based on the informal responses provided by the Department.
However, an employee who is otherwise perfectly able to work, but just doesn’t want to do so, may not be eligible because their lack of work is voluntary and unrelated to COVID-19. This could get very tricky if the employee’s reason is, “I am a para. I wasn’t hired to do custodial work.” The employee’s job duties may have changed due to the COVID-19 closures, but the employee still has work available.
We simply do not know how the Department will handle those cases, or how closely they’ll actually be able to monitor the facts of each request with an influx of applicants. You should seek guidance from your legal counsel before denying an unemployment claim as the employer based on availability of work.
2. Are classified staff members eligible for unemployment compensation benefits if they receive some or all of their pay and benefits pursuant to a return to work agreement?
The executive order does not directly address this issue. However, it does not suspend or otherwise affect the other provisions of the regular unemployment laws that are not mentioned in the EO. Generally, an employee who is actually receiving their pay and benefits does not meet the requirements to seek unemployment. The Department through informal communications did indicate that it will provide partial payment in the event only some of the employee’s wages are affected by COVID-19, so an employee who receives a return to work or other agreement that does not pay full wages or fully paid leave may still be eligible for benefits.
We assume the EO will not be interpreted to allow an employee to obtain both pay/benefits from the school and unemployment.
3. Does providing an employee with paid leave affect an employee’s eligibility for unemployment compensation benefits?
Paid leave is considered “wages” for purposes of unemployment compensation. That means that an individual will be ineligible for benefits if they receive paid leave in an amount that equals or exceeds what would be the individual’s weekly benefit amount. If the paid leave is less than what the individual could receive in weekly benefits, then they probably remain eligible for benefits in an amount offset by the paid leave received.
If your district is providing paid leave through a return to work agreement or other manner, which is likely based on avoiding NPERS and retirement complications, that will likely disqualify the employee
4. Are classified staff members eligible for unemployment compensation benefits if they remain partially employed on a reduced schedule?
Classified staff members may be eligible for unemployment compensation benefits if they remain partially employed on a reduced schedule. “Unemployed” individuals are eligible to receive such benefits.
To qualify for the waiver of the standard definition of “unemployed”, a worker must be “in an unpaid status for any reason as a result of COVID-19.” If partially employed, an individual would not be in an “unpaid status” with their employer. Thus, the standard definition of “unemployment” found in section 48-602(33) would apply, which provides that:
Unemployed means an individual during any week in which the individual performs no service and with respect to which no wages are payable to the individual or any week of less than full-time work if the wages payable with respect to such week are less than the individual's weekly benefit amount, but does not include any individual on a leave of absence or on paid vacation leave.
5. Does the provision of benefits, but not other compensation, affect an employee’s eligibility for unemployment compensation benefits?
According to the Department, the answer is “no.” The EO is unclear on this issue, but according to the Department’s informal communications, health insurance and other similar benefits are not wages within the meaning of Neb. Rev. Stat. § 48-602(35), and therefore do not affect an individual’s eligibility for benefits.
6. Will payments made to employees pursuant to this Executive Order count against the employer?
According to the EO and the Department, all payments will be paid out of the state trust and not individual employer accounts. The order suspends “certain provisions of Neb. Rev. Stat. § 48-652 and grant[s] an employer relief from charging for benefits paid to individuals eligible for unemployment benefits solely as a result of COVID-19 exposure or illness.” The Department has confirmed informally that this includes covered entities participating as “contributing” and those considered “reimbursement” employers.
7. Does an assurance of re-employment affect eligibility for benefits under this Executive Order?
An assurance of reemployment does not seem to affect eligibility for benefits under the EO. This is especially true because the order waives availability and work search requirements for individuals receiving benefits as a result of COVID-19 exposure or illness.
8. What is the maximum unemployment benefit an individual can receive?
Neb. Rev. Stat. § 48-624 provides:
(1) An individual's weekly benefit amount shall be one-half of his or her average weekly wage rounded down to the nearest even whole dollar amount, but shall not exceed one-half of the state average weekly wage as annually determined under section 48-121.02;
(2) For purposes of this section, an individual's average weekly wage shall equal the wages paid for insured work in the highest quarter of the base period divided by thirteen; and
(3) Any change in the weekly benefit amounts prescribed in this section or in the maximum annual benefit amount prescribed in section 48-626 shall be applicable for the calendar year following the annual determination made pursuant to section 48-121.02.
Neb. Rev. Stat. § 48-625 would apply where an individual receives some wages in a week, and states that:
Each eligible individual who is unemployed in any week shall be paid with respect to such week a benefit in an amount equal to his or her full weekly benefit amount if he or she has wages payable to him or her with respect to such week equal to one-fourth of such benefit amount or less. In the event he or she has wages payable to him or her with respect to such week greater than one-fourth of such benefit amount, he or she shall be paid with respect to that week an amount equal to the individual's weekly benefit amount less that part of wages payable to the individual with respect to that week in excess of one-fourth of the individual's weekly benefit amount. In the event there is any deduction from such individual's weekly benefit amount because of earned wages pursuant to this subsection or as a result of the application of section 48-628.02, the resulting benefit payment, if not an exact dollar amount, shall be computed to the next lower dollar amount.
Finally, Neb. Rev. Stat. § 48-626 imposes an annual cap on the total amount of benefits an individual may receive, but would not likely be triggered within the timeframe contemplated by the executive order.
10. Will taking unemployment benefits affect an individual’s benefits under NPERS?
Yes! Receiving unemployment benefits would cause an individual to take a break in service, because they would not be receiving their “regular wages” during that period. This could cause an individual to lose credit for some or all of this service year. Additionally, if the individual were to retire within the next six years, the individual’s “capping period” would have their final benefit reduced as a result of their reduced compensation during this year.
If you have any questions about EO 20-04 or any other employment issues arising from school closures and COVID-19, we recommend that you contact your school attorney or call Karen, Steve, Bobby, Coady, or Jordan.