The Unemployment Crisis

Covid-19 was declared a pandemic by the World Health Organization in early March 2020.  Since then, businesses,both big and small, have experienced severe economic hardships.  Many businesses, deemed “non-essential”, have been forced to let go of their employees because their businesses have been shut down due to shelter in place orders and they cannot afford to pay them.  Consequently, more than 30 million Americans applied for unemployment benefits nationwide. In New Jersey, by early April 2020, more than 500,000 people had filed unemployment claims due to lack of work as a result of Covid-19.  That number does not even include those with existing claims or those who qualify for extensions.

On March 27, 2020, the CARES Act was signed which provides relief through federal funding for the state to support the unemployment crisis.  Now, more than 6 weeks later, there are still hundreds of thousands of state residents without income due to the back- log of the unemployment system.

This is especially frustrating for residents who are unable to work because they have no income and the government has not given updates on when they can expect their claims to be processed. The State’s Department of Labor and Workforce Development is facing a staff shortage in the Division of Unemployment and an overwhelming response of claimants accessing the website and calling the Reemployment centers. As a result, the Department’s site has crashed numerous times and the call centers advise callers to call back via an automated answering system.  Meanwhile, a possible vaccine will likely not be created for about one year, the death toll and spread of the virus continues, and medical professionals have no clear time of when the curve will flatten and the economy will be back to normal.  Even then, many businesses, especially small businesses will be unable to recover.

Typically, those who are eligible for unemployment benefits include people who lose their job “through no fault of their own,” such as an employer’s lack of work or a layoff due to downsizing. Therefore, if you voluntarily quit your job for reasons that were not work-related, or you were terminated for misconduct, your eligibility will need to be reviewed and you may not be eligible for unemployment benefits. In addition, to be eligible, for unemployment insurance benefits in 2020, you must have earned at least $200 per week during 20 or more weeks in covered employment during the base year period or you must have earned at least $10,000 in total covered employment during the base year period, with some exceptions for school teachers, corporate officers, and business owners, and other self-employed individuals. 

Currently, the CARES Act provides pandemic unemployment assistance which expands eligibility for individuals who are typically ineligible for Unemployment benefits, for example independent contractors, and self-employed and “gig” workers. It also includes pandemic unemployment compensation which provides an additional taxable $600 per week, on top of regular benefits, to all recipients of Unemployment Insurance which is also retroactive to the week of March 29, 2020. Finally, the CARES Act includes pandemic emergency unemployment compensation which consists of an additional thirteen weeks of unemployment benefits for all recipients.

Sadayah Q. DuRant is a recent graduate of Rutgers School of Law, where she was Editor of the Race and The Law Review Journal. We are pleased to introduce her as a new contributor.