Have employees on Partial Unemployment? Heads up!

Beginning the workweek of January 18th, New York state has modified its rules for employees’ eligibility for receiving partial unemployment benefits. This is important for employers to understand for multiple reasons. One of these is the fact that many employers may now be on the hook for having their unemployment rate affected with new increased eligibility for benefits. A second consideration to make, specific to circumstances introduced by the pandemic, is whether the modifications you may have made to your employees’ schedules during COVID to allow them to still be able to collect some partial unemployment and still work part time, are still necessary.   

We know that some employers have reduced the number of days some employees work per week in order to allow them to still collect partial unemployment, including the supplemental Federal PUA benefit (up to $600 at one point and $300 now through March). With the new unemployment eligibility reduction factor now being based number of total hours worked each week vs. number of days, these businesses may now have more options to schedule and utilize these employees throughout the week, and still allow them collect partial unemployment to account for a still overall loss of wages (for example, we’ve seen this a lot in industries where tips were a large part of employee pay and have now have been severely reduced regardless of hours worked). Here’s what you need to know, and perhaps should reconsider, if you’ve made such modifications for your employees’ benefit:

• Previously an employee’s benefit eligibility was reduced by 25% for each day they worked, regardless of the number of hours within that day. This meant once an employee worked more than 3 days in the week, regardless of number of hours in that time, they were no longer eligible for any unemployment.

• Under the new rules which go into effect for the work week of 1/18, employees’ eligibility will only be reduced based on the number of total hours worked within the week, disregarding number of days. The break down of reduction based on hours is as follows:

  • 0-4 Hour Worked: 0% reduction in benefit eligibility for that week.

  • 5-10 Hours Worked: 25% reduction in benefit eligibility for that week.

  • 11-20 Hours Worked: 50% reduction in benefit eligibility for that week.

  • 21-30 Hours Worked: 75% reduction in benefit eligibility for that week.

  • Over 30 Hours Worked: No longer eligible for benefits that week.

  • Employees should only count up to 10 hours of time worked in each single day toward their total hours for the week. Therefore, if an employee works 11 hours in a day, they should only report that as 10 hours worked for the week.

• Employees are still capped at earning $504 each week before they are deemed ineligible for unemployment benefits, regardless of the number of hours or days worked.

• Employees should note the new procedures when certifying for benefits. If you or your employees have questions on how to do this, more information can be found here.

What’s the take away here for employers? If you have employees who are collecting partial unemployment, either by design or circumstance, consider your new costs as well as opportunities in having these employees only work their part-time, reduced schedule. Are there new options available to you on how to utilize/schedule these employees (less hours per day and more days per week?) as a result of these changes? Note that these changes do not apply to the Shared Work Program.

As always, we are happy to help answer any questions you have specific to your circumstances, so do not hesitate to reach out.