On May 9, 2020, the U.S. Department of Labor published a program letter which answered a series of questions raised by states regarding the Federal Pandemci Unemployment Compensation (FPUC) program. The FPUC program, authorized by Section 2104 of the CARES Act, provides an additional $600 weekly payment to certain eligible individuals who are receiving other qualifying benefits.
The responses are split into three categories: Issuing Payments, Overpayments and Recovery, and Financial Information and Reporting. Some of the answers provided by DOL in UIPL No. 15-20 include:
- Question: Is the state required to make FPUC payments weekly?
Answer: The state must make FPUC payments on the same schedule as the state’s regular UC payments. If the state pays regular UC on a bi-weekly basis, it can maintain that same schedule for FPUC.
- Question: Is an individual who is working part-time, or has gone back to work part time, and is collecting partial UC benefits for a week eligible for FPUC?
Answer: Yes. An individual working part-time who otherwise meets state eligibility requirements for the underlying benefit is eligible to receive the FPUC payment.
- Question: Does the additional FPUC payment affect how much a person could earn while working par- time before a deduction is made from the weekly underlying benefit payment?
Answer: No. All earnings are deducted from the underlying UC benefit payment. If an individual’s earnings reduce the week’s underlying benefit payment to zero, the individual would not be eligible for FPUC for that week.
- Question: Are FPUC benefits subject to federal income tax withholding?
Answer: Yes. Both the underlying benefit payment and the FPUC benefit payment are subject to federal income tax withholding. Individuals may elect to have federal withholding deducted from their FPUC payments separately from the withholding for the underlying benefit payments.
- Question: May the state suspend benefit offsets to provide relief to unemployed individuals?
Answer: No. The state may not suspend benefit offsets. The Middle Class Tax Relief and Job Creation Act of 2012 changed the benefit offset provision from “may” to “shall” under both Section 3304(a)(4)(0), FUTA, and Section 303(g)(1), SSA, so federal UI law requires states to offset benefits.
- Question: How should states handle prosecutions of FPUC fraud overpayments?
Answer: Individuals who fraudulently obtain FPUC benefits are subject to prosecution under 18 U.S.C. § 1001, among other federal criminal statutes. States must pursue FPUC fraud cases in the same manner as all other federal UC fraud cases. For referrals of fraud cases to the U.S. Department of Labor’s Office of Inspector General (OIG), states should follow the guidance provided in UIPL No. 29-05.
“With all 50 states and two territories already providing this important benefit to eligible claimants, we hope today’s guidance assists these states and territories in continuing to faithfully execute this program during this challenging time,” said Assistant Secretary for Employment and Training John P. Pallasch in a news release. “The U.S. Department of Labor will continue to stand behind states as they administer this and other vital CARES Act programs, and today’s guidance is yet another example of our ongoing commitment.”
