Continued Assistance Act changes to PEUC benefits

CLASSIFICATION
   EMPLOYMENT AND TRAINING ADMINISTRATION                Unemployment Insurance
               ADVISORY SYSTEM                           CORRESPONDENCE SYMBOL
          U.S. DEPARTMENT OF LABOR                       OUI/DUIO
             Washington, D.C. 20210                      DATE
                                                         December 31, 2020

ADVISORY:       UNEMPLOYMENT INSURANCE PROGRAM LETTER NO. 17-20
                Change 2

TO:             STATE WORKFORCE AGENCIES

FROM:           JOHN PALLASCH
                Assistant Secretary

SUBJECT:        Continued Assistance for Unemployed Workers Act of 2020—Pandemic
                Emergency Unemployment Compensation (PEUC) Program: Extension,
                Transition Rule, Increase in Total Benefits, and Coordination Rules.

1. Purpose. The purpose of this Unemployment Insurance Program Letter (UIPL) is to
   provide guidance about the changes to the PEUC program authorized by section 206 of the
   Continued Assistance for Unemployed Workers Act of 2020 (Continued Assistance Act).

2. Action Requested. The U.S. Department of Labor’s (Department) Employment and
   Training Administration (ETA) requests that State Workforce Administrators provide the
   information in this UIPL and all attachments to appropriate program and other staff in state
   workforce systems as they implement the Unemployment Insurance (UI)-related provisions
   in the Continued Assistance for Unemployed Workers Act of 2020 and the Coronavirus Aid,
   Relief, and Economic Security (CARES) Act, Public Law (Pub. L.) 116-136, that respond to
   the economic effects of the Coronavirus Disease 2019 (COVID-19) pandemic.

3. Summary and Background.

   a. Summary – On December 27, 2020, the President signed into law the Continued
      Assistance Act. Among other things, the Continued Assistance Act amended section
      2107 of the CARES Act of 2020. This Change 2 to UIPL No. 17-20 provides guidance
      about the following provisions in section 206 of the Continued Assistance Act: (i)
      extension of the PEUC program through weeks of unemployment ending on or before
      March 14, 2021; (ii) a new transition rule providing for the payment of PEUC phase-out
      benefits through April 5, 2021, for individuals receiving PEUC as of the week ending on
      or before March 14, 2021, only for those individuals who remain otherwise eligible for
      PEUC; (iii) an increase in the total amount of PEUC benefits available to 24 times the
      individual’s average weekly benefit amount (WBA) payable for weeks of unemployment
      beginning on or after enactment of the Continued Assistance Act; (iv) a new rule for
      coordination of the PEUC program with the regular unemployment compensation (UC)
      program that provides states with four options for implementation and allows
      individuals, under certain conditions, to continue to receive PEUC instead of regular UC
      in a new benefit year; and (v) a new rule for coordination of the PEUC program with the
   RESCISSIONS                                            EXPIRATION DATE
   None                                                   Continuing

   Extended Benefits (EB) program that requires individuals currently receiving EB to
   exhaust EB before resumption of PEUC eligibility. This UIPL also provides guidance
   about establishing entitlement to PEUC with respect to a second benefit year of regular
   UC. All other PEUC program requirements, as provided in Section 2107 of the CARES
   Act and UIPL Nos. 17-20 and 17-20, Change 1, remain the same.

b. Background – On March 27, 2020, the President signed into law the CARES Act, which
   includes the Relief for Workers Affected by Coronavirus Act set out in Title II, Subtitle
   A. Section 2107 of the CARES Act created a new temporary federal PEUC program
   that provides an amount equal to 13 times the individual’s average weekly benefit
   amount (generally 13 additional weeks of benefits) for weeks of unemployment ending
   on or before December 31, 2020, along with funding to states for the administration of
   the program. On April 10, 2020, ETA issued UIPL No. 17-20 to provide PEUC
   program implementation instructions to states. ETA issued Change 1 to UIPL No. 17-20
   on May 13, 2020, to provide states with technical assistance in the administration of the
   PEUC program.

   The Federal Pandemic Unemployment Compensation (FPUC) program initially
   provided a supplement to the WBA payable for UI programs, including PEUC, through
   weeks of unemployment that ended on or before July 31, 2020. Individuals’ PEUC
   accounts would also include the FPUC amounts. The FPUC program has been
   reauthorized and modified in the Continued Assistance Act, and FPUC amounts will
   once again be added to individuals’ PEUC accounts. A new WBA supplement, Mixed
   Earners Unemployment Compensation, was established in the Continued Assistance Act
   and, under certain circumstances, may be payable along with PEUC in states that elect to
   offer it. Guidance on these provisions is forthcoming.

   Importance of Program Integrity. Addressing improper payments and fraud is a top
   priority for the Department and the entire UI system. It is critical that states implement
   UI programs and provisions to ensure that payments are being made to eligible
   individuals and that states have aggressive strategies and tools in place to prevent,
   detect, and recover fraudulent payments, with a particular emphasis on imposter fraud by
   claimants using false identities.

   The programs and provisions within the Continued Assistance Act, the Emergency
   Unemployment Insurance Stabilization and Access Act of 2020 (EUISAA), and the
   CARES Act operate in tandem with the fundamental eligibility requirements of the
   Federal-State UI program. These requirements include that an individual file
   certifications with respect to each week of unemployment that is paid and that an
   individual be able to work and available for work except as specifically provided for in
   statute. In addition, the Continued Assistance Act includes new program integrity
   requirements for the Pandemic Unemployment Assistance (PUA) and PEUC programs
   with which states must comply.

   Some states remain in the midst of managing extraordinary workloads due to the effects
   of the spread of COVID-19. During this time, there is a heightened need for states to
   maintain a steadfast focus on UI functions and activities that ensure program integrity

      and the prevention and detection of improper payments and fraud across all programs
      operated within the UI system.

      UIPL No. 23-20, published on May 11, 2020, discusses program integrity for the UI
      system. UIPL No. 28-20, published on August 31, 2020, provides states with funding to
      assist with efforts to prevent and detect fraud and identity theft and recover fraud
      overpayments in the PUA and PEUC programs.

      States play a fundamental role in ensuring the integrity of the UI system. While states
      have been provided some flexibilities as a result of the COVID-19 pandemic, those
      flexibilities are generally limited to emergency temporary actions as needed to respond
      to the spread of COVID-19. States must ensure that individuals only receive benefits in
      accordance with federal and state law.

      ETA strongly encourages states to utilize the tools, resources, and services of the UI
      Integrity Center, funded by the Department and operated in partnership with the
      National Association of State Workforce Agencies. One of the key assets to support
      addressing fraud is the Integrity Data Hub (IDH), which includes a variety of data sets to
      prevent and detect fraud based on identity theft at the time of application, including an
      identity verification solution. ETA also encourages states to consult with the UI
      Integrity Center on data analytics and to prioritize IDH hits, as well as on other tools and
      solutions available through the private sector that complement the IDH. In UIPL No.
      28-20, the Department explained its expectation that states connect to the IDH no later
      than March 31, 2021 and encouraged states to use their share of the funding provided
      through that UIPL to support IDH connection as soon as possible. There is also a range
      of other tools on the market that states should consider when combating fraud and
      ensuring program integrity.

4. Guidance.

   a. In general. As explained below, the PEUC provisions in the Continued Assistance Act
      apply as if these provisions were included in the CARES Act enacted on March 27,
      2020, except that no PEUC amounts will be payable under the provisions of the
      Continued Assistance Act with respect to any week of unemployment beginning before
      the date of enactment of the Continued Assistance Act (December 27, 2020). This
      means that the programmatic changes apply to individuals who established PEUC
      eligibility before enactment of the Continued Assistance Act. However, no PEUC may
      be paid based on the changes authorized by the Continued Assistance Act for any
      week of unemployment beginning before December 27, 2020.

      Note that under the Continued Assistance Act, a new return to work reporting
      requirement is established and applies to any state that enters into an agreement to
      administer any of the UI provisions in the CARES Act, including the PEUC program,
      beginning 30 days after enactment of the Continued Assistance Act. States must
      implement and utilize a method to address circumstances when PEUC recipients refuse
      to return to work or to accept an offer of suitable work without good cause. This
      includes a reporting method for employers and a plain-language notice provided to such
      individuals. Guidance about this requirement is forthcoming.

   All other PEUC program parameters, as provided in Section 2107 of the CARES Act
   and UIPL Nos. 17-20 and 17-20, Change 1, remain the same.

   The UC eligibility flexibilities authorized in the Emergency Unemployment Insurance
   Stabilization and Access Act of 2020 remain available to states for the PEUC program.
   Additionally, Section 2107(a)(7)(B) of the CARES Act requires that states provide
   flexibility with respect to the “actively seeking work” requirements for PEUC “in case
   of individuals unable to search for work because of COVID-19, including because of
   illness quarantine, or movement restriction.” As a reminder, individuals receiving
   PEUC may participate in a Short-Time Compensation (STC) program. (See Question 19
   of Attachment I to UIPL No. 14-20, Change 1.).

   The PEUC agreements that states entered into in March 2020 incorporate by reference
   subsequent amendments to Section 2107 of the CARES Act. As a condition of the
   agreement, states must operate the PEUC program consistent with section 206 of the
   Continued Assistance Act and related guidance issued by the Department. Thus, states
   do not need to enter into new agreements in order to continue to operate the PEUC
   program.

b. Extension of Program. Under the CARES Act, the PEUC program applied to weeks of
   unemployment beginning after the date states entered into an agreement with the
   Department to operate the PEUC program and ending on or before December 31, 2020.
   There is no gap in authority to pay PEUC. These benefits are payable for the week
   of unemployment ending on January 2, 2021 (or January 3, 2021). The Continued
   Assistance Act extends the PEUC program through weeks of unemployment ending on
   or before March 14, 2021. In states where a week of unemployment ends on a Saturday,
   the last compensable week before the PEUC program expires is now the week ending
   March 13, 2021. In states where a week of unemployment ends on a Sunday, the last
   compensable week before the PEUC program expires is now the week ending March 14,
   2021.

c. Transition Rule. Notwithstanding the expiration of the PEUC program on March 14,
   2021, individuals who have not exhausted their PEUC accounts as of March 14, 2021,
   are receiving PEUC with respect to the week ending March 13 or 14, 2021, and are
   otherwise eligible, may continue to be paid for weeks of unemployment for weeks
   beginning on or before April 5, 2021. PEUC payments may not be made for a week of
   unemployment beginning after April 5, 2021, even if the individual has a remaining
   PEUC balance. In states where weeks of unemployment end on Saturday, this means the
   last week of PEUC payable during this phase-out is the week ending April 10, 2021. In
   states where a week of unemployment ends on a Sunday, the last week of PEUC payable
   during this phase-out is the week ending April 11, 2021.

d. Increase in Number of Weeks of Benefits. Under the CARES Act, eligible individuals
   would have an amount equal to 13 times their average WBA established in their PEUC
   accounts, (which also included the amount of FPUC available under the CARES Act),
   which results in 13 weeks of benefits for individuals who are totally unemployed.
   (Individuals may receive more than 13 weeks of benefits if they are receiving a reduced

WBA for weeks of partial unemployment.) The Continued Assistance Act increases the
amount established in an individual’s PEUC account to 24 times the individual’s average
WBA (and also includes the amount of FPUC available under the CARES Act as
amended by the Continued Assistance Act), which translates to 24 weeks of benefits for
individuals who are totally unemployed. (Individuals may receive more than 24 weeks
of benefits if they are receiving a reduced WBA for weeks of partial unemployment.)

   New PEUC accounts. Individuals who establish PEUC eligibility with respect to
    weeks of unemployment beginning on or after the date of enactment of the
    Continued Assistance Act (December 27, 2020) will have their PEUC accounts
    established with the amount equal to 24 times their average WBA amount, as
    amended by the Continued Assistance Act.

   Previously established PEUC accounts. Any individual who established eligibility
    for PEUC before the date of enactment of the Continued Assistance Act (December
    27, 2020), including PEUC exhaustees and current PEUC recipients, will have his or
    her PEUC accounts augmented by an amount equal to an additional 11 times the
    individual’s average WBA—the difference between the new amount of 24 times the
    individual’s average WBA and the CARES Act-established amount of 13 times the
    individual’s average WBA. However, such additional amounts are ONLY
    payable with respect to a week of unemployment beginning on or after the date
    of enactment of the Continued Assistance Act.

Thus, even if the individual had weeks of unemployment commencing before enactment
of the Continued Assistance Act with respect to which the individual was eligible for no
UI benefits, and could have been eligible for PEUC based upon the increase in the
PEUC account from 13 to 24 times the WBA, the additional PEUC amounts may
NOT be paid for any weeks that begin prior to enactment of the extension on
December 27, 2020. In other words, the additional PEUC may only be paid for
weeks of unemployment that begin on or after December 27, 2020.

If an individual did not exhaust his or her initial entitlement to PEUC before the date of
enactment of the Continued Assistance Act, his or her PEUC account must be
augmented with the additional amount and he or she must exhaust all PEUC entitlement
before becoming eligible for EB or other UI programs, except to the extent that the
regular UC coordination provisions described in Section 4.e below provide otherwise.
An individual who exhausts PEUC with the week of unemployment ending on
December 26, 2020 (or December 27, 2020) is considered not to have exhausted the
initial entitlement to PEUC and must have his or her PEUC account augmented and
exhaust PEUC entitlement as noted just above.

An individual who was not in active claim status for any UI program (e.g., EB, PUA, or
regular UC) for the week of unemployment ending on December 26, 2020 (or December
27, 2020) will have to reopen his or her PEUC claim. Because there has been a break in
claim certification, the state will need to ensure there are no eligibility issues and that
there has been no intervening employment that would disqualify the individual for

   PEUC. When the individual is in continuing claim status for any UI program, the state
   will not need to take an application.

   States must individually notify all individuals who are currently receiving PEUC,
   individuals who have already exhausted PEUC, and anyone else for whom a PEUC
   account had previously been established (e.g., individuals with remaining PEUC
   balances who stopped filing PEUC claims) of the additional weeks of PEUC benefits
   available. States must also inform PEUC exhaustees about what they must do to reopen
   their PEUC claims. The distribution method should be consistent with other
   correspondence provided to the claimant by the state, which may include mail, email, or
   through the individual’s online web portal.

   All PEUC augmentations are considered monetary redeterminations. States will receive
   administrative funding for the monetary redetermination activity reported on the UI-3,
   line 19.

e. Coordination with Regular Unemployment Compensation.

     i.   In general. The Continued Assistance Act modifies the PEUC program
          requirement regarding the impact of subsequent regular UC entitlement on PEUC
          eligibility. As initially authorized under the CARES Act, an individual must
          have exhausted his or her regular UC entitlement before being eligible for PEUC.
          Thus, under the CARES Act, if an individual would qualify for a subsequent
          benefit year of regular UC, the individual would no longer be eligible for PEUC.
          As authorized by the Continued Assistance Act, an individual may continue to be
          eligible for PEUC if he or she meets the requirements in section 206(c)(1) of the
          Continued Assistance Act. Those requirements include the regular UC WBA
          payable on that subsequent benefit year being lower than the PEUC WBA by $25
          or more and that the individual has remaining entitlement to PEUC from the
          previous benefit year.

          The Continued Assistance Act provides each state a choice among four different
          options for coordinating PEUC with regular UC. The four different options (i.e.,
          the State Options) are described below. States must notify the appropriate ETA
          Regional Office about which State Option they will implement and notify the
          ETA Regional Office if the state later changes its selected option.

    ii.   Criteria for determining if an individual may continue to receive PEUC when
          eligible for regular UC in a subsequent benefit year. Individuals may be eligible
          to continue to receive PEUC instead of regular UC if all of the following criteria
          are met:

                 Criterion #1: The individual has been determined to be entitled to PEUC
                 with respect to a benefit year;

                 Criterion #2: The benefit year with respect to which the PEUC
                 entitlement had been established (i.e., the parent claim) has expired after

              the date of the enactment of the Continued Assistance Act (December 27,
              2020);

              Criterion #3: The individual has remaining entitlement to PEUC with
              respect to such benefit year; and

              Criterion #4: The individual would qualify for regular UC in a subsequent
              (new) benefit year and the WBA for regular UC in the new benefit year
              would be at least $25 less than the WBA payable on the individual’s
              PEUC claim.

       With regard to criterion #2, the potential to continue to receive PEUC
       notwithstanding having regular UC entitlement in a subsequent benefit year
       applies only for individuals for whom the benefit year expires after the date of
       enactment of the Continued Assistance Act (December 27, 2020). Individuals
       who previously ceased receiving PEUC because of regular UC entitlement in a
       subsequent benefit year are not eligible to resume receiving PEUC until all
       regular UC benefit entitlement is exhausted.

       Also with regard to criterion #2, in order for the possibility to continue PEUC
       receipt to apply to an individual, the benefit year with respect to which the PEUC
       claim was established (i.e., parent claim) must have expired. For example, if the
       benefit year that is the basis for the PEUC claim has not expired and the
       individual has sufficient wages to establish a new benefit year in a state other
       than the state in which the individual has the parent claim (e.g., an interstate
       claim), the individual may not continue receiving PEUC due to the regular UC
       eligibility in the other state. Regardless of the difference in the WBA amount
       between PEUC and the WBA for regular UC in a new benefit year in another
       state, such an individual is no longer eligible for PEUC under criterion #2. The
       authority to continue receiving PEUC only applies if the benefit year that is the
       basis for the PEUC claim has expired.

       With regard to criterion #4, when making a determination about whether an
       individual’s regular UC WBA is at least $25 less than the PEUC WBA, the state
       must take into consideration the individual’s potential regular UC eligibility in a
       subsequent benefit year in each state where wages were earned (e.g., combined
       wage claims). For example, if an individual can establish entitlement to regular
       UC in a subsequent benefit year in another state(s), the regular UC WBA payable
       to the individual in each of those states must be at least $25 lower than the PEUC
       WBA in order for that individual to continue to be eligible to receive PEUC.

iii.   State options for determining eligibility for PEUC or regular UC payments. The
       Continued Assistance Act provides for each state to choose among four different
       options for coordinating PEUC with regular UC for PEUC claimants who meet
       the criteria above. The option chosen will determine whether individuals who
       meet all four of the criteria above will be paid PEUC or regular UC. Each state
       will select one of the following options:

       State Option #1: Establish a new benefit year for the individual, but defer
       payment of the new regular UC claim until the PEUC claim has been
       exhausted (if permissible under state law);

       State Option #2: Defer the establishment of the new benefit year and “put
       on hold” (i.e., “freeze”) the base period wages currently available for use
       in establishing the new benefit year until the PEUC claim has been
       exhausted (if permissible under state law);

       State Option #3: Establish the new benefit year, commence regular UC
       payments, and augment the new regular UC WBA with funds remaining
       in the claimant’s PEUC account generally equal to the difference between
       the new regular UC WBA and the PEUC claim’s WBA, such that the
       sum, i.e., the total benefit amount payable in a week is equal to the PEUC
       WBA (if permissible under state law); or

       State Option #4: For any individual who elects not to file a claim for
       regular UC under the new benefit year, the state will determine PEUC
       eligibility without regard to the unclaimed regular UC and continue to
       pay on the PEUC claim.

The state may select only one option and apply it to coordination of the PEUC
and regular UC programs for all individuals who meet the four criteria. The state
may need to enact an amendment to its laws in order to have authority to
implement one of the first three options. A state may only change its selected
option following enactment of a new state law that makes implementation of the
newly selected option permissible in the state. The four options are discussed
further below.

State Option #1: Eligible individuals will file a regular UC initial claim in a new
benefit year. However, each individual will continue to receive PEUC until his
or her PEUC account is exhausted or until the expiration of the PEUC program,
whichever comes first. Thereafter, the state will pay the individual any regular
UC entitlement for the remainder of the benefit year that was established, but
with respect to which regular UC benefit payment had been deferred. Under
State Option #1, states may not pay PEUC and regular UC with respect to the
same weeks of unemployment.

Notification Requirement. States must notify individuals of the requirement to
file a regular UC initial claim as a condition of continued PEUC eligibility and
notify them of the deferral of their regular UC eligibility, and their regular UC
benefit rights, including the WBA, maximum duration of payments, maximum
benefit entitlement, and the benefit year end date. States will process the initial
claim for regular UC, but will not process any continued claims for regular UC
or make any regular UC payments until the individual exhausts PEUC or the
PEUC program expires, whichever occurs first.

State Option #2: States must defer the establishment of any new benefit year for
claimants with PEUC claims until after the exhaustion of the PEUC claim. The
individual’s new benefit year will be based on the wages that would have been
used had the state not deferred establishment of the new benefit year and paid
PEUC first. Under State Option #2, states may not pay PEUC and regular UC
with respect to the same weeks of unemployment. States choosing this option
must, at a minimum, permit the deferment of the benefit year through the
statutory end of the transition period for the PEUC program, i.e., April 5, 2021.

Notification Requirement. States must notify individuals of the requirement to
defer establishment of a new benefit year of regular UC until after exhaustion of
PEUC as a condition of PEUC eligibility and that the wages that would have
been used to establish regular UC entitlement will be “put on hold” so that those
earnings may be used to establish the new benefit year after the individual
exhausts PEUC or the PEUC program expires, whichever occurs first. The
individual will not file an initial claim for regular UC and the state will not
process a regular UC initial claim until after PEUC exhaustion or program
expiration.

State Option #3: The state will establish the new benefit year and the new regular
UC WBA will be augmented with amounts remaining in the individual’s PEUC
account in order to increase the individual’s payment to the higher PEUC WBA.
This augmentation may only occur until the individual’s PEUC account is
exhausted or until the PEUC program expires (the week of unemployment
ending on April 10, 2021, in most states), whichever happens first. Due to the
potential for PEUC account exhaustion and the PEUC program end date, the
augmented payments provided for under this option would not necessarily be
available for all weeks of regular UC that are paid during the new benefit year.
After the PEUC amounts are exhausted (or the PEUC program ends), only the
regular UC WBA would be payable with respect to each week of unemployment.
If the individual exhausts regular UC entitlement before exhausting PEUC and
the PEUC program has not yet expired, an eligible individual may resume receipt
of any remaining PEUC entitlement, payable at the original PEUC WBA.

Under State Option #3, both a regular UC payment and a (reduced) PEUC
payment are made with respect to the same week of unemployment. Note that
PEUC overpayment recovery requirements are not necessarily the same as
provided under state law for the regular UC program. Section F of Attachment I
to UIPL No. 17-20 explains that a state may not offset more than 50 percent of
any PEUC payment to recover overpayments. Thus, if states are recovering
previous overpayments via offset, PEUC guidance must be followed for the
portion of the weekly payment that is PEUC.

Notification Requirement. States must notify individuals of the requirement to
file a regular UC initial claim as a condition of PEUC eligibility and that
individuals, if otherwise eligible, will receive regular UC and a partial PEUC
payment with respect to the same week. States must also provide information to
individuals regarding their remaining PEUC benefit rights, including their

reduced WBA, the remaining balance in their individual PEUC accounts, and
their regular UC benefit rights, including the WBA, duration, maximum benefit
entitlement, and the benefit year end date. States will process the initial claim for
regular UC, any continued claims for regular UC, and any continued claims for
PEUC, and will make such benefit payments to eligible individuals.

State Option #4: States will offer an individual the choice of continuing receipt
of PEUC or establishing a new regular UC benefit year when he or she first
becomes eligible for regular UC. Once an individual makes an informed choice
to continue receiving PEUC, the state will continue to pay PEUC (if the
individual is otherwise eligible) until exhaustion of the individual’s PEUC
account or program expiration, whichever happens first. States are only required
to offer the choice once. States are not required to offer the choice each
subsequent calendar quarter. As explained below, states, in their notification to
individuals about the choice, must provide individuals with sufficient
information to make an informed choice. Sufficient information includes an
explanation of the potential impact on regular UC eligibility of waiting until
subsequent calendar quarters to establish a new benefit year. This notification
will also make individuals aware that they may later file an initial regular UC
claim.

If an individual who chose to continue to receive PEUC later elects to establish a
new regular UC benefit year, even though he or she still has remaining PEUC
entitlement, the state must stop payments of PEUC and establish the new benefit
year. Under State Option #4, once the individual chooses to file a new regular
UC benefit year, the choice no longer applies. Once an individual chooses to
establish a new regular UC benefit year, he or she may not revert to PEUC while
he or she has remaining regular UC entitlement.

If an individual elects to continue to receive PEUC before establishing a new
regular UC benefit year under State Option #4 and there are not sufficient funds
in the individual’s account for the final week payable of PEUC to pay the full
WBA, a state may not augment the partial PEUC week with regular UC funds
based on entitlement in a new benefit year. PEUC and regular UC remain
separate programs. Unless a state chooses State Option #3, individuals may not
receive PEUC with respect to the same week of unemployment for which the
individual receives regular UC.

Notification Requirement. With respect to Option #4, states must provide
sufficient notice allowing an individual to make an informed choice between
continuing PEUC receipt and establishing regular UC entitlement in a new
benefit year. Such notice must be made directly to each individual and may not
be satisfied through mass communication. Notice to individuals must contain the
following information:

      The individual’s potential entitlement under a new regular UC claim
       (including WBA, duration, and maximum benefit entitlement);

                 The consequences of remaining on PEUC versus filing a new regular UC
                  claim (e.g., where a new claim is not filed, wages used to qualify for
                  regular UC will generally diminish every quarter an individual remains
                  on PEUC because such wages are no longer in the base period);
                 Information that the individual may have the option to switch to a regular
                  UC claim at any time, including during any subsequent quarter, provided
                  there are sufficient base period wages to support a new regular UC claim;
                 Information that the individual may not switch back to PEUC once the
                  individual switches to regular UC, until regular UC is exhausted;
                 Instructions on how the individual may advise the state of his or her
                  election;
                 Information on how to contact the state to ask questions or to schedule
                  interviews to provide the appropriate information and to offer an
                  opportunity to make an election; and
                 Information that advises the individual that failure to respond to the
                  notice within a specified period of time (to be determined by the state, but
                  the state must make a reasonable attempt to obtain a response) will
                  constitute an election to continue on PEUC and that the state will
                  continue to pay PEUC if the individual is otherwise eligible and
                  continues to claim PEUC.

           A state may determine the appropriate method to provide the notice outlined
           above (that provides the individual with sufficient information to make an
           informed choice) based on the state’s filing procedures. Appropriate methods for
           providing notice include, but are not limited to:

                 Providing written notification to the affected individuals by mail or email;
                  or
                 Providing appropriate information via the individual’s web portal to
                  allow the individual to make an election through the web portal.

           Under State Option #4, if individuals choose to file initial claims for regular UC,
           the state will process such claims and any continued claims, and make regular
           UC payments to eligible individuals, but would not make any PEUC payments to
           such individuals. If individuals choose to continue to file PEUC continued
           claims, the state will process such claims and make PEUC payments, but would
           not make any regular UC payments to such individuals.

f. Coordination with Extended Benefits. Under the CARES Act, an individual who
   exhausts PEUC may commence receipt of EB, if he or she is otherwise eligible. With
   the Continued Assistance Act increasing the total amount of PEUC benefits available for
   everyone who has established a PEUC claim, individuals who have already transitioned
   to the EB program ordinarily would no longer be considered PEUC exhaustees and the
   CARES Act would require that these individuals be switched back to PEUC if the
   individual is otherwise eligible. However, section 206(c)(2) of the Continued Assistance
   Act provides that any individual who is receiving EB for the week of unemployment
   that includes December 27, 2020 (the date of enactment of the Continued

   Assistance Act) shall not be eligible for PEUC until the individual has exhausted all
   rights to EB. Because December 27, 2020, is the beginning of a week of
   unemployment in most states, an individual who exhausted PEUC with the week ending
   December 26, 2020, would not have begun receiving EB as of December 27, 2020.
   Thus, this coordination rule only applies to an individual who exhausted his or her initial
   entitlement to PEUC and began receiving EB no later than the week ending December
   26, 2020—the last week of unemployment ending prior to the enactment of the
   Continued Assistance Act. Such an individual will continue receiving EB, provided he
   or she is otherwise eligible, for weeks of unemployment beginning on or after enactment
   of the Continued Assistance Act. If, upon exhaustion of EB, an individual remains
   unemployed and otherwise eligible for PEUC, and the PEUC program has not yet
   expired, the individual would commence receipt of PEUC with the additional amount of
   PEUC benefits authorized under the Continued Assistance Act.

g. Coordination with PUA. The Continued Assistance Act does not include a new
   coordination provision for PEUC with the Pandemic Unemployment Assistance (PUA)
   program. Thus, individuals who are receiving PUA and gain augmented entitlement to
   PEUC under the Continued Assistance Act will no longer be eligible for PUA until all
   PEUC entitlement has been exhausted. PUA payments must cease for such individuals
   after an appropriate period of time for a state to take necessary actions to make payments
   of the augmented amounts of PEUC provided in the Continued Assistance Act. The
   Secretary of Labor will determine the appropriate period of time for a state to take such
   actions, during which the individual’s continued receipt of PUA will not be considered
   an overpayment. Refer to additional detail in UIPL No. 16-20 and its Changes.

h. Entitlement to PEUC with respect to a subsequent benefit year. Particularly with the
   extension of the PEUC program, it is possible that an individual may become a regular
   UC exhaustee with respect to entitlement established in more than one benefit year. As
   a result, it is possible that an individual may be able to establish PEUC entitlement more
   than once. In this case, the individual must have exhausted all PEUC entitlement with
   respect to the first benefit year in addition to exhausting all regular UC entitlement in the
   second benefit year before being potentially eligible for PEUC with respect to the
   second benefit year. At that point, the state would determine PEUC entitlement based
   on the average WBA payable during the second benefit year.

i. Reporting Instructions. As a reminder, states must continue to submit the required
   PEUC program reports, which are the ETA 207, ETA 218, ETA 227, ETA 5130 and
   ETA 5159. States are to submit these reports electronically by using separate PEUC
   entry screens that are available through the UI Required Reports electronic reporting
   system. States must also report PEUC activity on the ETA 2112, ETA 539 and UI-3 as
   specified in Section G.2. of Attachment I of UIPL No. 17-20. For instructions on ETA
   227 reporting, please follow guidance provided in Section 4.b. of UIPL No. 17-20,
   Change 1.

   Unless otherwise noted, definitions of items follow the definitions in the regular
   program as specified in ETA Handbook 401, 5th Edition. Due dates are the same as the
   regular versions of reports.

       States must continue to submit all reports as long as there is activity. However, states
       only need to submit reports with non-zero data.

5. Inquiries. States should direct inquiries to the email account [email protected] and copy
   the appropriate ETA Regional Office.

6. References.

      Continued Assistance for Unemployed Workers (Continued Assistance Act) of 2020,
       enacted on December 27, 2020;
      Coronavirus Aid, Relief, and Economic Security (CARES) Act, 2020, Pub. L. 116-136,
       including Title II Subtitle A Relief for Workers Affected by Coronavirus Act;
      Section 4102, Families First Coronavirus Response Act, Pub. L. 116-127, Division D,
       Emergency Unemployment Insurance Stabilization and Access Act of 2020 (EUISAA),
       Pub. L. 116-127;
      Federal-State Extended Unemployment Compensation Act of 1970, 26 U.S.C. §3304
       note;
      20 C.F.R. Part 615;
      UIPL No. 09-21, Continued Assistance for Unemployed Workers Act of 2020 (Continued
       Assistance Act) – Summary of Key Unemployment Insurance (UI) Provisions, issued
       December 30, 2020, https://wdr.doleta.gov/directives/corr_doc.cfm?DOCN=3831;
      UIPL 28-20, Addressing Fraud in the Unemployment Insurance (UI) System and
       Providing States with Funding to Assist with Efforts to Prevent and Detect Fraud and
       Identity Theft and Recover Fraud Overpayments in the Pandemic Unemployment
       Assistance (PUA) and Pandemic Emergency Unemployment Compensation (PEUC)
       Programs, issued August 31, 2020,
       https://wdr.doleta.gov/directives/corr_doc.cfm?DOCN=8044;
      UIPL No. 23-20, Program Integrity for the Unemployment Insurance (UI) Program and
       the UI Programs Authorized by the Coronavirus Aid, Relief, and Economic Security
       (CARES) Act of 2020 – Federal Pandemic Unemployment Compensation (FPUC),
       Pandemic Unemployment Assistance (PUA), and Pandemic Emergency Unemployment
       Compensation (PEUC) Programs, issued May 11, 2020,
       https://wdr.doleta.gov/directives/corr_doc.cfm?DOCN=4621;
      UIPL No. 17-20, Coronavirus Aid, Relief, and Economic Security (CARES) Act of
       2020— Pandemic Emergency Unemployment Compensation (PEUC) Program
       Operating, Financial, and Reporting Instructions, issued on April 10, 2020,
       https://wdr.doleta.gov/directives/corr_doc.cfm?DOCN=8452;
      UIPL No. 17-20, Change 1, Coronavirus Aid, Relief, and Economic Security (CARES)
       Act of 2020— – Pandemic Emergency Unemployment Compensation (PEUC) Program
       Operating, Financial, and Reporting Instructions, issued on May 13, 2020,
       https://wdr.doleta.gov/directives/corr_doc.cfm?DOCN=8689;
      UIPL No. 16-20, Coronavirus Aid, Relief, and Economic Security (CARES) Act of 2020
       – Pandemic Unemployment Assistance (PUA) Program Operating, Financial, and
       Reporting Instructions, issued on April 05, 2020,
       https://wdr.doleta.gov/directives/corr_doc.cfm?DOCN=4628;
      UIPL No. 16-20, Change 1, Coronavirus Aid, Relief, and Economic Security (CARES)
       Act of 2020 – Pandemic Unemployment Assistance (PUA) Program Reporting

       Instructions and Questions and Answers, issued on April 27, 2020,
       https://wdr.doleta.gov/directives/corr_doc.cfm?DOCN=5899;
      UIPL No. 16-20, Change 2, Coronavirus Aid, Relief, and Economic Security (CARES)
       Act of 2020 – Pandemic Unemployment Assistance (PUA) Program Reporting
       Instructions and Questions and Answers, issued on July 21, 2020,
       https://wdr.doleta.gov/directives/corr_doc.cfm?DOCN=5479;
      UIPL No. 16-20, Change 3, Coronavirus Aid, Relief, and Economic Security (CARES)
       Act of 2020 2020 – Eligibility of Individuals who are Caregivers for Pandemic
       Unemployment Assistance (PUA) in the Context of School Systems Reopening, issued on
       August 27, 2020, https://wdr.doleta.gov/directives/corr_doc.cfm?DOCN=3849;
      UIPL No. 15-20, Coronavirus Aid, Relief, and Economic Security (CARES) Act of 2020
       – Federal Pandemic Unemployment Compensation (FPUC) Program Operating,
       Financial, and Reporting Instructions, issued on April 14, 2020,
       https://wdr.doleta.gov/directives/corr_doc.cfm?DOCN=9297;
      UIPL No. 15-20, Change 1, Coronavirus Aid, Relief, and Economic Security (CARES)
       Act of 2020 – Federal Pandemic Unemployment Compensation (FPUC) Program
       Operating, Financial, and Reporting Instructions, issued on May 9, 2020,
       https://wdr.doleta.gov/directives/corr_doc.cfm?DOCN=3946;
      UIPL No. 15-20, Change 2, Coronavirus Aid, Relief, and Economic Security (CARES)
       Act of 2020 – Federal Pandemic Unemployment Compensation (FPUC) Program
       Operating, Financial, and Reporting Instructions, issued on June 15, 2020,
       https://wdr.doleta.gov/directives/corr_doc.cfm?DOCN=7785;
      UIPL No. 14-20, Coronavirus Aid, Relief, and Economic Security (CARES) Act of 2020
       – Summary of Key Unemployment Insurance (UI) Provisions and Temporary Emergency
       State Staffing Flexibility, issued on April 2, 2020,
       https://wdr.doleta.gov/directives/corr_doc.cfm?DOCN=3390;
      UIPL No. 13-20, Families First Coronavirus Response Act, Division D Emergency
       Unemployment Insurance Stabilization and Access Act of 2020, issued March 22, 2020,
       https://wdr.doleta.gov/directives/corr_doc.cfm?DOCN=8634; and
      UIPL No. 10-20, Unemployment Compensation (UC) for Individuals Affected by the
       Coronavirus Disease 2019 (COVID-19), issued March 12, 2020,
       https://wdr.doleta.gov/directives/corr_doc.cfm?DOCN=8893.

7. Attachment(s).

      Attachment I: Statutory Language of Section 206 of the Continued Assistance for
       Unemployed Workers Act of 2020

                                                      Attachment I to UIPL No. 17-20, Change 2

                         Statutory Language of Section 206 of the
                 Continued Assistance for Unemployed Workers Act of 2020

SEC. 206. EXTENSION AND BENEFIT PHASEOUT RULE FOR PANDEMIC
EMERGENCY UNEMPLOYMENT COMPENSATION.

    (a) IN GENERAL.-Section 2107(g) of the CARES Act (15 U.S.C. 9025(g)) is amended to
        read as follows:
    "(g) APPLICABILITY.-
        "(1) IN GENERAL.-Except as provided in paragraphs (2) and (3), an agreement entered
into under this section shall apply to weeks of unemployment-
                "(A) beginning after the date on which such agreement is entered into; and
                "(B) ending on or before March 14, 2021.
        "(2) TRANSITION RULE FOR INDIVIDUALS REMAINING ENTITLED TO
PANDEMIC EMERGENCY UNEMPLOYMENT COMPENSATION AS OF MARCH 14,
2021.-ln the case of any individual who, as of the date specified in paragraph (l)(B), is receiving
Pandemic Emergency Unemployment Compensation but has not yet exhausted all rights to such
assistance under this section, Pandemic Emergency Unemployment Compensation shall continue
to be payable to such individual for any week beginning on or after such date for which the
individual is otherwise eligible for Pandemic Emergency Unemployment Compensation.
        "(3) TERMINATION.-Notwithstanding any other provision of this subsection, no
Pandemic Emergency Unemployment Compensation shall be payable for any week beginning
after April 5, 2021.".

   (b) INCREASE IN NUMBER OF WEEKS.-Section 2107(b)(2) of the CARES Act (15
       U.S.C. 9025(b)(2)) is amended by striking "13" and inserting "24".

    (c) COORDINATION RULES.-
        (1) COORDINATION OF PANDEMIC EMERGENCY UNEMPLOY- MENT
            COMPENSATION WITH REGULAR COMPENSATION.-Section 2107(b) of the
            CARES Act (15 U.S.C. 9025(b)) is amended by adding at the end the following :
        "(4) COORDINATION OF PANDEMIC EMERGENCY UNEMPLOYMENT
COMPENSATION WITH REGULAR COMPENSATION.-
        "(A) IN GENERAL.-If-
                "(i) an individual has been determined to be entitled to pandemic emergency
        unemployment compensation with respect to a benefit year;
                "(ii) that benefit year has expired;
                "(iii) that individual has remaining entitlement to pandemic emergency
        unemployment compensation with respect to that benefit year; and
                "(iv) that individual would qualify for a new benefit year in which the weekly
        benefit amount of regular compensation is at least $25 less than the individual's weekly
        benefit amount in the benefit year referred to in clause (i),
then the State shall determine eligibility for compensation as provided in subparagraph (B).

        "(B) DETERMINATION OF ELIGIBILITY.-For individuals described in subparagraph
(A), the State shall determine whether the individual is to be paid pandemic emergency
unemployment compensation or regular compensation for a week of unemployment using one of
the following methods:
                 "(i) The State shall, if permitted by State law, establish a new benefit year, but
        defer the payment of regular compensation with respect to that new benefit year until
        exhaustion of all pandemic emergency unemployment compensation payable with respect
        to the benefit year referred to in subparagraph (A)(i).
                 "(ii) The State shall, if permitted by State law, defer the establishment of a new
        benefit year (which uses all the wages and employment which would have been used to
        establish a benefit year but for the application of this subparagraph), until exhaustion of
        all pandemic emergency unemployment compensation payable with respect to the benefit
        year referred to in subparagraph (A)(i).
                 "(iii) The State shall pay, if permitted by State law-
                         "(I) regular compensation equal to the weekly benefit amount established
                 under the new benefit year; and
                         "(II) pandemic emergency unemployment compensation equal to the
                 difference between that weekly benefit amount and the weekly benefit amount for
                 the expired benefit year.
                 "(iv) The State shall determine rights to pandemic emergency unemployment
        compensation without regard to any rights to regular compensation if the individual elects
        to not file a claim for regular compensation under the new benefit year.".
        (2) COORDINATION OF PANDEMIC EMERGENCY UNEMPLOY- MENT
             COMPENSATION WITH EXTENDED COMPENSATION.-
             (A) INDIVIDUALS RECEIVING EXTENDED COMPENSATION AS OF THE
                 DATE OF ENACTMENT.- Section 2107(a)(5) of the CARES Act (15 U.S.C.
                 9025(a)(5)) is amended-
                 (i)     by striking "RULE.-An agreement" and inserting the following: "RULES.-
                 "(A) IN GENERAL.-Subject to subparagraph (B), an agreement"; and
                 (ii)    by adding at the end the following:
                 "(B) SPECIAL RULE.-ln the case of an individual who is receiving extended
        compensation under the State law for the week that includes the date of enactment of this
        subparagraph (without regard to the amendments made by subsections (a) and (b) of
        section 206 of the Continued Assistance for Unemployed Workers Act of 2020), such
        individual shall not be eligible to receive pandemic emergency unemployment
        compensation by reason of such amendments until such individual has exhausted all
        rights to such extended benefits.".
             (B) ELIGIBILITY FOR EXTENDED COMPENSATION.- Section 2107(a) of the
                 CARES Act (15 U.S.C. 9025(a)) is amended by adding at the end the following:
             "(8) SPECIAL RULE FOR EXTENDED COMPENSATION.-At the
option of a State, for any weeks of unemployment beginning after the date of the enactment of
this paragraph and before April 12, 2021, an individual's eligibility period (as described in
section 203(c) of the Federal-State Extended Unemployment Compensation Act of 1970 (26
U.S.C. 3304 note)) shall, for purposes of any determination of eligibility for extended
compensation under the State law of such State, be considered to include any week which
begins-

          "(A) after the date as of which such individual exhausts all rights to pandemic
   emergency unemployment compensation; and
          "(B) during an extended benefit period that began on or before the date described
   in subparagraph (A).".

(d) EFFECTIVE DATE.-
    (1) IN GENERAL.-Except as provided in paragraph (2), the amendments made by this
        section shall apply as if included in the enactment of the CARES Act (Public Law
        116-136), except that no amount shall be payable by virtue of such amendments with
        respect to any week of unemployment commencing before the date of the enactment
        of this Act.
    (2) COORDINATION RULES .- The amendments made by subsection (c)(l) shall apply
        to individuals whose benefit years, as described in section 2107(b)(4)(A)(ii) of the
        CARES Act, expire after the date of enactment of this Act.