State administration of FEMA Lost Wages Assistance

CLASSIFICATION
   EMPLOYMENT AND TRAINING ADMINISTRATION                  Unemployment Insurance
               ADVISORY SYSTEM                             CORRESPONDENCE SYMBOL
          U.S. DEPARTMENT OF LABOR                         OUI/DFAS
             Washington, D.C. 20210                        DATE
                                                           August 12, 2020

ADVISORY:       UNEMPLOYMENT INSURANCE PROGRAM LETTER NO. 27-20

TO:             STATE WORKFORCE AGENCIES

FROM:           JOHN PALLASCH
                Assistant Secretary

SUBJECT:        Presidential Memorandum on Authorizing the Other Needs Assistance Program
                for Major Disaster Declarations Related to Coronavirus Disease 2019 (COVID-
                19)—Unemployment Insurance (UI)-Related Technical Assistance for States
                Administering Lost Wages Assistance (LWA)

1. Purpose. To provide states with Unemployment Insurance (UI)-related technical assistance
   for administering LWA provided under Section 408(e)(2) in the Robert T. Stafford Disaster
   Relief and Emergency Assistance (Stafford) Act (42 U.S.C. 5174(e)(2)), as authorized by the
   Presidential Memorandum, Authorizing the Other Needs Assistance Program for Major
   Disaster Declarations Related to Coronavirus Disease 2019, issued on August 8, 2020.

2. Action Requested. The U.S. Department of Labor’s (Department) Employment and
   Training Administration (ETA) requests State Workforce Administrators to provide the
   information contained in this Unemployment Insurance Program Letter (UIPL) to appropriate
   program and other staff in state workforce systems.

3. Summary and Background.

   a. Summary – On August 8, 2020, the President issued a memorandum, Authorizing the
      Other Needs Assistance Program for Major Disaster Declarations Related to
      Coronavirus Disease 2019 (Presidential Memo), instructing the Secretary of Homeland
      Security, acting through the Federal Emergency Management Agency (FEMA), to make
      available other needs assistance (ONA) for lost wages in accordance with Section
      408(e)(2) of the Stafford Act (42 U.S.C. 5174(e)(2)). LWA will be administered by
      states and territories through a grant agreement with FEMA. FEMA will not administer
      benefits directly to individuals. The states and territories will distribute the funds through
      their UI system, as a supplemental payment. The Presidential Memo also directed the
      Department to provide FEMA and the states with technical assistance in the
      implementation of the program through their existing UI systems.

        To apply for a grant from FEMA to implement the LWA program, states may find
        information on the application process at the FEMA website at
        https://www.fema.gov/disasters/coronavirus/supplementa l-payments-lost-wages and at

 RESCISSIONS                                               EXPIRATION DATE
 None                                                      Continuing

   Grants.gov application at https://www.grants.gov/web/grants/view-
   opportunity.html?oppId=328611.

   Upon a grant award by FEMA, states and territories may provide eligible claimants $400
   per week, with a $300 federal contribution, in addition to the individual’s underlying
   unemployment benefit. LWA is funded using a 75 percent federal cost share and a 25
   percent state match. If states wish to provide this maximum $400 benefit to their
   claimants, they may fund $100 out of amounts allocated to them out of the Coronavirus
   Relief Fund (CRF), provided under Title V of the Coronavirus Aid, Relief, and Economic
   Security (CARES) Act (Public Law 116-136), or other state funding to cover the 25
   percent state match.

   Alternatively, states may count funds that are already used to provide regular state UI
   payments toward the state match, if they choose to do so, eligible claimants will receive a
   LWA payment of $300 from the Federal Government in addition to their weekly benefit
   amount. This is discussed further below.

   We acknowledge that American Samoa, Guam, and the Commonwealth of the Northern
   Mariana Islands are eligible to participate in the LWA program, though they do not have
   an underlying UI program. Technical assistance will be provided separately to these
   territories regarding the state match.

   LWA is payable to eligible claimants beginning with weeks of unemployment ending on
   or after August 1, 2020, through weeks of unemployment ending no later than December
   27, 2020.

   The LWA program may terminate earlier than December 27, 2020, if:

      FEMA expends the $44 billion from the Disaster Relief Fund (DRF) account
       designated by the President for the LWA program; or
      The total balance of the DRF account decreases to $25 billion; or
      Legislation is enacted that provides, due to the COVID-19 outbreak, supplemental
       federal unemployment compensation or similar compensation for unemployed or
       underemployed individuals.

   The Presidential Memo requires the Secretary of Labor to provide, as appropriate, and
   consistent with applicable law, technical assistance to FEMA and state governors in the
   implementation of LWA programs. This UIPL provides technical assistance to states and
   includes: (i) a summary of the requirements for “eligible claimants,” as further described
   on the FEMA website; (ii) important program dates; and (iii) financial instructions related
   to benefit costs and administrative costs.

b. Background—The CARES Act was signed into law by the President on March 27, 2020,
   and includes the Relief for Workers Affected by Coronavirus Act set out in Division A,
   Title II, Subtitle A, as well as the CRF set out in Title V. The CARES Act provides

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      emergency assistance for certain individuals, families, and businesses affected by the
      COVID-19 pandemic.

      Section 2104 of the CARES Act provided for a temporary emergency increase in
      unemployment compensation benefits, referred to as Federal Pandemic Unemployment
      Compensation (FPUC), and included funding to states for the administration of such
      program. This program previously provided eligible individuals with $600 per week in
      addition to the weekly benefit amount they received from certain other unemployment
      compensation (UC) programs. The Department issued UIPL Nos. 15-20 and 15-20,
      Change 1, setting forth operating and financial instructions for the FPUC program.

      If a state chooses to implement LWA, an otherwise eligible individual could receive his
      or her last payment of FPUC for the week-ending July 25, 2020 and then his or her first
      week of LWA for the week-ending August 1, 2020 or later.

4. Guidance.

   a. Eligible Claimants. As provided in the Presidential Memo, an “eligible claimant” is an
      individual who: (1) provides self-certification that he or she is unemployed or partially
      unemployed due to disruptions caused by COVID-19 and (2) receives, for the week of
      unemployment with respect to which LWA is sought, at least $100 of regular UC or any
      of the following UC programs:

         Unemployment Compensation for Federal Employees (UCFE);
         Unemployment Compensation for Ex-Servicemembers (UCX);
         Pandemic Emergency Unemployment Compensation (PEUC);
         Pandemic Unemployment Assistance (PUA);
         Extended Benefits (EB);
         Short-Time Compensation (STC);
         Trade Readjustment Allowances (TRA); and
         Payments under the Self-Employment Assistance (SEA) program.

      States will need to develop a self-certification process in accordance with FEMA
      instructions for claimants to certify weekly that they are unemployed or partially
      unemployed due to disruptions caused by COVID-19.

      LWA is not payable to individuals collecting Disaster Unemployment Assistance (DUA).
      Additionally, a number of state laws include provisions for extending the potential
      duration of benefits during periods of high unemployment for individuals in approved
      training who exhaust benefits, or for a variety of other reasons. Although some state laws
      call these programs “extended benefits,” the Department uses the term “additional
      benefits” (AB) for these state programs to avoid confusion with the Federal-State EB
      program. LWA is not payable to individuals who are receiving AB payments.

      For additional information for identifying eligible claimants, refer to the FEMA website.

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b. Important Program Dates. LWA is payable for weeks of unemployment ending on or
   after August 1, 2020, through weeks of unemployment ending before December 27, 2020
   contingent upon sufficient balances remaining in the DRF.

   Accordingly, in states where the week of unemployment ends on a Saturday, the first
   week that LWA may be paid is the week ending August 1, 2020. For states where the
   week of unemployment ends on a Sunday, the first week that LWA is payable is the week
   ending August 2, 2020.

   LWA is not payable for any week of unemployment ending after December 27, 2020.
   Accordingly, for states where the week of unemployment ends on a Saturday, the last
   week that LWA may be paid is the week ending December 26, 2020. For states where
   the week of unemployment ends on a Sunday, the last week that LWA is payable is the
   week ending December 27, 2020.

   However, the LWA program may terminate earlier if:

      FEMA expends the $44 billion from the DRF account designated by the President for
       the LWA program; or
      The balance of the DRF decreases to $25 billion; or
      Legislation is enacted that provides, due to the COVID-19 outbreak, supplemental
       federal unemployment compensation or similar compensation for unemployed or
       underemployed individuals.

   For additional information regarding termination of the program, refer to the FEMA
   website.

c. Financial Instructions.

   Benefit Costs. Upon a grant award by FEMA, states and territories may provide eligible
   claimants $400 per week, with a $300 federal contribution. LWA is funded using a 75
   percent federal cost share and 25 percent state match. For information regarding the
   federal cost share, refer to the FEMA website.

   If states wish to provide this maximum benefit to their claimants, they may pay an
   additional $100 per claimant per week using amounts allocated to them out of the CRF,
   provided under Title V of the CARES Act (Public Law 116-136), or other state funding
   to cover the 25 percent state match.

   States may meet the $100 per claimant per week state match with the payments they
   make for regular state UI benefits to claimants that also meet the requirement to be
   unemployed or partially unemployed as a result of COVID-19 if they choose to do so.
   This includes states in borrowing status pursuant to Title XII of the Social Security Act.
   In this case eligible claimants will only receive a LWA payment of $300 in addition to
   their weekly benefit amount.

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       If a state chooses to use another state funding source (e.g., CRF or general revenue)
       besides those currently supporting the state UI program to cover the 25 percent state
       match, eligible claimants will receive a total LWA payment of $400 in addition to their
       weekly benefit amount. The $400 consists of $300 from the federal cost share and $100
       from the state match. The Presidential Memo does not change any requirements for
       using a state’s unemployment account within the Unemployment Trust Fund.

       Administrative Costs. Administrative funding for the LWA program, including changes
       to existing UI systems to accommodate the program, is provided by FEMA. For
       information regarding the available federal administrative funds, refer to the FEMA
       website.

       Federal grants for administration of state UC law may not be used to pay for any part of
       the costs of administration of LWA. In addition, if any state staff or other assets (e.g.,
       information technology, office space, utilities) are normally paid for with UC
       administrative funding, including from the state’s UC state administrative grant or other
       sources of funding for UC administration (e.g., Reed Act funding) and are used to
       support the LWA program, then cost sharing agreements must be in place. LWA
       administrative funding must pay for the proportionate share of these resources used to
       support administration of LWA. Training and Employment Guidance Letter (TEGL) No.
       06-02 provides additional information regarding indirect cost rates and cost allocation
       plans.

5. Inquiries. States should direct inquiries regarding LWA to
   [email protected]. States may direct inquiries regarding the intersection
   of LWA with unemployment benefit programs to [email protected].

6. References.

      Coronavirus Aid, Relief, and Economic Security (CARES) Act (Pub. L. 116-136),
       including Division A, Title II, Subtitle A—Relief for Workers Affected by Coronavirus
       Act and Title V—Coronavirus Relief Funds (CRF);
      Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5121 et
       seq.);
      Presidential Memorandum, Authorizing the Other Needs Assistance Program for Major
       Disaster Declarations Related to Coronavirus Disease 2019, issued August 8, 2020;
      UIPL No. 15-20, Change 1, Coronavirus Aid, Relief, and Economic Security (CARES)
       Act of 2020 – Federal Pandemic Unemployment Compensation (FPUC) Program
       Reporting Instructions and Questions and Answers, issued May 9, 2020,
       https://wdr.doleta.gov/directives/corr_doc.cfm?DOCN=3946;
      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 April 4, 2020,
       https://wdr.doleta.gov/directives/corr_doc.cfm?DOCN=9297;
      TEGL No. 06-02, Guidance on the Recovery of Indirect Costs, issued August 21, 2002,
       https://wdr.doleta.gov/directives/corr_doc.cfm?DOCN=1416;

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   Grants.gov Application at https://www.grants.gov/web/grants/view-
    opportunity.html?oppId=328611; and
   FEMA Website at https://www.fema.gov/disasters/coronavirus/supplementa l-payments-
    lost-wages.

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