Unemployment Eligibility Expanded Under CARES Act

The federal government has passed the ‘third phase’ of emergency legislation, called the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), in response to the present outbreak of coronavirus/COVID-19. 

You can read the law in its entirety here, but we’re providing general guidance and answering common questions about the sections of the law that are especially important to your business and employees below.  

This post will provide what you need to know about the expansion of unemployment benefit accessibility under the CARES Act. 

The federal unemployment expansion does two main things:

  1. Expands who can be eligible to receive unemployment benefits through the end of 2020; and 
  2. Provides an additional $600 per week in unemployment payments through July 31, 2020.


Expanded Unemployment Benefits under the CARES Act are not guaranteed and may differ based on your state.

We are aware that some states are denying claims that could now be approved under the CARES Act. It is likely due in part to the fact that unemployment claims have exploded over the past couple of weeks and the states are overwhelmed.

Another reason for this is that while the CARES Act permits significant flexibility for states to amend their laws to provide expanded unemployment insurance benefits in multiple scenarios related to COVID-19, it does not require it. And it looks like some states have not yet chosen to amend their laws, even though they will be fully reimbursed by the federal government for all unemployment payments made under the CARES Act expansion.

As a result, some of these states are continuing to enforce their “old,” and very limited, state-specific unemployment rules, rather than the new, expanded rules under the CARES Act. If you have an employee whose claim has been wrongly denied, encourage them to appeal. Also, you may want to call your governor to complain that your state is not providing the full benefits possible to employees who have lost their jobs (partially or in full) due to no fault of their own as a result of the virus.

Keep in mind, we will likely see more states expanding their unemployment benefits in the coming weeks as they have time to adjust.


Everyone and their mother is now eligible for unemployment benefits.

The federal government has greatly expanded unemployment benefits eligibility. Employees who normally are not eligible for unemployment benefits under state/federal law, now are.  So, any employees who were previously denied unemployment, should likely re-apply.  

This expansion will be in effect until the end of the year, but employees can only receive a maximum of 39 weeks of unemployment benefits. 

Individuals who are self-employed, seeking part-time employment, do not have sufficient work history, or otherwise would not qualify for UI under state/federal law, are now eligible for partial or full unemployment if they meet one or more of the following criteria: 

  • the individual has been diagnosed with COVID–19 or is experiencing symptoms of COVID–19 and seeking a medical diagnosis; 
  • a member of the individual’s household has been diagnosed with COVID–19; 
  • the individual is providing care for a family member or a member of the individual’s household who has been diagnosed with COVID–19;
  • a child or other person in the household for which the individual has primary caregiving responsibility is unable to attend school or another facility that is closed as a direct result of the COVID-19 public health emergency and such school or facility care is required for the individual to work; 
  • the individual is unable to reach the place of employment because of a quarantine imposed as a direct result of the COVID 19 public health emergency; 
  • the individual is unable to reach the place of employment because the individual has been advised by a health care provider to self-quarantine due to concerns related to COVID–19; 
  • the individual was scheduled to commence employment and does not have a job or is unable to reach the job as a direct result of the COVID-19 public health emergency; 
  • the individual has become the breadwinner or major support for a household because the head of the household has died as a direct result of COVID–19; 
  • the individual has to quit his or her job as a direct result of COVID–19; 
  • the individual’s place of employment is closed as a direct result of the COVID–19 public health emergency; or 
  • the individual meets any additional criteria established by the Secretary for unemployment assistance under this section.


  • Employees who are able to continue working their normal schedule remotely are not eligible for unemployment benefits. 
  • Employees who are receiving any paid leave benefits are not eligible for unemployment benefits.


Related Reading: CARES Act: SBA Loans and the Paycheck Protection Program


Business owner eligibility is unclear.

While the expansion says it applies to the self-employed, it’s not clear if the government is intending to include all business owners or only independent contractors and single person businesses. We’ll be updating as we learn more.

Eligibility may depend on how you are paid as a business owner, such as if you receive a W-2 salary that has taxes taken out. For now, you may want to speak with your CPA or other financial planner about whether they think you would qualify for benefits or if there’s an alternative financial plan that would be more beneficial.


All employees who qualify for unemployment benefits will receive an additional $600 per week for the next few months.

Our understanding of the law is that all employees who qualify for unemployment under state or federal benefits will be eligible for an additional $600 per week under the CARES Act.  This is true, even if: 

  1. The employee is only receiving partial unemployment benefits because they are working reduced hours. 
  2. The additional $600 takes the employee above what they usually make per week when they are working. 

This additional $600 will only be available until July 31, 2020.  


All unemployment claims should be filed in your state.

Even though the federal government is expanding unemployment benefits through the CARES Act, employees should continue to apply for benefits on the state level.  There is not a separate federal unemployment benefits claims process. The federal government is distributing funding to states to then distribute to eligible individuals. At this time, we do not have information about how soon those payment increases will start to be distributed. Also keep in mind that the process varies in each state. 


Employees will not be able to refuse to come back to work because they would prefer to receive unemployment benefits.

Don’t worry!  Once you are ready to reopen your company and you offer the employee their full hours again, they will no longer be able to receive unemployment benefits.  So, you don’t need to worry about how you will get your employees to come back to work if they are being paid more not to work. 

Related Reading: Families First Coronavirus Response Act Guidance and FAQ


The federal government is offering to reimburse states that set up “work share” programs.

Work share programs encourage employers to provide employees with reduced hours instead of completely furloughing/laying them off. They are state programs that allow employees with a reduction in hours to apply for partial unemployment.  

Some states already have a work share program set up, and, as a result, they were able to provide immediate help to employees with reduced hours during this crisis.  To help support these existing programs, the federal government will be providing grants to these states to cover 100% of payments made to employees.  

To encourage more states to set up these programs, the federal government will be reimbursing 50% of the costs incurred by states that set up new work share programs.

Keep in mind, even in the states that don’t take advantage of this funding to set up a work share program, employees will still be eligible for partial unemployment through the end of the year under the CARES Act.    


The federal government is encouraging states to waive the one-week waiting period for unemployment benefits.

Typically, there is a one week waiting period for any employee seeking unemployment benefits. States that waive this waiting period will be fully reimbursed by the federal government for all unemployment benefits paid during the first week of eligibility.  


Employees should not wait in line to apply for benefits.

Obviously, the last thing you want is for your employees to have to congregate with others in order to receive benefits; but, unfortunately, many states do not have an online application. For this reason, the CARES Act requires states to set up applications for unemployment compensation, and assistance with the application process, by phone or online.

Related Reading:

Practical Guidance for Employers Handling the Coronavirus Outbreak

CARES Act: SBA Loans and the Paycheck Protection Program

Families First Coronavirus Response Act Guidance and FAQ

Remote Work Checklist for Employers

This post was updated on April 7, 2020. It was originally published on March 31, 2020.
Comments have been temporarily disabled, as we are focusing on responding to questions from our existing CEDR HR Solution Center members. If you would like to learn more about becoming a Solution Center member to gain access to our team of HR professionals, please email us at info@cedrsolutions.com

Apr 7, 2020

Friendly Disclaimer: This information is general in nature and is not intended to provide legal advice or replace individual guidance about a specific issue with an attorney or HR expert. The information on this page is general human resources guidance based on applicable local, state and/or federal U.S. employment law that is believed to be current as of the date of publication. Note that CEDR is not a law firm, and as the law is always changing, you should consult with a qualified attorney or HR expert who is familiar with all of the facts of your situation before making a decision about any human resources or employment law matter.

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