The employment group at Burch, Porter & Johnson has recently received a number of questions from clients—who are rightly concerned about the wellbeing of furloughed or laid-off employees during this uncertain time—about unemployment benefits in Tennessee, including questions about recent federal legislative efforts (most particularly the CARES Act) and their effect on benefits for Tennessee applicants.  We have provided answers to the most common questions below.

When will the additional $600 per week be available to my employees? 

The Tennessee Department of Labor and Workforce Development (the “Tennessee DOL”) has indicated that the first installment of the $600 federal benefit payment will be distributed in addition to the Tennessee state benefit beginning as of the date of this writing (week of April 13, 2020).  The Tennessee DOL has also noted that it will provide claimants retroactive pay of the $600 federal benefit to March 29 in upcoming benefit payments.

Will my company be charged for these additional unemployment benefits?

The federal benefits are fully funded by the federal government.  According to recent United States Department of Labor guidance, states (including Tennessee) are not permitted charge employers for any of the federal supplemental benefits.  The Tennessee DOL has confirmed that funding for the federal benefits does not impact the Tennessee Unemployment Trust Fund.

Will my employees get any amount in addition to the $600 per week?

Currently, Tennessee’s maximum state-level benefit is $275 per week.  The $600 federal benefit is in addition to the Tennessee benefit and applies to all approved claimants receiving unemployment benefits.

Does the CARES Act extend the amount of time that my employees can collect unemployment benefits in Tennessee?

Yes. Under Tennessee law, individuals are eligible to collect unemployment benefits for a maximum of 26 weeks in any single benefit year, or the 52 weeks following the first day an employee files a valid claim for benefits.  The CARES Act will provide up to 13 weeks of additional benefits (through December 31, 2020) to individuals who have exhausted regular unemployment compensation under Tennessee state law.

Will I jeopardize my employees’ eligibility for unemployment benefits if I hire them back temporarily (for example, for the purposes of the Paycheck Protection Program) and then lay them off at a later date?

No.  Any employer-filed claim should designate the layoffs as a “temporary layoff with recall” with the Tennessee DOL.  Employees will be ineligible for unemployment compensation benefits for weeks they receive pay equal to or in excess of their weekly benefit amount.  They will become eligible for benefits again for weeks their pay is below their weekly benefit amount or eliminated. As explained below in relation to part-time work, their weekly benefit amount will be adjusted based on any earnings received below their weekly benefit amount, subject to the state’s “deductible allowance.”

Is an individual permitted to earn money through a part-time job while collecting unemployment benefits?

Generally, yes.  However, if the individual in his or her part-time job earns more money than the weekly benefit amount as determined by the Tennessee DOL, the individual will not qualify for unemployment benefits.  In Tennessee, an individual may earn a weekly “deductible allowance” up to the greater of $50 or 25% of their state weekly benefit amount without affecting their eligibility for full benefits.  For example, for an individual eligible for the maximum state weekly benefit amount of $275 per week, that person may earn up to $68.75 without reducing their benefits.  For earnings in excess of the deductible allowance, the individual’s weekly benefit amount will be adjusted dollar-for-dollar accordingly..

Does it make a difference for unemployment compensation purposes if I furlough or temporarily lay off an employee, as opposed to terminating him or her?

To some extent, yes.  Employees that are temporarily “furloughed” will be categorized as “temporary layoff with recall” and will not be required to look for alternative work.  This can be a benefit to employers that wish to recall those furloughed workers down the road.  Furloughed workers whose pay is cut or eliminated will be eligible for unemployment benefits if they are making less than their weekly benefit amount.

If I am a reimbursing employer (e.g., a government agency or a 501(c)(3) organization that has elected to reimburse the state dollar-for-dollar in lieu of premiums), will I be responsible for reimbursement of the federal benefits?

No. The CARES Act will provide a 50 percent reimbursement to the states on behalf of “reimbursing employers” for all state payments made between March 13, 2020 through December 31, 2020, even if the individual receiving benefits is unemployed for a reason other than the COVID-19 virus.  The United States Department of Labor has issued guidance providing that states may not charge employers for any federal benefits paid, and, therefore, reimbursing employers would be responsible for only 50% of the state (not federal) benefits paid between March 13, 2020 and December 31, 2020.

The emergency unemployment relief benefit for governmental entities and non-profit organizations is scheduled to be retroactive to March 13, 2020, but there could be delays in its implementation.

As employers continue to grapple with implementing the Emergency Family Medical Leave Expansion Act and the Emergency Paid Sick Leave Act provisions of the Families First Coronavirus Response Act (“FFCRA”), the Department of Labor continues to try and provide compliance assistance. In its recently updated “Questions and Answers” document (the “DOL Q&A”), the DOL provides guidance on several difficult questions facing employers and makes clear that the FFCRA will be enforced soon, so employers better get on top of it now. The following are some of the highlights from the recent additions to the DOL Q&A.

Enforcement Begins April 17 – While the DOL allowed for a good faith efforts compliance period from April 1 through April 17, the DOL advises that it will “fully enforce violations of the Act after April 17, 2020.”  The DOL Q&A notes, however, that once it begins fully enforcing the FFCRA, if employers have not remedied violations then retroactive enforcement back to April 1, 2020, will occur.

Paid Sick Leave Due to Shelter-in-Place or Stay-at-Home Orders – If a shelter-in-place or stay-at-home order is issued by a Federal, State or local government authority and that order prevents the employee from working or teleworking despite the fact that the employer has work that could be performed, then the employee is eligible for emergency paid sick leave.  If the employer does not have work for the employee to perform, however, then the employee may not take the paid sick leave as a result of the order.

Paid Sick Leave For Self-Quarantine – Employees are only eligible for paid sick leave if a health care provider advises the employee to self-quarantine.  Employees may not take paid sick leave if they “unilaterally decide to self-quarantine” without medical advice.

Paid Sick Leave When Caring for Someone Who is Subject to a Quarantine or Isolation Order – Employees are eligible for paid sick leave if they are caring for someone who is not able to care for himself or herself (as a result of the order) and depends on the employee for care and providing the care prevents the employee from working or teleworking.  The DOL Q&A states that the individual must “genuinely need” the employee’s care and must be someone that the employee has an existing relationship with, such as an immediate family member or someone who resides in the employee’s home.

Defining Place of Care and Child Care Provider – The DOL Q&A makes clear that the scope of these terms is broad.  “Place of care” includes physical locations solely dedicated to child care as well as places such as “schools, homes, summer camps, summer enrichment programs, and respite care programs.”  “Child care provider” is also expansive and includes “individuals paid to provide child care” like babysitters and “individuals who provide child care at no cost” such as grandparents.

School/Place of Care is Closed Even if it is Providing Online Instruction – Distance learning or online instruction, even if mandatory, does not mean school is open.  If the physical location where the child goes is closed, then the school/place of care is closed for purposes of the FFCRA.

Employees Receiving Workers’ Compensation or Temporary Disability Benefits –  These employees are not eligible for paid sick leave or expanded family medical leave unless the employee was able to return to light duty prior to taking the FFCRA leave.

Employees Who are Already on a Leave of Absence – If an employee is on a voluntary leave of absence, then the employee may end of the voluntary leave and apply for applicable FFCRA leave.  If the employee is on a mandatory leave of absence, however, then the employee may not take FFCRA leave.