Pandemic (PUA) claims are being denied for invalid reasons

Pandemic Unemployment Assistance (PUA) benefits are the creation of the CARES Act and completely federally funded. Their purpose is to get unemployment benefits to groups of workers who are not eligible for regular unemployment for various reasons.

Note: for an explanation of all the different kinds of unemployment benefits connected to this pandemic, see this lengthy table.

Numerous attorneys and claimants are reporting that the Department is denying most PUA benefit claims. And, the claims-filing data backs up that observation.

ST  Initial Appl'ns  First Paym'ts    % Paid
WI      112,114        35,889         32.01%
NC      332,287       211,528         63.66%
MN      110,781        98,217         88.66%
FL      329,289       292,779         88.91%
IL      351,628       155,822         44.31%
MA      755,979       580,111         76.74%
NJ      657,341       490,282         74.59%

Source: TCF unemployment data explorer covering PUA claims filed April through September. Note, the Florida and Illinois PUA claims data is missing for August and September 2020.

As this data indicates, only one-third of PUA claims in Wisconsin are leading to an actual payment of PUA benefits. Other states are not only processing many more claims than Wisconsin, but they are also paying more of those claims. Massachusetts, a state generally recognized as doing well with PUA claims, has paid nearly 77% of 756,000 PUA claims filed in that state. New Jersey, a state saddled with an older mainframe system based on COBOL like Wisconsin, has paid nearly 75% of the 657,000 PUA claims filed in that state. Even in Illinois PUA claims fare better than in Wisconsin, as more than 44% of them have been paid.

To understand what is going on in Wisconsin, here are four examples of PUA claimants.

Example 1: Claimant does not qualify for regular unemployment because of insufficient benefit year earnings. But, job hours are reduced because of the pandemic, and he applies for PUA benefits because of those reduced hours.

Example 2: Claimant receives SSDI benefits and so is not eligible for regular unemployment. In early March 2020 (before any shutdown order), she quits her job because of egregious sexual harassment from employer and applies for PUA benefits. Normally, quitting a job because of sexual harassment qualifies a claimant for regular unemployment benefits, but she is ineligible for those because she receives SSDI benefits.

Example 3: Claimant has been working part-time for several years despite receiving SSDI benefits because of emotional disabilities. But, those emotional disabilities become worse and prevent regular work for most of 2019. Thanks to effective treatment and management, he begins looking for work again just before the pandemic strikes. Because of the pandemic, however, he cannot find work and applies for PUA benefits.

Example 4: Claimant who receives SSDI benefits approved for PUA benefits after a pandemic-related layoff from her employer. Later, when she returns to work and accrues two consecutive weeks of work, the Department declares her PUA claim is over, even though she is still working a reduced schedule because of the pandemic.

In two of these four examples, Wisconsin is denying the PUA claim for illegitimate reasons.

Example 1: loss of some work because of the pandemic

This claimant filed an application for PUA benefits because, he explained:

Job has experienced a decline in available hours because of the pandemic. I do not qualify for regular UI because my benefit year earnings are insufficient to establish a benefit year. Reduction in available hours has dropped from on average 30 per week to on average 12 per week.

Three months later, the Department approved this PUA claim in a determination dated July 24th. No PUA benefits were paid, however, because the Department indicated on his “portal” that his eligibility was being investigated because of a quit in 2019. Then, in a determination dated October 28th, his PUA claim was now denied because the claimant’s place of employment was NOT closed as a direct result of the Covid-19 public health emergency.

Note: This example of the portal NOT indicating what is going on with his claim is additional proof for why the claimant portal in Wisconsin is essentially useless to claimants in describing what actually is going on with their claim. To claimants, getting access to decision documents and benefit payment history is about the only useful features available to them on the on-line portal.

Obviously, what is going on here is that the Department is now re-investigating PUA claims to determine if those claims can subsequently be denied (as noted previously, the Department has a policy of re-investigating approved claims). Given how slow the Department has been to pay out claims, this re-investigation is leading to denials of the same claim before any unemployment benefits are ever paid out.

The other issue is why Wisconsin is even denying PUA benefits at all. Here is what Wisconsin now posts on its website FAQ for PUA benefits.

The federal CARES Act provision at issue is the list of specific pandemic-related job-loss reasons in Section 2102(a)(3)(A)(ii)(I)(aa)-(kk) of the CARES Act. Business closure is listed under sub-section (jj):

the individual’s place of employment is closed as a direct result of the COVID–19 public health emergency[.]

The initial determination denying eligibility, however, does NOT include sub-section (kk) as one of the applicable reasons for which PUA benefits could be approved (it stops at the business closure provision). Noticeably, this sub-section states:

the individual meets any additional criteria established by the Secretary for unemployment assistance under this section

That additional criteria is what has emerged in Unemployment Insurance Program Letters for PUA benefits, UIPL No. 16-20 (5 April 2020), UIPL No. 16-20 Change 1 (27 April 2020), UIPL No. 16-20 Change 2 (21 July 2020), and UIPL No. 16-20 Change 3 (27 August 2020).

The CARES Act and the relevant program letters explicitly provide that PUA benefits are available to those who certify being “unemployed, partially unemployed, or unable or unavailable to work” because of the pandemic. Section 2102(a)(3)(A)(ii)(I) (emphasis provided). So, partial unemployment is explicitly provided for in this statute.

In regards to this claimant’s specific circumstances — insufficient benefit year earnings — UIPL 16-20 Change 1 at I-6 provides (emphasis supplied):

21. Question: When an individual has insufficient wages (or no wages) during the PUA base period, how is the PUA WBA calculated?

Answer: If an individual has insufficient wages (or no wages) from employment or insufficient net income (or no net income) from self-employment in the applicable PUA base period to compute a WBA, the individual is entitled to the minimum PUA WBA.

Even with no wages in the base period, the individual must meet the requirements under section 2102(a)(3)(A)(ii)(I) of the CARES Act — he or she must be unemployed, partially unemployed, or unable or unavailable to work because of one of the COVID-19 related reasons. The individual must have an attachment to the labor market and must have experienced a loss of wages and hours or was unable to start employment following a bona fide job offer.

This broad language led states like Massachusetts to include specific PUA eligibility for those who had their hours reduced as a result of COVID-19.

Q. My hours have been reduced. Can I collect benefits under PUA?

A. If you are working fewer hours due to COVID-19 and it has resulted in a loss in income, and you are not eligible for regular unemployment benefits, you may be eligible for PUA.

Mass. Pandemic Unemployment Assistance Benefits at 6.

Finally, the Department also seems to be ignoring Disaster Unemployment Assistance (DUA) regulations (an irony, given how the Department originally asserted that DUA regulations allowed the state to deny PUA benefits to SSDI recipients). Section 2102(f) of the CARES Act specifically states:

RELATIONSHIP BETWEEN PANDEMIC UNEMPLOYMENT ASSISTANCE AND DISASTER UNEMPLOYMENT ASSISTANCE. — Except as otherwise provided in this section or to the extent there is a conflict between this section and section 625 of title 20, Code of Federal Regulations, such section 625 shall apply to this section as if —

(1) the term “COVID–19 public health emergency” were substituted for the term “major disaster” each place it appears in such section 625; and

(2) the term “pandemic” were substituted for the term “disaster” each place it appears in such section 625.

And, DUA regulations define a week of unemployment to include:

any week during which the individual is totally, part-totally, or partially unemployed. . . . A week of partial unemployment is a week during which the individual works less than regular, full-time hours for the individual’s regular employer, as a direct result of the major disaster, and earns wages not exceeding the maximum earnings allowance prescribed by the applicable State law.

20 CFR 625.2(w)(1).

Finally, Wisconsin is applying a conception of business closure that changes with the circumstances. Schools that go virtual are considered closed even though they are still teaching the same number of students. But, businesses like restaurants that partially close so that only outdoor dining was offered or which only provide take-out only offerings are not considered closed at all. If the PUA benefits are supposed to be available under explicit statutory language regarding partial unemployment, then partial closures that led to partial unemployment under sub-section (jj) allows for PUA benefits.

So, in this question of federal law — not state unemployment law — Wisconsin is NOT following that federal law. Where other states are approving PUA benefits, Wisconsin is denying PUA eligibility despite what federal law requires.

The claimant in this example, according to federal law, is eligible for PUA benefits because he has experienced a partial loss of work directly connected to the pandemic, as spelled out in UIPL 16-20 Change 1, DUA regulations that control where there is a conflict between the CARES Act and DUA regulations, and a pandemic-related business closure that has reduced his hours of work.

Update (11 Jan. 2021): UIPL No. 16-20 Change 4 (8 Jan. 2021) has the following information regarding the business shutdown issue:

If a business has multiple parts and one or some of those parts is shut down due to restrictions imposed by COVID-19, affected staff from the parts of the business that shut down may be eligible for PUA. For example, a business may include both a restaurant and a brewery. If the individual’s place of employment is the restaurant and the restaurant is shut down because of the COVID-19 pandemic, even if the brewery continues to operate, the individual who was employed in the restaurant may be eligible for PUA. An individual who is working reduced hours while his or her place of employment continues to operate does not satisfy the conditions to self-certify under item (jj).

UIPL No. 16-20 Change 4 at I-8 (emphasis supplied). So, the worker here in Example 1 who is working reduced hours is now NOT eligible for PUA benefits.

Example 2: non-pandemic loss of work

This claimant quit a job for non-pandemic related reasons that would normally constitute good cause for receiving regular unemployment benefits. But, because she also receives SSDI benefits she is at this moment NOT eligible for regular unemployment benefits. So, until the discriminatory ban on regular unemployment benefits is overturned, PUA benefits may be her only option.

UIPL No. 16-20 Change 2 (21 July 2020) at I-5 for Q12 addresses the situation of an employee quitting a job and possibly being eligible for PUA benefits.

Stated another way, if the individual is disqualified from regular UC because of the prior separation issue, but is currently unable or unavailable to work for one of the listed COVID-19 related reasons in Section 2102(a)(3)(A)(ii)(I) of the CARES Act, then the individual may be eligible for PUA.

But, because this claimant is ineligible for regular unemployment benefits not because she quit but because she receives SSDI benefits, this UIPL guidance does NOT apply to her. Rather, she is one of the classes of employees who are eligible for PUA benefits because they are ineligible for regular unemployment benefits, like Americorps volunteers or church employees.

UIPL No. 16-20 Change 1 specifically provides that full-time students who lose part-time work related to the pandemic ARE eligible for PUA benefits. Q28 at I-7. So too are Peace Corps and Americorps volunteers eligible for PUA benefits if they are “no longer volunteering because their volunteer sites are closed due to COVID-19.” Q29 at I-8.

As a result, she needs to show that she has a loss of work connected to the pandemic. Unfortunately, since she quit her job because of sexual harassment and not the pandemic, she is NOT eligible for PUA benefits. Her loss of work is NOT related to the pandemic, and so she cannot qualify for PUA benefits despite it being her only option at the moment.

Example 3: cannot find work

Here, the claimant has returned to the labor market just when the pandemic started. Unfortunately, that lack of work along with a lack of pandemic-related job loss means he is NOT eligible for PUA benefits.

14. Question: If an individual becomes unemployed for reasons unrelated to COVID-19, and now is unable to find work because businesses have closed or are not hiring due to COVID-19, is he or she eligible for PUA?

Answer: No. An individual is only eligible for PUA if the individual is otherwise able to work and available to work but is unemployed, partially unemployed, or unable or unavailable for work for a listed COVID-19 related reason under Section 2102(a)(3)(A)(ii)(I) of the CARES Act. Not being able to find a job because some businesses have closed and/or may not be hiring due to COVID-19 is not an identified reason.

UIPL No. 16-20 Change 2 at I-6.

Moreover, Pennsylvania provides the following guidance on this very issue:

Q. I have never worked before. Am I eligible for PUA?
A. You may be eligible for PUA even if you have never worked before and

- you were scheduled to commence employment and do not have a job or are unable to reach the job as a direct result of the COVID-19 public health emergency; OR

- your job offer was rescinded because of COVID-19; OR

- you have become the breadwinner or major supporter for a household because the head of the household has died as a direct result of COVID-19.

Simply entering the workforce and having trouble finding work is NOT enough to qualify for PUA benefits. There still needs to be some pandemic-related reason for why the claimant has a loss of work in some way.

Note: As an independent contractor, however, he could be eligible for PUA benefits. As explained in UIPL No. 16-20 Change 1 for Q42 at I-11, “an independent contractor who experiences a significant diminution of work as a result of COVID-19” may be eligible for PUA benefits.

Example 4: a partial return to work

This claimant is the converse of what happened in the first example. After a complete layoff and several weeks of no work, the claimant is haltingly returned to work. Once two weeks of consecutive work occur, however (the weeks ending 7/4/2020 and 7/11/2020), the Department concludes that the claimant’s PUA claim is over and all payments after those weeks are held up, even through the claimant continues to experience numerous weeks of reduced work. This benefit payment history details that work history.

The initial determination denying PUA eligibility for this claimant has the exact same wording as the denial for the claimant in the first example.

The fundamental problem here, as discussed above, is that PUA benefits are explicitly available for a partial loss of work and there is no statutory provision or advisory letter setting forth a timeline for returning to work and cutting off PUA benefits. The Department appears to be making up a two weeks of work criteria for disqualifying someone.

UIPL 16-20 Change 1 at I-11 specifically states that eligibility is a weekly issue:

44. Question: Is PUA eligibility determined on a weekly basis like DUA?

Answer: Yes.

See also:

17. Question: Under DUA, an individual is no longer eligible for benefits when the conditions caused by the disaster no longer exist. When does an individual’s eligibility for PUA end?

Answer: To be eligible for benefits, the individual must meet the requirements to be a covered individual under section 2102(a)(3)(A) of the CARES Act, including that the person must be unemployed, partially unemployed, or unable or unavailable to work because of a listed COVID-19 related reason in Section 2102(a)(3)(A)(ii)(I) of the CARES Act. As discussed in Question 45 of Attachment I to UIPL No. 16-20, Change 1, eligibility is determined on a weekly basis and the individual must certify for an identified COVID-19 related reason each week to receive payment. The individual ceases to be eligible when he or she no longer meets the requirements to be a covered individual in a given week.

UIPL 16-20 Change 2 at I-8.

There simply is no reason for why the Department is cutting off PUA eligibility because of a partial return to work.

Final thoughts

Out of four examples here, the Department is violating federal law regarding PUA benefits in two of these examples.

The second example, while within what federal law allows, also demonstrates how morally and legally bankrupt the ban on regular unemployment for SSDI recipients is. Here, a woman victimized by sexual harassment cannot collect regular unemployment benefits because Wisconsin is denying those benefits based on her disability. She is essentially being victimized twice, once by her employer and again by Wisconsin.

Wisconsin should be doing better.

Update (11 Jan. 2021): As noted above, a new program letter indicates that the claimant in Example 1 is now NOT eligible for PUA benefits.