Essential Information for Employers on Alabama’s Unemployment Benefits and COVID-19

The coronavirus pandemic has resulted in critical changes to workforces across the United States. In the state of Alabama, there have been more than 306,000 unemployment claims filed since March 16, 2020. The Alabama Department of Labor has taken steps to respond to the situation, including modifying certain unemployment compensation eligibility requirements to better address the fluid needs of employers and employees during the crisis. In addition, the federal government has implemented programs extending and adding protections for those workers not traditionally eligible for unemployment compensation under Alabama law. What follows are some key points for Alabama employers and employees seeking information on the latest developments regarding unemployment compensation in the state.

Alabama Unemployment Benefits

Alabama law governing the availability of unemployment insurance benefits provides a maximum weekly benefit amount of $275 for a total of 14 weeks as long as the average unemployment rate in Alabama is at 6.5 percent. With every .5 percent increase in Alabama’s average unemployment rate, the total number of benefits weeks increases by one additional week, up to 20 weeks. It is important to note that the .5 percent increase in the unemployment rate is based on the average rate in the third quarter of the year. A claimant can possibly receive an additional five weeks if engaged in training programs approved by the Alabama Department of Labor. These approved programs include GED training programs, any training provided through the Alabama Department of Labor’s Career Center System, or any associate’s, bachelor’s, master’s, or doctorate degree program.

Alabama unemployment compensation benefits are normally subject to a waiting period, basic eligibility requirements, and additional disqualification considerations. The “waiting week” requirement that requires a week before a claimant can file for benefits has been waived as a result of the COVID-19 pandemic. Additionally, claimants are not required to search for other jobs as long as they take steps to preserve their ability to return to work when the Alabama Stay at Home Order is lifted or the crisis subsides. Further, the Coronavirus Aid, Relief, and Economic Security (CARES) Act provides unemployment benefits for some workers who would traditionally be disqualified from coverage under Alabama unemployment compensation law.

The CARES Act and Alabama Unemployment Insurance

The CARES Act implemented programs that added to and extended the bounds of unemployment compensation. These programs included Pandemic Unemployment Assistance (PUA), the Federal Pandemic Unemployment Compensation (FPUC) program, and the Pandemic Emergency Unemployment Compensation (PEUC) program. All of these initiatives are fully funded by the federal government, which means that employers will not be charged for any benefits paid under the programs provided by the CARES Act.

• Pandemic Unemployment Assistance. The PUA program provides relief to workers who would otherwise not be eligible for unemployment insurance, including self-employed workers, church employees, independent contractors, and gig-economy workers who are unable to work as a direct result of the coronavirus. In addition, the program provides assistance for individuals who have exhausted their regular unemployment compensation. The PUA program will run through December 31, 2020. Alabama began processing these claims on April 13, 2020.
• Federal Pandemic Unemployment Compensation. The FPUC provides Alabama recipients of unemployment insurance or pandemic unemployment assistance with an additional $600 per week. This totals to a maximum of $875 per week in Alabama. Alabama began paying these benefits to eligible individuals on April 8, 2020.
• Pandemic Emergency Unemployment Compensation. The PEUC provides up to an additional 13 weeks of unemployment benefits to Alabamians through December 31, 2020. Alabama began processing these claims on April 20, 2020.

Employers Filing Partial Claims for Employees

The Alabama Department of Labor issued a press release stating that all charges will be waived against “employers who file partial unemployment compensation claims on behalf of their employee.” The Alabama Department of Labor is “encouraging all employers who can file on their employees’ behalf to do so” and has stressed that the employer’s “experience ratings will not be affected by COVID-19 related claims.”

“Employers with five or more employees can electronically file a partial claim for their workers for a maximum of three consecutive weeks during which the employee has no earnings,” but during which the employer wishes to retain them. In order for employers in Alabama to file partial claims on behalf of their employees in bulk, they need to do the following:

• Complete and submit a printed Employer Affidavit for Electronic Partials (and acknowledge and accept an electronic Employer Affidavit for Electronic Partials).
• Have an unemployment compensation account number and the coinciding federal ID number.
• Complete the Partial Bulk Filing Spreadsheet. (There are additional requirements for the spreadsheet including saving the document as Text Tab Delimited and saving the file name as the contact name and phone number, e.g., “JaneDoe_3341234567.”)
• Select either to submit an upload or key individual claims to the CPUB application, but not both.

The Alabama Department of Labor will not accept incomplete files, so the employer must make necessary corrections to resubmit in those situations. In order for a partial claim to be complete, an employee must input his or her payment method during the first week in which the employee does not work.

The Alabama Department of Labor “no longer issues paper unemployment compensation checks” or “default payments to the Alabama Vantage Prepaid Benefits Card.” Employees are responsible for choosing a payment method and for any payment method updates using the automated phone system at 800–499–2035.

The employee can choose the Alabama Vantage Prepaid Benefits Card or direct deposit to a checking or savings account. Employers should stress to their employees the importance of submitting their payment information and consider sending them this handout explaining the process and consequences for failure to submit the payment method. A partial claims with no payment method selected by the employee will result in an incomplete claim and will not be processed.

Employers Unable to File for Employees

Employers are not always able to conduct partial claims on behalf of their employees. “Employers may not file partial claims when:

• employees are receiving a retirement pension from an employer they worked for within the past 18 months;
• employees are attending school;
• employees have an active claim filed in another state (if not using the CPUB version);
• employees are receiving Workers’ Compensation payments;
• employees are not able and available for work each day during the week being claimed when work is available four or more hours.”

“For employers who are unable to file partial claims on their employee’s behalf, the Alabama Department of Labor recommends that the employer notify the agency that they waive their right to respond to any Request for Separation information.” The Request for Separation form (which is also known as the BEN 241) will still be mailed to employers, but if they notify the Alabama Department of Labor in writing that they waive this right, they will not have to respond. Written statements notifying the agency can be sent by email or fax and should be on company letterhead and include the state unemployment insurance account number.

Employers that take the initiative to file on behalf of their employees or waive the right to respond to the Request for Separation play a critical role in helping expedite the processing of their employees’ unemployment compensation claims.

Key Takeaways

There have been several developments regarding unemployment compensation in connection with the COVID-19 crisis. The Alabama Department of Labor has allowed for temporary flexibility regarding certain unemployment compensation requirements and provided helpful tools for tracking unemployment claims. The federal government has provided additional coverage by way of the CARES Act.

Ogletree Deakins will continue to monitor and report on developments with respect to the COVID-19 pandemic and will post updates in the firm’s Coronavirus (COVID-19) Resource Center as additional information becomes available. Critical information for employers is also available via the firm’s webinar programs.