Unemployment Insurance Update, Construction Law, State and Federal Taxes

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In our effort to continue to provide MBI members with the most up to date information on issues pertaining to COVID-19 in the construction industry, we have updated our MBI Blog.

Last week, MBI compiled a list of guidance and informational websites for your team to review. This site will serve as our main communication link throughout the COVID-19 crisis and will include all new information going forward.

Since our post last week, the AGC of America has offered additional information on their site. Again, it is recommended that you reference this site often as it is being continuously updated.https://www.agc.org/coronavirus-covid-19
Unemployment Insurance Questions

Yesterday, Gov. Kim Reynolds announced assistance for employees AND employers affected by COVID-19 related layoffs. From the Governor’s office release:

Unemployment Insurance Questions:

Unemployment Insurance Benefits COVID-19 Scenario Chart  (Source: Iowa Workforce Development)

In addition, IWD has provided an unemployment webinar for employers that can be view here.

Construction Law Bulletin from BrownWinick Law Firm:

Contact Information
Brian Rickert, Construction Practice Group Chair
BrownWinick Law Firm
515.242.2457
brian.rickert@brownwinick.com

Employer Guidance Regarding COVID-19 Impact on Unemployment Benefits in Iowa

Q. Do employees need to exhaust all vacation, sick leave, or personal time off (PTO) time prior to claiming unemployment benefits?
A. Yes. If an employer offers vacation, sick leave, or PTO time to employees, the employees must exhaust those benefits prior to claiming unemployment benefits.

Q. Are employers required to lay off employees in order for the employees to be eligible for unemployment benefits?
A. Under normal circumstances, only employees who have a reduction in hours or who are involuntarily laid off by their employer through no fault of their own would be eligible for unemployment benefits. In the case of employees who are filing unemployment claims as a result of COVID-19, however, Iowa Workforce Development is temporarily allowing a broader eligibility standard than normal. For example, employees who are unable to work for the following COVID-19-related reasons will be presumed eligible for unemployment benefits — such as employees who are out of work due to:

  • Caring for a family member;
  • Loss of childcare or school closures;
  • Employer shut down;
  • Need for the employee to self-quarantine;
  • Employee contracts COVID-19 and is unable to work.

Q. If an employee normally only works on a part-time basis, is the employee eligible for unemployment benefits?
A. Yes, provided that the employee satisfies the eligibility requirements for unemployment benefits. The relevant inquiry for determining eligibility is not “full-“ or “part-time” classification, nor based on hours worked — but rather on the employee’s weekly earnings and eligibility.

Q. What is the amount of unemployment benefits an employee will receive?
A. The amount of unemployment benefits an employee will receive is based on the employee’s wages and the number of dependents the employee claims. Weekly benefits can range from $87 to $591.

Q. How long does an employee remain eligible for unemployment benefits?
A. An employee who remains eligible may collect unemployment benefits up to 26 weeks.

Q. Are business owners eligible for unemployment benefits under the program?
A. Under normal circumstances, business owners are not be permitted to claim unemployment benefits because a closure of the business is treated as a voluntary closure. Given that the COVID-19 pandemic is outside of the control of employers, Iowa Workforce Development has indicated it intends to provide flexibility for such business owners to claim unemployment benefits.

Q. Do employees need to seek alternative work during the period of unemployment?
A. Under normal circumstances, employees receiving unemployment benefits must actively seek work with other employers. For employees who are unemployed for COVID-19 related reasons and have properly indicated this on their claim forms, however, Iowa Workforce Development has indicated it will waive the requirement to search for a new job at this time.

Q. How will an increase in employee claims affect my business?
A. Claims filed and identified as a direct or indirect result of COVID-19 will not be charged to employers. Employers will continue to be notified of claims, but fact-finding interviews will not be held.

Q. If a company chooses to lay off employees, does the company need to lay off all employees or can the company lay off only a portion of its workforce?
A. The choice of which employees to lay off is within the discretion of the employer. An employer can choose to lay off either some or all of its employees, but should be cautious to avoid making employment decisions based on protected classes (age, gender, perceived disability, etc.). For example, a company should not mandate only older employees be laid off simply because they may fall within an at-risk group for COVID-19.

Q. How do employees file for unemployment benefits?
A. To expedite their claims, employees should file as soon as they are laid off by going online to https://www.iowaworkforcedevelopment.gov/ and clicking on “Apply for Unemployment.”

Q. How will the legislation currently under consideration by Congress impact unemployment benefits?
A. Potential federal legislation remains pending, so its impact on Iowa law is not yet clear. If paid leave becomes available under federal law, it would need to be exhausted before an employee seeks unemployment benefits.

BrownWinick attorneys will continue to monitor developments and keep you posted as things evolve. In the meantime, please let me know if you have any questions.

IA Department of Revenue, U.S. Treasury Department & IRS Extend Deadline for Federal & State Income Tax Payments:

The Treasury Department and IRS announced that they have extended the due date for Federal income tax payments. The deadline has been extended from April 15, 2020 to July 15, 2020 and applies for payments due of up to $10 million for corporations and up to $1 million for individuals – regardless of filing status – and other unincorporated entities.

The Treasury Department and IRS have announced they are extending the filing deadline for Federal income taxes from April 15, 2020 to July 15, 2020.

The State of Iowa’s Department of Revenue announced today that they would be extending the deadline for filing and paying state income taxes, and others to July 31, 2020.

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