Calif., NY Get FEMA Funds To Add To Unemployment Benefits

By Danielle Nichole Smith
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Law360 (August 24, 2020, 7:32 PM EDT) -- The Federal Emergency Management Agency has approved grants for California and New York under the Lost Wages Assistance program that will allow the states to provide an extra $300 a week to workers who are jobless because of COVID-19.

The California Employment Development Department said Saturday that FEMA will give the Golden State an initial $4.5 billion under the program, which was authorized by President Donald Trump in an executive order on Aug. 8. 

California workers will qualify for the additional benefit if they are currently eligible for at least $100 in unemployment benefits per week and their unemployment stems from the coronavirus pandemic, according to the department's release.

"Since the beginning of this pandemic, we have sought to maximize federally funded unemployment benefits to Californians," California Labor Secretary Julie A. Su said in a statement. "These benefits are critical for the basic security of families and communities and for our economy, which have been so devastated by the virus and its financial impacts."

New York's request for a grant under the Lost Wages Assistance program was also approved, according to a FEMA release Sunday, though the statement didn't specify the dollar amount. FEMA said the agency will "work with New York Gov. Andrew M. Cuomo to implement a system to make this funding available to New York residents."

"We are diligently working to update our systems so we can administer the Lost Wages Assistance program and deliver supplemental benefits to New Yorkers as quickly as possible," Deanna Cohen, a spokesperson for the New York Department of Labor, told Law360 in a statement Monday.

Trump's executive order on Aug. 8 authorized an extension of the Coronavirus Aid, Relief and Economic Security Act's expired $600-a-week unemployment benefits at a reduced rate of $400, with FEMA on the hook for $300 and the states responsible for the rest. The order made up to $44 billion from FEMA's Disaster Relief Fund available for the program, according to the agency. 

Although a supplemental federal jobless aid plan from Congress could void the benefits, an email Law360 obtained on Aug. 10 showed that the U.S. Department of Labor has laid out guidelines for how states could foot the bill in the meantime.

In one option, states could count the existing unemployment benefits they pay weekly toward their $100 tab under Trump's new plan, meaning those out of work would only receive $300 a week under the executive order.

This strategy would require "no new expenditures of state funds," according to John Pallasch, the assistant secretary for the DOL's Employment and Training Administration, who signed the email.

States could also pay their share from budgets outside their traditional unemployment insurance coffers, including from federal coronavirus relief funds already distributed to states earlier in the crisis, according to the email.

The Labor Department recommended that states meet their cost-sharing requirement, allotting the full $400 a week to those out of work due to the global health crisis, but said they're not required to do so.

California Gov. Gavin Newsom and Cuomo were critical of the initiative on Twitter when it was announced, with Cuomo calling it a "nonstarter" that states "can't afford," and Newsom describing the effort as "absurd" and "false promises." 

--Additional reporting by Anne Cullen. Editing by Haylee Pearl.

For a reprint of this article, please contact reprints@law360.com.

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