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CARES Act unemployment insurance updates related to COVID-19

Updated: June 28, 2023

By: Erin Ellison

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As the COVID-19 outbreak spreads, unemployment claims have been rising dramatically. The recently-passed Coronavirus Aid, Relief, and Economic Security (CARES) Act seeks to offer federal unemployment insurance benefits for workers whose jobs have been impacted by COVID-19.


These updates increase the amount of the benefit and extend unemployment coverage to include workers who were not previously eligible at the state level.

Increased unemployment benefits

The CARES Act will supplement unemployed workers’ weekly benefit amount by $600. This is intended to cover workers who are already receiving state benefits, employees who aren’t typically eligible for their state unemployment insurance program, or those individuals who have already exhausted their benefits.

Need unemployment resources for your employees?

Here are some helpful resources for employers. Our employer’s guide to unemployment benefits explains how benefits, eligibility, and funding work. This state-by-state unemployment benefits guide will let you identify everything you need to share with your employees in the event of a layoff.

CARES Act unemployment eligibility

These changes allow individuals who are now unemployed, partly unemployed, or who cannot work for reasons related to COVID-19 to be more likely to receive benefits. But, workers who can work from home or people receiving paid sick leave or paid family leave are not covered.


If workers were part-time or were freelancers, independent contractors, self-employed, or gig workers, they may also be eligible for benefits. Employees who had to quit their job for reasons related to COVID-19 could also now qualify for unemployment benefits.


The CARES Act also essentially waives work history requirements and allows workers who recently started a new job — or even hadn’t reported for their first day — to still receive unemployment benefits for job loss due to COVID-19.


Some states require a one-week waiting period before unemployed workers start collecting benefits. States have been incentivized to waive this qualifying time period (see below), but because of the volume of applications, the waiting time for benefits to begin is currently unclear.


The federal government will fully reimburse states for the first seven days of benefits if they waive their one-week waiting period for benefits. The federal government will also extend the current state unemployment compensation eligibility period by 13 weeks. Several states already provide 26 weeks of unemployment insurance, so that means some workers may get up to 39 weeks of benefits under the CARES Act.


More questions

We strongly recommend talking to a legal or accounting professional if you have any questions about unemployment eligibility for yourself or your employees. As additional information is released regarding the federal government’s response to the COVID-19 outbreak, we will update this article, our overview of the CARES Act for small businesses, and our COVID-19 Resource Center.

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Erin Ellison is the former Content Marketing Manager for OnPay. She has more than 15 years of writing experience, is a former small business owner, and has managed payroll, scheduling, and HR for more than 75 employees. She lives and works in Atlanta.