As employers in the Commonwealth contemplate furloughs, temporary layoffs, or other forms of reductions in force amid the ongoing economic crisis caused by the COVID-19 pandemic, many H-1B workers scramble to figure out whether the state or federal government has provided temporary relief for this class of workers. On a per capita basis, Massachusetts has the third-most H-1B workers in the nation, behind New Jersey and California.
Fortunately, it appears that recently enacted emergency regulations do provide a path to unemployment benefits for some H-1B workers in Massachusetts.
Regulatory background for H-1B workers and the unemployment system
The federal unemployment program
The U.S. unemployment system is unique among social safety net programs. Broad requirements are outlined by the federal government, but implementation, taxation, and benefit determinations are carried out by the states. Federal law requires that unemployment benefits be made available only to workers who are “able to work, available to work, and actively seeking work.” Under a regulation issued by the U.S. Department of Labor, a state may (but is not required to) consider workers on temporary layoffs and who are “available to work only for” their current employers as “available.” The regulation also imposes an additional requirement for workers with “alien status”: non-citizens cannot meet the availability requirement unless they are “legally authorized to work that week [the week for which they seek benefits] in the United States by the appropriate agency of the United States government.”
The Massachusetts unemployment system and H-1B workers
In keeping with federal guidelines, Massachusetts provides unemployment benefits only to workers who are “capable of, available [for], and actively seeking work in [their] usual occupation or any other occupation for which [they] [are] reasonably fitted.” For H-1B workers, this requirement is normally an impediment. Because an H-1B employee’s work authorization is tied to a single sponsoring employer, how can he or she be “available” to other employers after losing that job? The answer, per the Massachusetts Department of Unemployment Assistance, was clear: the H-1B worker was not “available.” A 2010 Board of Review Decision said that “the claimant must be legally authorized to work by the appropriate U.S. agency . . ..”
But, for many H-1B workers in Massachusetts, that may change.
What’s new in the Massachusetts’ Emergency Unemployment Regulations?
On March 12, 2020, the U.S. DOL sent guidance to the states concerning how to flexibly implement their unemployment eligibility rules in light of the COVID-19 pandemic. Among other things, the DOL guidance made clear that employees who are temporarily laid off due to COVID-19 may be considered “available” for work if the employer expects to recall the worker when business resumes and the worker remains available to work for that employer. In addition, under the Families First Coronavirus Response Act, state unemployment agencies were given “emergency flexibility” to modify their work search requirements. The FFCRA and its implementing regulations took effect on April 1 and will expire, or “sunset,” on December 31.
In response to the DOL guidance, the Massachusetts DUA quickly issued COVID-19 Emergency Regulations, which took effect on March 16. Unlike the FFCRA, the Emergency Regulations do not contain a sunset provision.
Under the Emergency Regulations, employees who are laid off or furloughed are eligible for benefits so long as they remain on “standby status.” Standby status applies to any employee who is “temporarily unemployed because of a lack of work due to COVID-19, with an expected return-to-work date.” For employees on standby status, the work search and availability requirements are waived so long as the worker (1) “takes reasonable measures to maintain contact with the employer” and (2) remains available for “all hours of suitable work offered by the claimant’s employer.” The DUA will ask the claimant’s employer to verify the standby status, which can last for up to eight weeks (or, at DUA’s discretion, for a longer period of time under narrow circumstances). If an employer informs the DUA that the worker “is not on standby status or does not have a return to work date within eight weeks, the claimant will be subject to” the traditional work search and “availability” requirements.
More recently, President Trump signed into law the Coronavirus Aid, Relief, and Economic Security Act, also known as “the CARES Act.” Under the CARES Act, a state unemployment agency may enter into an agreement with the U.S. Secretary of Labor to facilitate the payment of Federal Unemployment Pandemic Compensation. Those payments would amount to an additional $600 per week above and beyond normal unemployment benefits. Anyone eligible under the state’s unemployment laws is also entitled to federal pandemic compensation. Accordingly, H-1B workers who are adjudicated eligible for benefits under the Emergency Regulations should also be entitled to benefits under the CARES Act. Unfortunately, the Massachusetts DUA has not yet begun processing CARES Act benefits.
The bottom line is that, under the Emergency Regulations, the DUA will not be making any availability or work search determinations for employees found to be on standby status.
Does the emergency measure provide relief to H-1B workers in Massachusetts?
For H-1B workers who have been terminated without a return-to-work date, unemployment benefits probably remain unavailable. However, an H-1B worker on a temporary furlough or layoff may be eligible for unemployment benefits through this emergency measure if the worker (1) is on “standby status” per the regulations, and (2) remains authorized to work in the United States for the petitioning employer.
Absent guidance from the U.S. Departments of Labor and Homeland Security, employers still have to weigh the legal risks of whether it makes business sense to furlough or temporarily lay off the H-1B workers.
Employers of H-1B workers in Massachusetts should be aware that the DUA will continue to check the status of non-citizen applicants to verify work authorization using the SAVE (the Systematic Alien Verification for Entitlements Program) system. Accordingly, any contrary information provided to the DUA by the U.S. Citizenship and Immigration Services could adversely affect an H-1B worker’s application for unemployment benefits.
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