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A Simple Way to Cover Paid Sick Leave in Response to COVID-19: Modify Unemployment Insurance

The economic, workplace, and societal disruptions resulting from the spread of COVID-19 have led to rising panic that calls for decisive policy action. All policy approaches need to reach America’s most vulnerable workers immediately, especially workers who lack paid sick leave and job protections. Our low-wage, hourly-wage, and gig workers are some of the most vulnerable. They are the most likely to go to work despite risk of transmission to others out of the fear of missing a paycheck.   

A lot of policies are currently on the table, including payroll tax holidays, paid sick leave, small business support, and increased access to government benefit programs like SNAP, WIC, EITC, and child care benefits.  

There are many options for paid sick days. One idea gaining traction is federal modification of unemployment insurance to reach people now, and a simple definition change could trigger application of the disaster unemployment assistance program.  

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Our Suggestion: Expand the Definition of “Major Disaster” to Trigger Disaster Unemployment Assistance

Lawmakers could provide immediate income support to quarantined and temporarily dislocated workers, particularly those without paid sick days, with an update to an existing federal mechanism. Specificallylawmakers could update the Robert T. Stafford Disaster Relief and Emergency Assistance Act (Stafford Act) to include disease outbreak as a category that qualifies for the “major disaster” designation and triggers availability of Disaster Unemployment Assistance, or DUA. For areas with a major disaster designation, DUA provides up to 26 weeks of unemployment benefits to those who are unable to work due to the disaster and are not eligible for regular UI. Eligible individuals include self-employed workers, those who are unable to go to place of employment, and those who are unable to work due to a disaster-related injury. 

By adding disease outbreak to the categories that qualify for a “major disaster” designation, workers could receive unemployment benefits if they are temporarily dislocated due to reasons related to COVID-19. Accordingly, lawmakers should also update eligibility requirements so that anyone who has coronavirus, is told by a doctor or official to quarantine, or is otherwise temporarily barred by their employer from coming to the workplace can receive DUA benefits. Additionally, the Stafford Act should be updated so it covers all Child Care and Development Block Grant Fund-eligible programs so that these protections are extended to the early childhood workforce. 

This approach has several advantagesFirst, since it updates an existing federal mechanism, it has the potential to provide direct assistance to dislocated workers relatively quickly. Second, it would provide benefits to workers lacking paid sick leave without forcing costs onto employers at a time of economic crisis. Third, since it covers self-employed workers, it would provide cash benefits to gig economy workers who typically also lack paid sick leaveFourth, and mostly importantly, it prevents further spread of COVID-19 by quickly providing cash assistance to those who have been exposed to the virus and are encouraged to stay home from work. 

Americans should not have to forego seeking care for themselves or their family members due to employment obligations. While that may not be realistic in all cases, it is paramount to do whatever we can to support employers and employees so individuals can make decisions to protect their health and the health of others by limiting exposure and the spread of the virus. We need to help make the healthy choice the easy choice. 

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