The U.S. recently experienced more historic devastations due to Hurricane Helene’s impact to Alabama, Florida, Georgia, North Carolina, South Carolina, Tennessee and Virginia and Hurricane Debby in the states of Florida, Georgia and South Carolina. Every year we seem to experience more extreme weather patterns and natural disasters, and every year companies struggle more and more to absorb the financial impact of these events. Fortunately, there are government relief programs, including disaster unemployment assistance to support companies and employees in these difficult circumstances.
First, the federal government provides support for newly unemployed individuals following disasters. This support does not negatively impact employers. For these tax benefits, it’s important companies understand how to best prepare and manage as they work toward recovery.
Unemployment Management for Disaster Unemployment Assistance
Following the declaration of a natural disaster, employers should understand unemployment benefit options for their employees and clearly communicate those benefit options to employees in a timely manner. For employees who continue to receive pay following a loss of active employment, employers can prevent confusion by informing employees that they do not qualify for unemployment benefits. For employees no longer receiving pay, employers should educate employees on the type of unemployment claim they should file to effectively manage unemployment tax consequences.
President Biden approved emergency declarations because of Hurricane Debby for the states of Florida, Georgia and South Carolina. Furthermore, Biden approved emergency declarations because of Hurricane Helene for the states of Alabama, Florida, Georgia, North Carolina, South Carolina, Tennessee and Virginia. Usually after the declaration, the respective state unemployment departments announce that affected individuals can apply for disaster unemployment assistance (DUA).
Who is Responsible for Paying Disaster Unemployment Assistance Claims?
DUA is a federally funded benefit program. Unlike a regular unemployment insurance claim, the employer is not charged. For this reason, it is essential for an employer to respond to any unemployment claims during a disaster to correctly assign financial responsibility.
DUA helps individuals whose employment has been lost or interrupted due to a major disaster but are not eligible for regular unemployment insurance benefits.
An individual is generally eligible for assistance when a major disaster has been declared by the President of the United States and one of the following results from the disaster:
- An individual
- no longer has a job or a place to work;
- cannot reach the place of work;
- cannot work due to damage to the place of work; or
- cannot work because of an injury caused by the disaster.
More on Qualifying for Disaster Unemployment Assistance
If an individual no longer has a job or place of work, can’t reach their place of work, can’t work because of damage to the place of work, or can’t work because of injury caused by the disaster, then they are likely eligible for DUA. The impact on the employee must be a direct result of the major disaster identified by the federal government. Individuals may also be eligible for this benefit if they become the primary breadwinner because the head of household was injured or incapacitated due to the major disaster.
Following is information relative to eligibility for DUA in the affected states named above:
Alabama
Press Release – there has been no press release from the Governor’s Office, it is merely the Federal press release.
- Eligibility Requirements
- An initial application for DUA must normally be filed within 30 days of the state announcement date of the availability of assistance, and
- Unemployment must have been caused as a direct result of a major disaster declared by the President of the United States of America, and
- The wages used to calculate your weekly benefit amount meet the state unemployment benefit criteria, and
- Self-employed individuals must furnish documentation including the last completed year’s income tax records within 21 days of filing their application to substantiate wage information used in the calculation of benefits.
- Conditions of unemployment as a direct result of the major disaster (one or more must have occurred)
- No longer have a job
- Unable to reach the place of employment
- Was to start work in the major disaster area and the job no longer exists or you are unable to reach the job
- Became the breadwinner or major support of the family because the head of household died
- Cannot work because of an injury incurred during the major disaster
- How to file
- www.labor.alabama.gov or call 866-234-5382. If hearing impaired call 800-499-2035
Florida
- DUA is available to individuals if they are:
- Unemployed as a direct result of the disaster
- Scheduled to start employment but were unable to as a direct result of the disaster
- Unable to reach the job or self-employment location because they had to travel through an affected area and are prevented from doing so as a direct result of the disaster
- Do not qualify for regular unemployment benefits from any state
- Become the primary breadwinner because the head of the household died as a result of the disaster
- Unable to work because of an injury that was a direct result of the disaster
- File an application within 60 days of the declaration
- SEND NECESSARY DOCUMENTS WITHIN 21 DAYS OF FILING APPLICATION.
- WORK SEARCH REPORTING, WAITING WEEK AND EMPLOY FLORIDA REGISTRATION REQUIREMENTS FOR REEMPLOYMENT ASSISTANCE CLAIMS HAVE BEEN TEMPORARILY WAIVED.
- What must an individual have to file a claim?
- Social security number
- Alien registration number and expiration date, if that applies
- Name and address of most recent employer
- If worked in a different state in the past two years, the name and address of that employer is needed too
- Proof of the individual’s self-employment for the past two years if self-employed. Examples include 1099 statements, state or federal tax returns, bank account records, a statement from bank showing business account or a copy of the title or deed to a business property.
- If the individual was supposed to work but could not because of the disaster, they will need to give the name and address of the employer and the date they were supposed to work.
- How to file
Georgia
- DUA Qualifications
- Unemployment or inability to perform services must be a direct result of a major disaster declared by the President of the United States.
- Must have experienced one of the following conditions of unemployment as a direct result of the disaster:
- Reside in, work in or have to travel through the major disaster area to get to or from work
- Unemployed for at least a week following the date the major disaster occurred
- Unable to reach your place of employment
- Scheduled to start work and the job no longer exists or you were unable to reach the job
- Became the major support because the head of household died as a result of the major disaster
- Lost the majority of income or revenue because the employer or self-employed business was damaged, destroyed or closed by the federal government
- Unable to work due to injury suffered as a direct result of the disaster
- MUST FILE AN APPLICATION FOR DUA WITHIN 30 DAYS OF THE DATE THE GDOL ANNOUNCES THE AVAILABILITY OF DUA.
- Must present documented proof of employment and wages within 21 calendar days from the date of filing a DUA claim
North Carolina
- Eligibility requirements
- Lived, worked or were scheduled to work in an area declared a disaster area by the President of the United States
- Lost employment or had your employment interrupted as a direct result of the disaster
- Have exhausted or are not eligible for state unemployment benefits
- Eligibility is determined weekly so an individual must continue to be out of work as a direct result of the hurricane each week to get benefits
- What is needed to apply
- County of residence
- County of employment
- Mailing address and zip code
- Valid telephone number
- Social security number or alien registration number
- Proof of employment and income if self-employer, farmer or commercial fisher
- How to file
- Go to www.des.nc.gov
- Create an account
South Carolina
- Qualification requirements
- Must have had a week of unemployment following the date the major disaster began
- Is unable to reach their place of employment
- Was scheduled to start work and the job no longer exists or was unable to reach the job
- Became the major support because the head of the household died as a direct result of the disaster
- Cannot work because of an injury caused as a direct result of the major disaster
- Eligibility Requirements
- Not eligible for regular UI
- Unemployed as a direct result of the disaster
- Able and available for work unless injured as a direct result of the disaster
- Filed an application for DUA within 30 days of the date of the public announcement of the availability of DUA
- Has not refused an offer of employment in a suitable position
- Must continue to file weekly or biweekly claims for DUA benefits according to the instructions given by the state agency where the DUA application is filed.
- DUA benefits are paid for up to 26 weeks beginning with the first week following the date the major disaster began and ending with the 26th week following the date the major disaster is declared by the President of the United States.
- Proof of employment is required. Examples would be income tax return, bank statements, last pay stubs, work order, etc.). If proof of employment cannot be provided at the time the claim is filed, the claimant has 21 calendar days from the time the claim was filed to meet this requirement. Failure to submit this documentation with the 21 days will result in a denial of DUA and any benefits already paid will be considered overpaid, which will be expected to be repaid.
- Applications for DUA must be filed within 30 days of the announcement of the availability of DUA in the state.
- How to file
Tennessee
- Qualification Requirements
- Has had a week of unemployment following the date the major disaster began
- Is unable to reach their place of employment
- Was scheduled to start work and the job no longer exists, or the individual was unable to reach the job
- Became the breadwinner or major support because the head of the household died as a direct result of the disaster
- Cannot work because of an injury caused as a direct result of the disaster
- Eligibility Requirements
- Not eligible for regular UI
- Unemployed as a direct result of the disaster
- Able and available for work, unless injured as a direct result of the disaster
- Filed an application for DUA within 30 days of the date of the public announcement of the availability of DUA
- Has not refused an offer of employment in a suitable position
- How to file
Virginia
Unemployment is a direct result of the major disaster if the unemployment resulted from:
- Physical damage or destruction of the place of employment
- Physical inaccessibility of the place of employment due to its closure by the federal, state or local government in immediate response to the disaster
- Lack of work or loss of revenues if prior to the disaster, the employer or self-employed business received at least a majority of its revenue or income from an entity in the major disaster area that was damaged or destroyed in the disaster or an entity in the major disaster area closed by the federal, state or local government.
- Qualification Requirements
- No longer have the job that provided primary source of income
- Are unable to reach their place of employment
- Cannot work because of an injury caused by the storm
- Were unable to begin employment or self-employment due to the storm
- Became the primary support of their family because of the death of the head of household because of the disaster
- Eligibility Requirements
- Must not be eligible for regular unemployment benefits in any state
- Must be able to work, ready and willing to accept work
- Must have time and means to work, unless they suffered injuries directly linked to the disaster
- How to file
Responding to Unemployment Claims Resulting from a Disaster
It is important for employers to proactively share DUA claims eligibility and application information, so employees know how to file correctly if eligible. Employees are responsible for indicating why they are seeking unemployment. If the reason they are not working is due to the disaster, they should indicate this when filing their claim.
For any unemployment claim, whether it’s a regular claim or DUA, the employer should respond that the person is not working because of the disaster if this is true. If an employee mistakenly submits a regular unemployment claim, they will be told they are not eligible but can receive DUA instead. This response prevents your unemployment tax obligation from incorrectly increasing.
Tax Credit for Disaster Relief
When a disaster occurs, government aid has come in many forms. One way has been to provide a federal tax credit known as the “Employee Retention Credit for Employers Affected by Qualified Disasters” commonly known as a disaster zone credit or disaster relief tax credit. This incentive provides a credit against federal income tax valued up to $2,400 (up to 40% of $6,000 of wages per qualifying employee). This is an important tax credit enabling employers to keep wages flowing to their employees when they need it most.
Unfortunately, Congress has been slow to enact this type of relief in recent years. At the time of this writing, there has been no announcement of a tax credit related to Hurricane Helene.
Employer Next Steps to Support Employees
As unfortunate as natural disasters are, there are steps employers can take to minimize the impact on their employees and their business. Providing information on DUA claims can help employees receive support if they are no longer receiving a paycheck. Understanding the difference between a DUA and regular claim can also help an employer respond to claims correctly to manage their unemployment tax liability and risk.
Please reach out to Experian Employer Services today or call 1-866-997-0422 to discuss your particular scenario for unemployment cost management and how to mitigate the impact of a natural disaster on your employees and business.