New York’s Department of Labor (DOL) has been reaching out to those who received PUA (Pandemic Unemployment Assistance) through New York State. Even though Unemployment payments stopped a while back, this is still very relevant.
Don’t Ignore the Letter!
If you received an email or letter from the DOL, don’t ignore it! If you ignore it, chances are pretty high that you will have to repay the unemployment payments you received for weeks between December 27, 2020, and September 5, 2021. It is also possible that they will deem you ineligible for 2020 unemployment payments – this is not likely, but possible. There is a chance that the DOL will extend the deadline and/or give you another chance to provide proof, but it’s better not to risk it.
Who has to provide proof?
There were two programs under which people received Unemployment due to Covid-19: Standard Unemployment (UI) and Pandemic Unemployment Assistance (PUA). The requirement to provide proof is only for those who received PUA, not those who received UI. Most people who had regular W2 jobs before the pandemic received UI (unless your W2 income was not sufficient to receive UI – there was no minimum income needed in order to receive PUA). To understand more about PUA vs UI – see here.
Also, the requirement to provide proof is only if you received PUA in 2021. If you only received PUA for weeks in 2020 and did not receive payments for any weeks after 12/27/2021, then technically you should not be required to submit proof of eligibility. That being said, if you received an email requesting proof, we suggest providing the requested proof. Better safe than sorry.
How to Provide Proof
Go to pua.labor.ny.gov and log in using your DOL username and password. If you don’t need to provide proof, you will see a message that “You are not an authorized user of the PUA Eligibility System.” Otherwise, choose one of the four sections and upload proof of eligibility.
Why the DOL is Requesting Proof
Covid Unemployment was meant to end on December 27, 2020. When Unemployment payments were extended into 2021 (as part of the Coronavirus Response and Relief bill), federal guidelines said that states must get proof of eligibility from applicants.
This Act requires that any individual who received PUA benefits on, or after December 27, 2020, is required to provide documentation proving that they had a prior attachment to the workforce. This attachment can be demonstrated by submitting documentation that proves employment, self-employment, or the planned beginning of employment or self-employment.
Attachment to the Workforce
You need to provide proof that you were “attached to the workforce” prior to collecting unemployment. Being “attached to the workforce” means that ANY of the following 4 scenarios existed prior to your unemployment start date:
- Employed
You were employed prior to your unemployment start date. If you were on payroll and received a W2, then you were definitely “employed”. - Scheduled to start Employment
You were scheduled to start a job prior to your unemployment start date. You had an offer to start a job (but then couldn’t start the job due to Covid). - Self-Employed
You were self-employed prior to your unemployment start date. - Scheduled to start Self-Employment
You were going to start being self-employed (e.g. start a business) prior to your unemployment start date
Important: Many people think that to qualify for ‘scheduled to start work’, it is enough that you were ready to start and were looking for a job. To prove “scheduled to start employment” or “scheduled to start being self-employed” you must show an actual job (or self-employed business) that you were ready to start. Searching for a job is not enough to show “attachment to the workforce”.
Timeframe of Attachment to Workforce Proof
As a general rule, the attachment to the workforce must have taken place either in the calendar year prior to your unemployment start date or between January 1st and your unemployment start date. For example, if your unemployment start date was 3/15/2020, you need to provide proof of being “attached to the workforce” between 01/01/2019 and 3/15/2020.
The letter from the DOL is confusing and many people assume it means that you need to provide proof of attachment to the workforce from before 12/27/2021. This is not the case. The proof needs to be from before your unemployment start date – see here for how to find your start date.
Although the NY DOL website says you need documentation from 2019, federal guidance says that proof from 2020 before you started collecting unemployment is sufficient. This is also confirmed by the NY DOL via Twitter.
That being said, here are a few points to keep in mind:
- If your proof is that you worked before starting to claim PUA, best to use the 2019 proof, as that will match exactly the DOL website’s instructions.
- If your proof is that you were scheduled to start work/self-employment, the most ideal proof would likely be from on or not too long before your unemployment start date.
- If your proof of work prior to the pandemic is only from 2020 (e.g. you started work in 2020 and did not work in 2019), a Schedule C or W2 from 2020 is not sufficient, as you must provide proof that the work was from prior to your unemployment start date (which the Schedule C or W2 does not show).
Acceptable Proof
The DOL has a long list of options for various scenarios. One acceptable proof is all you need.
See here for the list of accepted documentation for each scenario. Read it carefully.
Simplest Proof: If you have a few options to show proof, choose the simplest one. If you have a Schedule C from 2019 (if you were self-employed in 2019), we think that is the best proof to provide.
Self-Employed in 2019 but No Schedule C
If you were self-employed during 2019 (think: freelance / cash-based work) but didn’t file the income as part of your 2019 tax return, look into amending your tax return to report that income, then you can submit the Schedule C from your amended tax return (speak to your accountant).
Overpayment Waiver
Even if the DOL rejects your documentation, or you do not upload proof, and the DOL, in turn, sends you an overpayment notice (and demands all the Unemployment funds back from 202 1 and perhaps 2020 as well), all is not lost, as you may be eligible to request a hardship waiver. Getting approved for the waiver is only an option if you are deemed “without fault”.
When Unemployment benefits were extended into 2021 (as part of the 12/27/2020 bill), the bill included:
“… In the case of individuals who have received amounts of pandemic unemployment assistance to which they were not entitled, the State shall require such individuals to repay the amounts of such pandemic unemployment assistance to the State agency, except that the State agency may waive such repayment if it determines that—
(A) the payment of such pandemic unemployment assistance was without fault on the part of any such individual; and
(B) such repayment would be contrary to equity and good conscience.”