Loyola University School of Law, JD 2022
During the expedited legislative session on May 20-24, the Illinois General Assembly passed HB 2455 which was signed into law as Public Act 101-633 on June 5, 2020. While well-intentioned, this Act could create a huge liability for school districts depending on how the Illinois Department of Employment Security (“IDES”) interprets the law. School districts are already facing an uncertain financial future and this law is adds more uncertainty and possibly more financial insecurity.
Provisions of the law
Ordinarily, school district employees are ineligible for unemployment benefits between school terms. School employees generally have a “reasonable assurance of continued employment” unless they are notified of a reduction-in-force or a dismissal. Because of this, an employee who works, and is paid, during the academic year only is not eligible for unemployment benefits during the summer months, even though they might fit the criteria for benefits. Normally, to establish eligibility for unemployment benefits, an applicant must show that they are not working, not being paid, are able and available for work, and did not leave employment voluntarily or because of misconduct.
HB 2455 amended the Unemployment Insurance Act in a way that excuses the normal ineligibility for non-instructional, non-research, and non-administrative school employees from March 15, 2020 until December 31, 2020. These types of employees are generally referred to as Educational Support Personnel or ESPs and might include custodians, paraprofessionals, transportation workers and drivers, food service workers, and administrative assistants. There is no requirement in the Unemployment Insurance Act that workers must be notified of the termination of their employment to be eligible for benefits. Additionally, IDES has changed its eligibility requirements through emergency rulemaking and waives the requirement for a claimant to be actively seeking work. ESPs who are not working and not being paid would otherwise be eligible for benefits, even if they have a reasonable assurance of continued employment when the Fall term begins.
This legislation was likely drafted and passed to protect ESPs from the burden of unemployment during school closures resulting from COVID-19. One could speculate that the legislature intended to prevent an argument that the school closure was an extension of the academic break. However, in a joint letter signed by major education organizations, Illinois schools had already agreed to pay their employees regularly from March 17 until March 30, 2020, regardless of the difference in workload. This promise to pay school employees was extended through the end of the suspension of in-person instruction. With those promises in mind, eligibility for unemployment benefits would be useless for school employees from March 17, 2020 until the end of the academic term.
That must mean, then, that the amendment was passed to create eligibility for ESPs over the summer, merely because they are not working, even though they have never received such benefits before and they likely never will again. However, IDES has created a way for schools to notify IDES of employees who have a reasonable assurance of continued employment. If IDES is not providing benefits to these employees, but only those employees who do not have a reasonable assurance of continued employment (even without a formal RIF or dismissal) then there is no substantial change in the amount of benefits that school districts would be accountable for. If an employee files for benefits and is denied during the summer because of the typical restriction for academic personnel but is not offered work in the Fall, they are entitled to retroactive benefits. However, if IDES provides benefits for all non-paid ESPs over the summer, regardless of their employment assurance, it could leave schools with an immense and unexpected financial liability during a time of unprecedented uncertainty.
Impact on school districts
The regular rate for a school district to contribute to the Unemployment Insurance Trust Fund is 100 percent of any benefits paid. That means that the school would be liable for all of the benefits paid to any of their 10-month ESPs who file a claim for any time they are not working and not being paid. The addition of Section 1502.4 to the Unemployment Insurance Act in the same bill offers some home for cash-strapped school districts. The addition provides that employers will not have to contribute to the fund for any benefits that “begins on or after March 15, 2020, and before December 31, 2020, and is directly or indirectly attributable to COVID-19”.
This provision depends on an interpretation of what is attributable to COVID-19, the unemployment or the benefits. If the issue is whether the unemployment is what is attributable to COVID-19, school districts would still have to pay for benefits over the summer months because the unemployment is attributed to the academic year and their employment contract, not COVID-19. However, if the statute is interpreted as whether benefits are what is attributable to COVID-19, schools may not be charged for their contributions because these employees would not be receiving benefits if it were not for this amendment which is attributable to COVID-19.
How IDES will treat these claims remain to be seen. The issues of whether ESPs have a reasonable assurance of continued employment and whether school districts will be liable for their benefits are both subject to IDES interpretation. Obviously, IDES is processing more claims than ever before. The Department has not issued guidance on this issue yet and without guidance on the impact of this amendment, ESPs will file claims and school districts will contest the benefits, adding more processing activity for IDES to slog their way through. Without clear agency guidance, this provision leaves ESPs and school districts with an uncertain financial future in a time when assurance is more valued than ever before.