This article provides a
general summary of the following:
Act's impact on Arizona's unemployment insurance (UI) benefits system.
The availability of the "Shared Work Program" as a workforce solution
available to employers through Arizona's administration of its UI system.
The CARES Act's provisions allowing employers to defer paying certain 2020
payroll taxes for 1-2 years.
Employers facing layoff, furlough, and other workforce reduction decisions
should review the information below and consult with their attorneys
regarding the applicability of the options covered herein.
1. UI Benefits Summary
There is no requirement to lay off employees in order for employees to
receive UI Benefits.
Arizona allows UI benefits to laid off employees and
employees who have had their hours reduced. Arizona's UI benefits statute
states that "[a]n individual shall be deemed 'unemployed' with respect to
any week during which the individual performs no services and with respect
to which no wages are payable to the individual, or with respect to any week
of less than full-time work without any fault on the individual's part if
the wages payable to the individual with respect to the week are less than
the individual's weekly benefit amount."
The weekly benefit amount.
Currently, Arizona's maximum weekly benefit
amount is $240. The CARES Act provides an additional $600 per week payment
to each recipient of unemployment insurance during the time they are
eligible to receive state-unemployment benefits. This would raise the
maximum weekly benefit amount to $840 per person in Arizona. The CARES Act
also provides an additional 13 weeks of federally-funded benefits through
December 31, 2020, to help those who remain unemployed after exhausting
their state UI benefits.
Beginning date for expanded UI benefits.
The assistance shall be
available to an individual beginning on or after January 27, 2020, through
December 31, 2020.
Qualifying reasons for UI.
To receive UI benefits in Arizona, the Arizona Unemployment Code
establishes certain bases for qualification. These bases include that an
individual (1) is able to work; (2) has engaged in a systematic and
sustained effort to obtain work; (3) is making job contacts; and (4) has
been unemployed for waiting period of one week.(See the definition of
"unemployed" set forth above.)
The qualifying reasons for UI were further expanded March 20, 2020, by
Governor Ducey's Executive Order 2020-11. Specifically, the expanded
qualifying reasons for UI now include (1) individuals whose employer has
permanently ceased or dramatically reduced operations due to COVID-19; (2)
individuals who cannot work due to a quarantine; (3) individuals that leave
employment due to a risk of exposure or to care for a family member infected
with COVID-19; and (4) individuals separated from work for reasons related
The CARES Act further expands the number of qualifying reasons for
unemployment providing assistance to individuals who may not be eligible for
assistance under state law. Through the provision of the Act identified as
the Pandemic Unemployment Assistance Program, the CARES Act provides
additional COVID-19 related qualifying reasons. This expansion also includes
qualification of UI-benefits for the self-employed as long as certain
conditions are met.
Employers charge accounts will not be
charged for COVID-19-related UI
Governor Ducey's Executive Order 2020-11 provides that employers
receiving UI clams due to COVID-19 reasons will not have their charge
account increased. In order for this to apply, the stated reason for an
employee's UI application must be due to a COVID-19 related reason (e.g.,
office closure due to COVID-19).
Waiver of one-week waiting period to receive benefits.
Executive Order 2020-11 waived the one week waiting period requirement
existing under Arizona law to receive UI benefits.
2. Arizona's "Shared Work Program" as an Employer Resource
Employers facing a reduction in business, rather than a complete shutdown
of business, may benefit from use of Arizona's unemployment "shared work
program." This program allows an employer to divide the available work or
hours of work among a specified group of affected employees in lieu of a
layoff, and it allows the employees to receive a portion of their lost
income due to the reduction from the State in the form of UI benefits. Both
employers and employees win through the use of this program because it
allows for continuity of operation while supplementing wages received by
employees. To participate in a plan, an employer must fill out an
application and become an approved shared work employer by the Arizona
Department of Economic Security. The processing time for the application may
take up to 15 days or longer. Therefore, employers considering this program
should consult with their attorneys and advisors now and submit the
application as soon as possible.
The CARES Act expressly provides funding to support existing state
"short-time compensation" programs, such as Arizona's shared work program,
by authorizing an additional $600 per week to be added to the existing state
weekly benefit amount.
3. Payroll Tax Deferment
The CARES Act allows deferment of payroll taxes owed for 2020. Employers
and self-employed individuals may defer payment of the employer share of the
Social Security tax they otherwise are responsible for paying to the federal
government with respect to their employees. Employers generally are
responsible for paying a 6.2-percent Social Security tax on employee wages.
The provision requires that the deferred employment tax be paid over the
following two years, with half of the amount required to be paid by December
31, 2021, and the other half by December 31, 2022. The Social Security Trust
Funds will be held harmless under this provision.
Additionally, the FFCRA provides tax credits and refunds for benefits
paid in accordance with the permissible reasons for leave pursuant to the
We encourage employers to reach out to their accountants and attorneys
regarding the tax aspects of the FFCRA and CARES Act.
 A.R.S. § 23-621(A)
 A.R.S. § 23-771