On Tuesday, the Maine Legislature approved an omnibus package of measures aimed at responding to the health and economic impacts of coronavirus. Governor Janet Mills signed the bill into law on Wednesday.
The omnibus included measures to expand unemployment benefits to more Mainers affected by coronavirus-related loss of work hours and the creation of a new program to guarantee loans to Mainers who lose income as a result of the outbreak.
Changes to the Unemployment Insurance program
The primary resource for employees who lose work during this period is the Unemployment Insurance program. Most wage or salary employees are covered by this program, as are business owners if they work in an incorporated business and pay themselves a salary. Unemployment benefits are traditionally available to workers who lose their job through no fault of their own, such as people who are laid off.
The changes enacted on Wednesday expand eligibility to the following workers:
- People in quarantine because they have been diagnosed with COVID–19, the disease caused by the coronavirus, or who have been asked to isolate because they are suspected of having COVID–19.
- People who are temporarily laid off because of a partial or full closure of their business due to the outbreak of COVID-19.
- People who choose to take a temporary unpaid leave of absence to quarantine or isolate themselves to avoid a demonstrated risk of exposure or to care for a family member as a result of the coronavirus.
The law also eliminated the one-week waiting period, so those filing for benefits will receive them as soon as their application is approved. For those who know they will be returning to the same job after the outbreak, the law also waives the usual requirement to regularly apply for a new job.
Unemployment is only a partial wage replacement. It typically replaces 59 percent of a worker’s usual weekly earnings (including any declared tips), plus an additional $10 per week for dependents. The maximum weekly benefit is currently $455.
Consumer loan guarantee program
The omnibus bill instructed the Finance Authority of Maine to guarantee a certain number of interest-free loans issued by banks and credit unions in the state. Mainers with a loss of earnings due to the COVID-19 outbreak can apply to a bank or credit union to obtain one of these interest-free loans.
The maximum loan amount is the individual’s most recently monthly after-tax pay, up to $5,000. The loan terms include a grace period of 90 days after the end of the COVID–19 emergency, during which no repayments need to be made. After the grace period, the loan must be repaid within 180 days, during which time no interest will be charged. After 180 days, the bank or credit union may charge interest as usual. Mainers may apply for up to three loans, one every thirty days.
The no-interest loans are aimed at Mainers who do not qualify for unemployment insurance, or whose unemployment insurance has run out. Anyone with a loss of earnings due to COVID-19 may apply, but actual or potential unemployment benefits will greatly reduce the size of the available loan.
Offering the loan program is at the discretion of financial institutions, and not every bank or credit union may offer loans. Others may be planning to but may not have a program up and running yet. Contact your local bank or credit union to find out.
Small Business Administration Economic Injury Disaster loans
As a result of the coronavirus, Maine has received approval from the federal government for designation as an Economic Disaster Area. This designation allows business owners and nonprofit organizations to apply for up to $2 million in low-interest loans, with rates capped at 4.0 percent annually. To apply for these loans, visit the Small Business Administration website.
Federal action, including paid sick leave and emergency leave
On Thursday, President Trump signed an emergency relief bill which would provide further options for Mainers who are facing a loss of income or lack of work during the outbreak. More information about those changes can be found here.