One of the explicit goals of the recently signed stimulus bill entitled “The American Recovery and Reinvestment Act of 2009 (“ARRA”)” is to provide assistance to “unemployed workers and struggling families.” To meet this goal, the ARRA seeks to provide benefits to employees who “separate” from their employment for family reasons. “Separate” is not defined in ARRA, so it is not currently known if the employee will receive benefits if on a leave of absence or only when the employee resigns.

Generally, an employee who resigns without coercion from his or her employer is barred from receiving unemployment benefits. However, the ARAA provides an exception to this rule, stating that an individual shall not be disqualified from receiving benefits when the employment separation “is for any compelling family reason.” Compelling family reasons include: (i) domestic violence, where such violence “causes the individual reasonably to believe that such individual’s continued employment would jeopardize the safety of the individual or any member of the individual’s immediate family;” (ii) “the illness or disability of a member of the individual’s immediate family;” or (iii) “[t]he need of an individual to accompany such individual’s spouse (I) to a place from which it is impractical for such individual to commute; and (II) due to a change in location of the spouse’s employment.”

The above provisions are not self-executing; individual states must choose to implement them. However, it can be expected that most, if not all, states will revise their unemployment compensation programs accordingly, as they are assured full reimbursement of additional expenses by the Federal Government. For affected businesses, this will mean an increased unemployment compensation tax rate.

To learn more about how your business could be affected, please be sure to contact your employment counsel at Smith, Gambrell & Russell, LLP.