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Larry Johnson, according to a report in the popular press, worked the night shift at Windows on the World, the restaurant at the top of the north tower of the World Trade Center. The week after the towers collapsed, Johnson applied for unemployment insurance, but the state of New York rejected his application because he had not earned enough money over the previous 18 months. SeeDavid Leonhardt, “Out of Work and Out of the Benefits Loop,” The New York Times, Oct. 17, 2001, at C1. Johnson is one of over 22,000 workers who lost their jobs because of the World Trade Center tragedy and applied for unemployment insurance. See“World Trade Center Disaster Causes Workers to File UI Claims, Emp.” in N.Y. St. News. (N.Y. St. Dept. of Lab.), October 2001. However, some of these jobless workers may have their applications for benefits rejected. According to the Department of Labor, fewer than 40 percent of jobless Americans were able to receive unemployment benefits last year. See“Tough Times for Laid-Off, Low-Income Workers,” USA Today, Oct. 30, 2001, at 1A. Most states, including New York, determine eligibility based on earnings over the calendar year prior to the day the job is lost. This often excludes people who have worked for less than a year, as well as part-time employees and low-wage workers who have insufficient earnings to establish a benefit year under state law. Self-employed individuals are ineligible for state unemployment insurance as well. A special federal program, the Disaster Unemployment Assistance (DUA) Program, is supposed to help those who are out of work as a direct result of a disaster and not eligible to receive regular state unemployment insurance. People who were separated from their jobs because their workplaces were destroyed or closed, or who lost business because of the events on Sept. 11, may be eligible. This month’s column provides an overview of the DUA Program. THE DUA PROGRAM Section 410 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act of 1988 (42 U.S.C. 5177(a)) authorizes the payment of DUA to persons who become unemployed as a direct result of a major disaster as declared by the President. Only those found ineligible for regular state unemployment insurance can be eligible for DUA. The DUA Program is funded by the Federal Emergency Management Agency and administered by the states in accordance with an agreement each state has signed with the Secretary of Labor. See66 Fed. Reg. 56,960 (Nov. 13, 2001), 2001 WL 1401232. ELIGIBILITY In order to receive DUA, an individual must first apply for unemployment insurance in his or her state. If the person does not qualify, then he or she may file a DUA claim, and is eligible if full or part-time employment or self-employment has been lost or interrupted as a “direct result of a major disaster.” See20 C.F.R �625.5 (2001). On Nov. 13, the United States Department of Labor released a new interpretive rule to clarify when unemployment is a “direct result of a major disaster.” The new rule is expected to increase the number of individuals who can avail themselves of benefits under the DUA Program. See“DOL Says New Rule Will Lift Restriction on Eligibility for Disaster Unemployment Aid,” Daily Lab. Rep. (BNA) at A-1 (Nov. 13, 2001). The new rule clarifies that unemployment is a direct result of a major disaster if it is an “immediate result of the disaster itself, and not the result of a longer chain of events precipitated or exacerbated by the major disaster.” 66 Fed. Reg. 56,960. More specifically, the rule states that an individual is eligible for DUA if his or her unemployment resulted from: (1) the physical damage or destruction of the work site; (2) the physical inaccessibility of the work site due to a federal government closure of the work site, in immediate response to the major disaster; or (3) a lack of work, or loss of revenues, provided that the employer, or the business in the case of a self-employed individual, prior to the disaster, received at least a majority of its revenue or income from either an entity damaged or destroyed in the disaster, or an entity closed by the federal government in immediate response to the disaster. However, individuals who become unemployed as the result of a general decline in commerce in response to the major disaster are not unemployed as a “direct result” of the major disaster and thus are not eligible for DUA. Id. If a claimant is found to be eligible for DUA, then not unlike a recipient of regular unemployment benefits, the claimant must actively look for work and accept suitable work. However, special exceptions apply for individuals injured and unable to perform services as a result of the disaster. See20 C.F.R. � 625.4(g). COMMON SITUATIONS There are several categories of individuals who may qualify for DUA. First, self-employed individuals and business proprietors who typically could not get regular unemployment insurance benefits, may qualify for DUA if they lost or suffered a substantial reduction or interruption of self-employment activities as a direct result of the disaster. See20 C.F.R. � 625.5(b). Second, individuals who had insufficient wages or earnings in covered employment to establish a benefit year under state unemployment insurance law may be eligible for DUA if they lost employment as a direct result of the disaster. This includes: (1) individuals unemployed because of an injury caused as a direct result of the disaster; (2) individuals who cannot reach their place of employment because of the disaster; and (3) individuals who were scheduled to start work but became unemployed because they cannot reach work or no longer have a job as a direct result of the disaster. See20 C.F.R. � 625.5(a). Third, an unemployed individual who has become the breadwinner or major supporter of a household due to the disaster-related death of the former head of the household may be eligible for DUA. See20 C.F.R. � 625.5(a)(4). The individual becoming the breadwinner does not need to have wage credits and could qualify for DUA even if the deceased would have had regular unemployment insurance eligibility. BENEFITS DUA benefits are available for 26 weeks or until the recipient returns to work or self-employment, whichever is shorter. See20 C.F.R. � 625.2(f). The weekly assistance payable under DUA is computed-based on the same formula used to compute regular unemployment insurance benefits in the state where the disaster was declared. Id.at � 625.6(a). However, under the federal regulations, no individual can collect less in DUA than one-half the state’s average weekly unemployment insurance benefit. Id.at � 625.6(b). In New York, this means that the minimum DUA benefit is $126 a week. N.Y. St. Dept. of Lab., Disaster Unemployment Assistance Information, at http://www.labor.state.ny.us. If an applicant is eligible for DUA because the head of the household dies as a direct result of the disaster, the DUA rate will be the rate the deceased head of the household would have been entitled to receive. If the applicant is entitled to a higher rate based on his or her own earnings, the higher rate would apply. Id. DUA benefits are reduced by any other wage loss compensation, including benefits or insurance proceeds for loss of wages due to illness or disability; supplemental unemployment benefits pursuant to a collective bargaining agreement; private income protection insurance; workers’ compensation by virtue of the death of the head of the household as a direct result of the major disaster; and the prorated amount of a retirement pension or annuity, to the same extent that such amount would be deducted from regular unemployment insurance benefits. See20 C.F.R. � 625.13(a). APPLICATION The deadline to apply for DUA for those affected by the Sept. 11 World Trade Center attack has been extended until Dec. 16. Persons applying should contact their state’s Department of Labor. Various sources for additional information on DUA can be found on the Web sites of the United States Department of Labor, http://www.workforcesecurity.doleta.gov/ unemploy/disaster.asp and the New York State Department of Labor, http://www.labor.state.ny.us. To see the federal DUA regulations, click on http://www.dol.gov/ dol/ allcfr/ETA/Title_20/Part_625/toc/htm. John P. Furfaro is a partner at the firm of Skadden, Arps, Slate, Meagher & Flomin New York and Maury B. Josephson is a principal in the Law Office of Maury B. Josephson. Risa M. Levine, an associate at Skadden Arps, assisted in the preparation of this column.

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