Legal Alert

Arizona: Unemployment Compensation Update

by the Labor and Employment Group
April 20, 2020

Executive Order

On March 20, 2020, Arizona Governor Doug Ducey issued Executive Order 2020-11, ensuring that those who are out of work or facing economic hardship because of COVID-19 have access to unemployment benefits and directing the Arizona Department of Economic Security (DES) to make material modifications to Arizona’s unemployment insurance program. Changes include:

  • Adding to the list of people eligible for unemployment insurance (provided they meet existing requirements regarding work history, earnings, and residency) people who
    • work at a business that has been permanently or temporarily closed or has reduced hours because of COVID-19, resulting in a reduction of wages as defined by the U.S. Department of Labor;
    • have to quarantine because of COVID-19;
    • have to care for a family member with COVID-19; or
    • under any other scenario are separated from work for reasons related to COVID-19.
  • Waiving
    • the one-week waiting period after an employee loses a job before they apply for unemployment benefits;
    • work-search requirements for those receiving unemployment benefits; and
    • any increase in employer payments to the unemployment insurance fund for businesses whose employees receive benefits under this provision.

New Legislation

On March 27, 2020, Gov. Ducey signed into law SB 1694, which authorized the DES to implement alternative benefit eligibility and employer contribution requirements, retroactive to March 10, 2020, consistent with guidance issued by the U.S. Department of Labor for individuals and employers who are affected by COVID-19.

This new Arizona legislation also allows the DES to adjust eligibility requirements for employers faced with a reduction-in-force that choose to participate in the Arizona Shared Work Unemployment Compensation Program. The Shared Work Program allows an employer to divide the available work or hours among a specified group of employees in lieu of a layoff, and the employees can receive a portion of their UI benefits while working reduced hours. Normally, the maximum reduction in hours to remain eligible for the Shared Work Program is capped at 40 percent. The new legislation increases that ceiling to as much as an 80 percent reduction.

DES COVID-19 Website

The DES, in response to the EO and SB 1694, has created a separate site for “DES Services Related to COVID-19”, which can be found at At this site is a host of information and various resources about the expansion of and eligibility for UI benefits amid the COVID-19 pandemic such as:

Unemployment Insurance Benefits CARES Act

How to Apply for Unemployment Insurance Benefits

Unemployment Benefits COVID-19 Q&As
– Although these Q&As are intended mostly to assist individuals, they also provide useful guidance to employers about Arizona’s expanded UI.

DES also has provided a helpful section on Unemployment Insurance Extension Under CARES Act, which includes FAQs, plus this link to Additional FAQs from the U.S. Department of Labor, all of which are helpful resources for Arizona employers.

Copyright © 2020 by Ballard Spahr LLP.
(No claim to original U.S. government material.)

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This alert is a periodic publication of Ballard Spahr LLP and is intended to notify recipients of new developments in the law. It should not be construed as legal advice or legal opinion on any specific facts or circumstances. The contents are intended for general informational purposes only, and you are urged to consult your own attorney concerning your situation and specific legal questions you have.

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