Employer Guidance Regarding COVID-19 Impact on Unemployment Benefits in Iowa


  1. Do employees need to exhaust all vacation, sick leave, or personal time off (PTO) time prior to claiming unemployment benefits?

Yes. If an employer offers vacation, sick leave, or PTO time to employees, the employees must exhaust those benefits prior to claiming unemployment benefits. 

  1. Are employers required to lay off employees in order for the employees to be eligible for unemployment benefits?

Under normal circumstances, only employees who have a reduction in hours or who are involuntarily laid off by their employer through no fault of their own would be eligible for unemployment benefits. In the case of employees who are filing UI claims as a result of COVID-19, however, Iowa Workforce Development is temporarily allowing a broader eligibility standard than normal.  For example, employees who are unable to work for the following COVID-19-related reasons will be presumed eligible for unemployment benefits – such as employees who are out of work due to:

    • Caring for a family member;
    • Loss of childcare or school closures;
    • Employer shut down;
    • Need for the employee to self-quarantine;
    • Employee contracts COVID-19 and is unable to work.
  1. If an employee normally only works on a part-time basis, is the employee eligible for unemployment benefits?

Yes, provided that the employee satisfies the eligibility requirements for unemployment benefits. The relevant inquiry for determining eligibility is not “full-“ or “part-time” classification, nor based on hours worked -- but rather on the employee’s weekly earnings and eligibility.

  1. What is the amount of unemployment benefits an employee will receive?  

The amount of unemployment benefits an employee will receive is based on the employee’s wages and the number of dependents the employee claims. Weekly benefits can range from $87 to $591.

  1. How long does an employee remain eligible for unemployment benefits?

An employee who remains eligible may collect unemployment benefits up to 26 weeks. 

  1. Are business owners eligible for unemployment benefits under the program?

Under normal circumstances, business owners are not be permitted to claim unemployment benefits because a closure of the business is treated as a voluntary closure.  Given that the COVID-19 pandemic is outside of the control of employers, Iowa Workforce Development has indicated it intends to provide flexibility for such business owners to claim unemployment benefits.    

  1. Do employees need to seek alternative work during the period of unemployment?

Under normal circumstances, employees receiving unemployment benefits must actively seek work with other employers. For employees who are unemployed for COVID-19 related reasons and have properly indicated this on their claim forms, however, Iowa Workforce Development has indicated it will waive the requirement to search for a new job at this time. 

  1. How will an increase in employee claims affect my business?

Claims filed and identified as a direct or indirect result of COVID-19 will not be charged to employers. Employers will continue to be notified of claims, but fact-finding interviews will not be held.

  1. If a company chooses to lay off employees, does the company need to lay off all employees or can the company lay off only a portion of its workforce?

The choice of which employees to lay off is within the discretion of the employer. An employer can choose to lay off either some or all of its employees, but should be cautious to avoid making employment decisions based on protected classes (age, gender, perceived disability, etc.). For example, a company should not mandate only older employees be laid off simply because they may fall within an at-risk group for COVID-19.    

  1. How do employees file for unemployment benefits?

To expedite their claims, employees should file as soon as they are laid off by going online to https://www.iowaworkforcedevelopment.gov/ and clicking on “Apply for Unemployment.”

  1. How will the legislation currently under consideration by Congress impact unemployment benefits? 

    Potential federal legislation remains pending, so its impact on Iowa law is not yet clear. If paid leave becomes available under federal law, it would need to be exhausted before an employee seeks unemployment benefits. We will continue to monitor developments. 

  2. How long must an employee have worked before qualifying for unemployment insurance benefits? 

An employee must have worked and earned a certain amount of wages in work covered by unemployment insurance over the last 15-18 months.