(Reuters) - The U.S. Labor Department on Thursday gave states flexibility to amend their laws to provide unemployment benefits in events related to the coronavirus in an effort to limit the damage on the economy from the pandemic.

States can pay benefits in cases of temporary unemployment because the coronavirus is preventing employees from coming to work. Individuals quarantined with the expectation of returning to work after the quarantine is over can also receive unemployment benefits as well as those leaving employment due to a risk of exposure or infection or to care for a family member.

“The Administration is using all available tools to decrease the risk of coronavirus in the United States and to assist workers who may be affected,” said Labor Secretary Eugene Scalia in a statement. “Under the guidance issued today, states have greater assurance about the circumstances in which they are authorized to extend unemployment insurance benefits to Americans whose employment has been disrupted by coronavirus.”

The coronavirus, which causes a respiratory disease called COVID-19, has killed at least 38 people in the United States and sickened more than 1,300, according to data from Worldometer. Overall, more than 4,700 people have died from COVID-19 and over 127,000 have been infected.

The highly contagious virus has triggered as sharp stock market sell-off and driven U.S. Treasury yields to record lows, with investors fearing it is the catalyst that will derail the longest economic expansion on record, now in its 11th year.

The Fed last week slashed its benchmark overnight interest rate by a half percentage point to a target range of 1.00% to 1.25%, in its first emergency rate cut since the financial crisis. Financial markets have fully priced in a rate reduction of as much as 75 basis points at the U.S. central bank’s March 17-18 policy meeting.

“Clarifying the flexibility in which a person may be eligible for unemployment insurance benefits during the coronavirus outbreak will ease financial burdens for those workers affected by the virus,” said John Pallasch, Assistant Secretary for the Labor Department’s Employment and Training Administration, which coordinates unemployment benefits.