Current federal proposals
Last week, a bill was introduced in the Senate to provide unemployment benefits comprehensively to all workers affected by the pandemic. As the sponsoring senators explain:
The program will be particularly helpful for those without paid sick leave, and will cover self-employed workers and workers without sufficient work history to qualify for regular unemployment insurance.
Workers who would qualify for assistance under the program include:
- Individuals who are sick or who have been exposed to coronavirus
- Individuals who must care for someone who is sick with coronavirus
- Individuals who cannot reach their place of work because of a quarantine
- Individuals who need to self-quarantine to protect themselves from coronavirus
- Individuals who must care for a child because of a school closure
- Individuals who are working reduced hours due to coronavirus. (Individuals who have been laid off are covered by traditional unemployment assistance. While individuals who have had their hours cut by their employer generally qualify for traditional unemployment assistance, this proposal would ensure workers do not fall through the cracks if they are working reduced hours.)
The House has prepared its own bill, called the Take Responsibility for Workers and Families Act. This bill includes numerous provisions to assist hospitals in providing needed medical care as well as making that pandemic care more affordable to all.
For workers and businesses, the bill provides:
- Economic assistance payments: $1,500 of immediate assistance per individual, up to $7,500 for a family of five. This benefit would be available to anyone with an individual taxpayer identification number, as well as to our nation’s retirees and unemployed individuals.
- The expansion of the Earned Income Tax Credit for workers without children for the first time in 25 years.
- An increase in, and expansion of, the Child Tax Credit, and a change to make it fully refundable for families who currently make too little to receive the full credit.
- A fully refundable employer payroll tax credit tied to the payment of employee wages during the crisis to encourage employee retention.
The bill also provides for some specific benefits and unemployment add-ons for those affected by the pandemic:
- The creation of a temporary Federal Pandemic Unemployment Compensation (FPUC) of $600 a week for any worker affected by COVID-19 and eligible for state or federal unemployment compensation (UC) benefits. The FPUC, combined with the underlying state unemployment benefit, would replace 100 percent of wages for the average U.S. worker.
- The expansion of eligibility for unemployment compensation to self-employed workers, individuals who had contracts for work that were cancelled due to the virus, and new entrants to the job market, such as recent college graduates who otherwise would not qualify.
As NELP has pointed out, the exclusion of gig/mis-classified workers from traditional employment has dire consequences for those workers during an economic downtown.
In these volatile times, safeguarding the long-term health of the U.S. economy and society will require that all working people have good jobs that provide livable wages and benefits and a robust set of policies and programs that build economic security in cases of unexpected injury or illness and job loss.
The author of this post, Rebecca Smith, offers some excellent advice about what states can do to address this problem:
- Announce that certain workers are presumptively eligible for unemployment insurance–including clearly identifying online platform employers like Uber and Lyft that are likely to have thousands of jobless workers applying for benefits–and accept a simple attestation from workers that shows that they meet the definition of employee;
- Since their employers have not reported wages into state systems and payroll records are an application requirement, allow workers to upload evidence of their earnings when applying and accept any evidence that workers have at hand, while allowing workers an additional short period to collect earnings data and submit it to the agency;
- Expedite processing of such applications, so that benefits get out the door quickly;
- Take steps to audit large employers whose workers are presumptively eligible. With so many state funds in an already depleted state, agencies cannot afford to give free passes to employers who cheat. For example, the State of New Jersey has recently assessed $649,000 against Uber for failing to pay its payroll taxes.
Luckily, proposed federal legislation is expanding unemployment benefits to include mis-classified/gig workers. Still, the employers of these workers should not continue getting a free ride by mis-classifying their workers.
The Families First Coronavirus Response Act
This bill was signed into law last week and provides some need backstop support for state unemployment systems in return for some modest reforms in eligibility and processing by the states. Maurice Emsellem has the details:
This paper summarizes the UI provisions of the Families First Coronavirus Response Act, which takes effect on April 3, 2020. The law provides a down payment of $1 billion in federal funding to help the states meet the huge challenge of processing UI claims resulting from the economic downturn. The emergency administrative funding is divided into two $500 million tranches, which are intended to help fill a major gap in federal support that has long plagued the UI system.
The new law also provides critical incentives to expand access to UI, which requires action in many states. The paper describes the law and the federal implementing guidance, the key next steps for state policymakers, and a number of positive state reforms recommended by the U.S. Department of Labor (DOL) for worker advocates and state policymakers to prioritize.
Maurice Emsellem of NELP has prepared a table tracking the efforts of the states in responding to this crisis. The highlights include:
- Over the past two weeks, at least 19 states have taken action to waive the one-week waiting period that all but eight states (GA, IA, MD, MI, NV, NJ, VT, WY) impose for most workers to collect UI benefits.
- Especially comprehensive executive orders were issued by governors in Louisiana, Michigan, Nebraska, North Carolina, Ohio, and other states, covering the waiting week work search waivers, and other issues. For example, Louisiana and Ohio indicated that COVID-19 benefits would not be “charged” to the employer’s “experience rating,” and Michigan’s executive order improved the work-sharing program and required the state to provide 26 weeks of UI (rather than the 20 weeks provided under the state’s current law). At the governor’s direction, Vermont’s agency has ordered expedited processing of UI claims.
- Massachusetts and Washington State have adopted emergency regulations, which include strong language clarifying the rights of workers to collect UI while in “standby” status and awaiting a determination to return to work from their employers, and several states (Maine, Maryland) and the District of Columbia passed emergency legislation.
- Several states (including California and Washington State) have developed especially well-designed outreach material, flyers, and FAQs communicating, in clear and simple terms, workers’ rights to access UI and other benefits in response to COVID-19.
- The governors of California, New York, and Washington State requested a “major disaster” declaration under the Stafford Act for their states, which was granted by the President (however, a determination is pending on whether Disaster Unemployment Assistance will be approved).
- New Hampshire’s governor issued an executive order directing that “self-employed” people will be eligible for UI benefits for reasons related to COVID-19.
On March 12, 2020, the US Dep’t of Labor issued guidance clarifying what measures the states can immediately take to improve access to UI for workers who lose their jobs or are temporarily separated from work due to COVID-19 (the table provides a summary of the most helpful state provisions adopted as of March 24, 2020). NELP has also published a set of recommendations for state reform and an unemployment reform toolkit for state advocates.
As events and laws are changing on a daily basis, none of these documents can be considered comprehensive. But, as of March 24th, they show that several states have recognized the tremendous problems they face and the consequences of inaction at this moment.
Finally, eligibility requirements for all states prior to the pandemic are available here.
Britain plans on paying 80% of wages to laid-off workers. But, implementation problems mean that benefits will likely NOT be paid out until the end of April.
NELP now has a specific page for its pandemic-related resources.
Finally, Joshua W. Mitchell has suggested one way to avoid the administrative bottlenecks in Britain: channel the benefits to workers through payroll processing companies.