Federal and state responses: Week 2

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.

There is a FAQ on proposed economic assistance payments, and another FAQ on proposed unemployment compensation changes is also available. There is also a summary of the entire bill.

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.

State responses

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

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.

Miscellaneous

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.

NELP commentary on Obama Administration UI proposals

Rick McHugh of the National Employment Law Project has two posts describing the Obama Administration’s unemployment proposals.

In the first post, he notes that the Administration wants to mandate a norm of 26 weeks of state UI benefits, which currently exists in Wisconsin after the waiting week, use of an alternative base period for determining eligibility for UI benefits (also currently available in Wisconsin), opening up UI eligibility to those looking for part-time work (currently NOT available in Wisconsin), and requiring states to allow workers to quit jobs for compelling family circumstances without losing unemployment benefits (currently available in Wisconsin but not well-enforced).

The Administration is also offering $5 billion in funds to states for modernization efforts and an option to create a volunteer work option — aka Georgia Works — for claimants.

In the second post, McHugh describes how the administration wants to: (a) institutionalize a four-tiered extended benefits program and the triggers for such benefits; (b) mandate minimum UI taxes, index the taxable wage base for unemployment taxes to inflation, impose a minimum state UI tax rate, and create new triggers for an increase in federal UI taxes when a state’s UI reserves fall below certain thresholds; and (c) make work-share options a permanent feature of the unemployment system.

The declining market for unemployment benefits

Claire McKenna and Rick McHugh of NELP describe how unemployment benefits continue to be artificially low across the nation in 2015. Their key finding:

Using the latest data, we find that the recipiency rate in 2015 remained at a record low, with just over one in four jobless workers (27 percent) receiving UI benefits in 2015.

Their measure for a recipiency rate actually shows Wisconsin as above-average in the nation at 36%. As noted in their discussion of their methodology, there are several ways to measure recipiency rates. Their measure, for instance, does not account for penalty weeks (such as those where over-payments are being recovered because of concealment). Given the push for alleging concealment in Wisconsin, this 36% recipiency rate in Wisconsin is probably too generous.

NELP releases scathing report on Florida unemployment

On September 22nd, the National Employment Law Project released a report about a rapid decline in unemployment claims in Florida. In 2011, Florida enacted a series of restrictions on claim filing and in 2013 launched a new claims-filing system called CONNECT. The result: in 2014, just 12% of jobless Floridians received unemployment benefits, the lowest rate of recipiency in the nation (tied with South Carolina). For instance, a chart in this report shows a sudden and significant drop starting around the middle of 2011, when new claim-filing protocols went into effect, and then accelerating the decline in first payments relative to the national average.

FL first claims filing chart

“Ain’t No Sunshine: Fewer than One in Eight Unemployed Workers in Florida Is Receiving Unemployment Insurance” at 6. Some of the new filing requirements Florida instituted and eerily similar to what Wisconsin is doing. Florida’s claim-filing requirements, for instance, include:

  • An initial skills assessment consisting of a 45-question test to be completed online as part of the initial claim process; (Note: In 2014, the Florida Legislature acted to make the skills assessment voluntary and removed participation in the assessment process as a condition of benefit eligibility.)
  • A requirement that UI claimants register for work electronically on the “Employ Florida Marketplace” as a condition of benefit eligibility, including completion of a “background wizard” (another detailed online application in order to qualify for a first benefit payment) and an online resume; and
  • Detailed documentation of five employer contacts per week on weekly claim certifications filed electronically as a condition of weekly eligibility.

Id. at 3. These requirements, among others, led the US Department of Labor in 2013 to issue a lengthy and detailed probable cause finding that Florida was discriminating against claimants because of their national origin and their lack of proficiency with English. Unfortunately, Florida rejected these findings and, as evidence from this report, seems to have doubled down on putting up obstacles to making a successful unemployment claim. As the report concludes:

Florida has imposed a series of burdensome process requirements and technological obstacles so severe that unemployment insurance is virtually inaccessible for the average jobless Floridian seeking benefits earned through their work histories. Instead of remedying this problem, the implementation of the CONNECT system appears to have made the situation worse. And for the small share of jobless workers who do receive benefits, the limited weeks available have proven to be inadequate time for most to secure suitable new employment.

A program in which the number of disqualifications for reasons relating to availability, work search, and procedural reporting requirements exceeds the number of first payments is not unemployment insurance; it is an obstacle course. And the steep decline in Florida initial claims over the past four years (by 44 percent compared to 32 percent nationally) strongly suggests that these obstacles are discouraging unemployed workers from filing for unemployment insurance.

The federal government funds administration of the unemployment insurance program, and federal law establishes standards with which states must comply to ensure qualified unemployed workers can access benefits and are not unfairly denied. The State of Florida is thwarting the fundamental rights of unemployed workers to apply and qualify for unemployment insurance. An insurance program that pays benefits to fewer than 4 in 10 unemployed workers who apply and fewer than one in eight jobless workers in the state can hardly be called insurance. Unemployed Floridians struggling to make ends meet until they get that next job deserve a UI system that is fair and accessible. The Social Security Act was intended to hold state unemployment insurance programs to standards of fairness and accessibility. There should be no exception for Florida.

“Ain’t No Sunshine: Fewer than One in Eight Unemployed Workers in Florida Is Receiving Unemployment Insurance” at 8.

Missouri cuts its unemployment eligibility

Statement from Christine Owens, executive director of the National Employment Law Project, on the Missouri legislature’s actions to prohibit local minimum wage increases and further slash unemployment insurance in today’s veto session.

“Amidst a continuing crisis of stagnant wages, with real wages falling most steeply for the lowest-paid workers, it was appalling today to see a super-majority of legislators in Missouri—all of them Republicans—vote to override Governor Jay Nixon’s veto of a bill that strips local governments of the right to enact higher minimum wages and other economic benefits for their citizens.

“By votes of 114-46 and 23-9, the Missouri House and Senate both achieved the dubious distinction of corralling two-thirds majorities to force enactment of HB 722—the so-called plastic-bag-ban preemption bill—which was rewritten to prohibit local wage and benefit ordinances as well.  In doing so, they weakened local democracy, imposing their own lesser judgment on local communities that were fully within their right to seek improvement of wages and living standards.

“Federal and state inaction on raising the minimum wage prompted the cities of St. Louis and Kansas City, Missouri to enact higher local minimum wage ordinances this summer—to $11 by 2018 and $13 by 2020 respectively.  The fact that they did so by August 28 should protect those ordinances from the direct effect of HB 722’s enactment, even as the same business lobbies that pushed through the veto override attempt to block or roll back those ordinances through court challenges and other legal maneuvers.  But other cities in Missouri will now have no authority to improve the wages of their lowest-paid citizens, thanks to this veto override.

“It is deeply disturbing that a super-majority of Missouri’s legislators think that keeping wages down for the lowest-paid workers, and suppressing local democracy, should be among their highest priorities.  It is simply shameful.

“But it is not surprising, given the devotion these same legislators have displayed to the cause of slashing jobless aid for the state’s unemployed workers.  In an unprecedented move, the state senate also voted to override the governor’s veto of HB 150 — a bill that institutes a sliding scale for the number of weeks of unemployment benefits. The bill cuts the maximum weeks of jobless aid to 13 when the state’s unemployment rate is less than 6 percent, as it has been for the last 12 months.

“This move will place Missouri second to only North Carolina, at 12, for fewest weeks of unemployment benefits in the nation.  The legislature had already cut maximum weeks from 26 to 20 back in 2011.  The backers of that cut argued that federal unemployment benefit extensions were available to make up the difference — so, they asserted, no big deal.  Incredibly, this year the backers of these even more draconian cuts continued to assert that jobless workers would have federal extensions available, when, in fact, no federal benefits have been available since the end of 2013.

“For procedural reasons, the legislature’s legal authority to override the governor’s veto of HB 150 in today’s veto session is in serious doubt.  Senate Republican leaders chose to pursue the override today anyway, so their action will likely be challenged in court and possibly be nullified.  That would be the just result.  Losing a job is tough enough for unemployed workers and their families.  Let’s put a stop to this needless piling-on by heartless politicians.”

AARP Public Policy Institute report on unemployment and care-giving

From Rick McHugh, Staff Attorney at the National Employment Law Project:

A newly-released report show that individuals who lose jobs due to circumstances related to care-giving responsibilities for a spouse or family member are not likely to receive unemployment insurance benefits. Access to Unemployment Insurance Benefits for Family Caregivers, written jointly by the AARP Public Policy Institute, National Employment Law Project, and Center for Law and Social Policy is a comprehensive 51-state overview of how unemployment insurance rules apply to those who are forced to quit their jobs or who are fired when they undertake care-giving responsibilities for spouses, older relatives, or other family members requiring care-giving assistance.

Based upon a review of legal rules and interviews with agency staff and local advocates, the report finds that a combination of outmoded rules and lack of supportive resources leaves many potential recipients in the dark about their unemployment insurance options. In addition, incomplete implementation results in many denials of claims even in states that have adopted more favorable rules excusing quits for compelling family circumstances.

The report on family care-giving and unemployment insurance was commissioned by the AARP Public Policy Institute as part of its Raising Expectations Long-Term Services and Supports Scorecard project and was supported by funding from The SCAN Foundation and The Commonwealth Fund. The co-authors of the report are Kathleen Ujvari of the AARP Public Policy Institute, Liz Ben-Ishai of CLASP, and Rick McHugh of NELP.