job seekers in line to meet prospective employers at a job fair

Unemployed Americans line up to meet prospective employers at a Los Angeles job fair. As the worst of the pandemic seems to have passed, at least 36 states have reinstated their work search requirements, or plan to do so. (Mark Ralston/AFP via Getty Images)

States Roll Back Benefits as Jobs Remain Unfilled

By Zach Herman | June 8, 2021 | State Legislatures News | Print

As states look for ways to jump-start economies upended by the pandemic, many are encouraging people to get back to work. State strategies to incentivize reemployment include opting out of temporary supplemental federal unemployment insurance programs, reinstituting work search requirements for unemployment recipients, and creating one-time reemployment payments.

Currently, 24 states plan to opt out of the Federal Pandemic Unemployment Compensation program (FPUC) in June or July. Nebraska joined these ranks on May 24. (See maps below.)

Nineteen states are opting out of all three temporary federal programs: the FPUC, Pandemic Unemployment Assistance (PUA) and Pandemic Emergency Unemployment Compensation (PEUC). The programs were created by the Coronavirus Aid, Relief and Economic Security (CARES) Act of 2020 and extended by the American Rescue Plan Act until Sept. 6, when they expire.

The FPUC provides an extra $300 a week in unemployment benefits to recipients, and the PUA extended eligibility to gig workers and independent contractors. The PEUC established up to 53 weeks of additional unemployment benefits to qualified individuals who exhaust their regular unemployment benefits.

All three unemployment programs are temporary and administered through voluntary agreements between the U.S. Department of Labor and the states. During the height of the pandemic, all 50 states participated in the three programs. The law requires states to provide at least a 30-day notice to the Labor Department that they plan to terminate their agreements.

States cited multiple reasons for opting out of the programs:

 

Another way states are incentivizing workers to return to work is by reinstating work search requirements for unemployment recipients and by offering one-time cash payments to recipients who return to work.

Normally, recipients of unemployment insurance are required to search for new employment while receiving benefits. The CARES Act allowed states to waive that requirement for recipients of unemployment benefits. During the height of pandemic lockdowns and restrictions, most states waived all or most work search requirements. Currently, NCSL knows of 36 states that have reinstated their work search requirements, or plan to do so.

At least six states have created reemployment payment incentives for recipients who find work after receiving unemployment insurance. What qualifies an individual for these return-to-work bonuses varies by state. For instance, New Hampshire and Arizona offer the benefits only to those receiving less than $25 an hour (or about $52,000 a year). Depending on the state, workers must also complete four to 10 weeks of work before they qualify. Some states, including Colorado, Connecticut and North Carolina, are continuing to participate in the federal programs while also offering or planning to offer return-to-work incentives. As of this publication, North Carolina had not fully enacted its return-to-work bonus. NCSL is unaware of any states that have enacted legislation to create state-funded programs to replace the federal programs.

 

Zach Herman is a policy associate in NCSL’s Employment, Labor and Retirement Program.

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