Update: State Actions Limiting Supplemental Unemployment Benefits

McGuireWoods Consulting

As of May 11, 2021, eleven Republican-led states had announced their intention to phase out expanded unemployment in a response to poor employment figures and reports of employers facing difficulty finding workers. Less than a month later, twenty-five of twenty-seven Republican-led states have announced an end to federally funded supplemental unemployment in their states.

As a refresher, the CARES Act provided a Pandemic Unemployment Compensation (PUC) payment of $600 a week to supplement the weekly benefit determined under state UI laws for all programs through July 31, 2020. A $300 weekly supplement was later added for a period following July 31, and the December coronavirus relief legislation provided a $300 supplement from December 26, 2020 to March 14, 2021. The American Rescue Plan Act extended that $300 federal supplement through the week ending September 6, 2021. According to the Center on American Budget and Policy Priorities, the average American receives $387 from their state in weekly unemployment payments, which totals $687 with the federal supplement. Based on a 40-hour workweek, that means the average unemployed American receives the equivalent of $17.17 an hour.

Unemployed populations in Alaska, Mississippi, Missouri and Iowa will stop receiving the expanded unemployment check this week. These were the first states to announce their intention to end the program as a state must provide at least 30 days’ written notice to the U.S. Department of Labor (DOL) in order to opt out. A full timeline for state opt-out effective dates is below:

Expiration State
June 12 Alaska, Iowa, Mississippi, Missouri
June 19 Alabama, Idaho, Indiana, Nebraska, New Hampshire, North Dakota, West Virginia, Wyoming
June 26 Arkansas, Florida, Georgia, Ohio, Oklahoma, South Dakota, Texas, Utah
June 27 Montana
June 30 South Carolina
July 3 Maryland, Tennessee
July 10 Arizona

Republican-led states Arizona, Montana, Oklahoma, and New Hampshire joined Democratic-led states like Colorado and Connecticut offering one-time paid incentives for individuals hired for new jobs that are currently receiving unemployment. 

Vermont and Massachusetts are the two of twenty-seven Republican-led states that have not called for an end to expanded unemployment in their states. Both governors have reinstated the “work search” requirement in their states as a qualification to receive unemployment, which was suspended due to the pandemic.

In states that continue to participate in the pandemic expanded unemployment program, additional benefits will expire the week following Labor Day. President Biden has said that he will not seek an extension and that the deadline “makes sense.”

Regardless of state, employers should be aware of these changes and deadlines. Employers should anticipate state-level changes to modernize the unemployment system as was passed in Florida this year, changes to payroll taxes, and tweaks to unemployment funding.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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