The increase in vaccinations and decrease in the COVID-19 infection rate has led to a rapid reopening of the U.S. economy. But as the country starts to fully reopen and businesses ramp back up, the need to recall or rehire employees — some of whom have been collecting enhanced unemployment benefits — has created a new crisis point: labor shortages. A growing number of states are seeking to combat this crisis by moving to end federally funded pandemic unemployment benefits, including the extension of the number of weeks of available benefits and the extra $300 per week in enhanced unemployment benefits received by most unemployed workers. What do you need to know about this development, and what can you do to try to turn the tide at your own place of business? Here is a 10-step plan to help you attract and retain former employees and new applicants.
States Begin to Opt Out
The pandemic-related programs providing enhanced unemployment benefits in each state are authorized and governed by an agreement between the state and the Department of Labor. States choosing to opt out of these benefit programs have seized upon the language that permits the state to opt out of these programs upon 30 days’ notice. As of the date of publication, nearly a dozen states have taken steps to end the federal pandemic unemployment assistance programs, including Alabama, Arkansas, Iowa, Mississippi, Missouri, Montana, North Dakota, South Carolina, South Dakota, Tennessee, and Utah.
Will Other States Join Them?
How many states will join this trend is uncertain, and there is pushback to those that are planning to opt out. The Biden administration has suggested that the state opt-outs are not needed as it does not see evidence that the enhanced unemployment compensation benefits are a significant factor in the labor shortage. Others point to a recent Yale University study finding that the enhanced unemployment benefits do not dissuade people from seeking work. In fact, there has been a rise in women who have made the choice to leave the workforce.
But the Biden administration has also signaled a recognition of the problem, with President Biden stating that the White House will “make it clear that anyone collecting unemployment who is offered a suitable job must take the job or lose their unemployment benefits.” This guidance reflects that reality that almost all state unemployment agencies currently require or request that the employer notify the agency when an employee is called back to work after receiving unemployment. In addition, almost all states have created dedicated webpages where employers can report employees who have been recalled back to work but are continuing to draw unemployment benefits.
Rather than opting out of the pandemic unemployment programs, some states are taking other steps to control the pandemic unemployment benefits. Many states have already taken steps to reinstate unemployment requirements previously waived during the pandemic, including requiring the unemployed to document a job search each week to maintain their benefits.
10 Tips to Attract Applicants
Regardless of whether your state is one that plans to opt out of the pandemic unemployment compensation programs, you cannot rely on former employees returning to their jobs. Many large employers recognize that the pandemic has changed how post-pandemic workers view the job market. This is particularly true for unskilled workers. In many ways, the worker shortage is reminiscent of the problems that employers faced just prior to the pandemic when the labor force at near full capacity. As the post-pandemic recovery has fueled a similar surge, you must become creative to attracting former employees and new applicants back to the workforce. Further, while the push to limit unemployment benefits may result in a reinvigorated job market in your state, you will need to take steps to attract or entice workers to return to the workforce. The following are 10 tips to attract workers back into the labor market:
Keep in mind that these tips implicate many employment laws and you should consult with your legal counsel to ensure compliance.