Labor

Some states are ending enhanced unemployment benefits to get residents back to work

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Earlier this week, New Hampshire announced it will soon join a growing list of states opting out of the federal government’s unemployment enhancement programs. 

Currently, the U.S. Department of Treasury’s Pandemic Emergency Unemployment Compensation (PEUC) program, which extends the amount of time those who are out of work could claim unemployment benefits beyond 13 weeks, and the Federal Pandemic Unemployment Compensation (FPUC) program, which provides an additional $300 per week to those on unemployment, are set to expire on September 4. But as COVID-19 case numbers fall and businesses across the nation face worker shortages, some states are choosing to opt out of the program now, in an effort to incentivize a return to work.

On May 4, Montana’s Department of Labor and Industry issued a press release that said the biggest threat it faced wasn’t the virus, but a “critical labor shortage affecting nearly every industry,” and announced the state would stop participating in PEUC and FPUC on June 27. 

Montana was the first state to turn away federal unemployment enhancements, but since then, twenty-one other states have followed their lead. 

New Hampshire is the latest and first state in New England to do so. Though it’s opting out of the federal enhancements, the state does have plans to provide additional support to workers. Gov. Chris Sununu announced the state will distribute $10 million in work incentives. The Summer Stipend Program is available to people making under $25 an hour. After eight weeks of work, part-time workers will receive $500 and full-time workers will receive $1,000. 

Sununu described this as an attempt to switch from incentivizing people to stay home, to incentivizing people to go to work. Whether Maine will adopt a similar approach to getting its economy back on track is unclear.

Maine’s Department of Labor currently has no plans to end the enhanced employment benefits prior to the program’s expiration in September, though it did recently reintroduce the requirement that unemployment recipients actively search for work. The requirement has been relaxed because of the pandemic and the definition of what qualified as searching for work was expanded to include, “job-related education or skills development, and networking.” But beginning May 23, people receiving unemployment will be required to actively search for work and turning away a reasonable offer of work will be considered grounds for disqualification from receiving benefits.

But returning to work doesn’t necessarily mean giving up benefits. 

Thanks to federal unemployment enhancement programs, some people will be able to work and still collect partial unemployment benefits. The Mixed Earners Unemployment Compensation (MEUC) program, a part of the Continued Assistance for Unemployed Workers Act of 2020, gives a $100 supplemental benefit to people with multiple income streams from a mix of traditional employment and self-employment. To qualify, claimants must have earned wages and a net income of at least $5,000 from self-employment in the year before they applied for unemployment.

Maine also has several programs that allow people to collect partial unemployment. The WorkShare program helps businesses retain employees during slow downs by providing partial unemployment benefits to workers who have had their hours reduced by no less than 10% and no more than 50%.

People who are partially-unemployed will be able to collect unemployment benefits if their weekly gross earnings are less than the weekly benefit they qualify for, which includes the $300 boost from the federal government, minus five dollars. The amount of the benefit people eligible for this program would receive would equal the amount of the benefit they qualify for minus their gross earnings over $100. Maine labor law disregards the first $100 a person earns per week.

Whether this will act as an incentive in drawing people back into the workforce, or whether it will be more effective than the single-payments states like New Hampshire are using to try to incentivize employment, remains to be seen.

About Katherine Revello

Katherine Revello is a reporter for The Maine Wire. She has degrees in journalism and political science from the University of Maine. Her writing has appeared in Reason, The Washington Examiner, and various other publications. Got news tips? Contact Katherine at krevello@mainepolicy.org.

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