March 19, 2020
Today the U.S. Department of Labor (DOL) reported that national unemployment insurance (UI) claims for the week ending March 14 increased by 70,000, to 281,000 (seasonally adjusted): “During the week ending March 14, the increase in initial claims are clearly attributable to impacts from the COVID-19 virus.” Non-seasonally adjusted data by state is available: For the week ending March 14, Washington’s initial claims were 14,846—8,230 higher than the week ending March 7 (the second largest increase behind California). For the week ending March 7, Washington had the third highest increase (846) in initial claims.
Yesterday Employment Security Department (ESD) Commissioner Suzi LeVine said, “Last week, we saw a 150% increase in claims, and we are seeing an even more dramatic increase this week.” (This week’s data won’t be released until March 26.) Also, “SharedWork, a layoff aversion program that employers may utilize to reduce the hours of their staff but avoid laying them off, has experienced a more than 500% increase last week from its usual volume.”
Workers who are affected by COVID-19 may be eligible for state benefits under paid sick leave, paid family and medical leave, workers’ compensation, or UI. The Employment Security Department (ESD) has a nice chart showing scenarios under which those benefits may apply. (ESD implemented emergency UI rules last week to address situations related to COVID-19.)
Unemployment benefits are based on an individual’s earnings. The current minimum weekly benefit in Washington is $188 and the maximum is $790. The maximum duration of benefits is 26 weeks. Typically, individuals must be unemployed for a week before being eligible for benefits; yesterday Gov. Inslee suspended that requirement through April 17, for claims filed on or after March 8.
EHB 2965, the bill that makes appropriations from the rainy day fund for the response to COVID-19, includes $25.0 million for a new COVID-19 unemployment account. Normally, when workers are laid off, their unemployment insurance benefits are charged to their former employers, whose UI tax rates then increase (this is called experience rating). Under EHB 2965, the UI benefits given to employees who were temporarily laid off due to COVID-19, were approved by ESD to be on standby, and returned to their same employment will be reimbursed by the COVID-19 unemployment account instead of being factored in to the employer’s experience rating.
Until June 30, 2021, the bill also allows employees under quarantine to meet UI work requirements if they are “able to perform, available to perform, and actively seeking work which can be performed while under quarantine or isolation.” (Normally, individuals must be able and available for any work for which they are “reasonably fitted.”)
Meanwhile, Congress has passed legislation that waives federal work search, waiting period, and other UI requirements. The legislation also includes $1 billion in emergency administrative grants to states for UI. Additionally, for states that receive the grants, any extended benefits will be financed entirely by the federal government (rather than a 50-50 split with the state).
Additionally, Gov. Inslee’s office said yesterday that they are
continuing to work with the White House and our congressional delegation to declare a disaster in Washington to become eligible for Disaster Unemployment Assistance. Once established, the state would have the authority to serve impacted Washingtonians who are otherwise not eligible for assistance through our unemployment insurance system. This would cover workers with less than 680 hours as well as independent contractors who otherwise may not have met state eligibility criteria.
Note, though, that according to the Congressional Research Service, “the current statutory definition of ‘major disaster’ . . . for the purposes of DUA [Disaster Unemployment Assistance] does not include a disease outbreak. Thus, DUA will not be available under current law in response to COVID-19.”
UI benefits are paid from the state’s UI trust fund (which is funded by employer taxes). According to DOL, as of Jan. 1, Washington’s UI trust fund balance was $4.778 billion. That is the second highest trust fund balance in the country, after Oregon ($5.055 billion). (ESD’s November 2019 UI trust fund forecast noted that the trust fund held $4.86 billion as of Nov. 30, 2019, which was about 15.5 months of benefits. In 2008, the trust fund held about 21.2 months of benefits.)
DOL measures the solvency of state UI trust funds, based on a recommendation from the Advisory Council on Unemployment Compensation that a state should have reserves “sufficient to pay at least one year of Unemployment Insurance Benefits at levels comparable to its previous ‘high cost’.” By this measure, DOL reports that 31 states (including Puerto Rico and DC) have UI trust fund solvency levels at or above the recommended minimum solvency standard. Washington’s solvency is 23rd highest, above the minimum standard. (Twenty-two states and the Virgin Islands are below the minimum standard.)Categories: Categories , Economy , Employment Policy.