July 6, 2020

Senate Democrats Propose Plan to Wind Down Enhanced Unemployment Benefits

The pandemic unemployment bonus payment of $600 per week pays many workers more to remain unemployed than they would earn returning to work.  Many employers report that this additional UI payment – which is set to end on July 31st – has made it difficult for them to hire or re-hire workers.

Nevertheless, on Wednesday, Senate Minority Leader Chuck Schumer and Senator Ron Wyden introduced legislation that would tie enhanced unemployment benefits to joblessness levels in each state.

Under the bill, the additional $600 a week that jobless workers have been receiving during this economic crisis would be phased out in stages in each state as its unemployment rate drops below 11 percent.  Each percentage point drop in the rate, based on a three-month average, would correspond to a $100 decrease in enhanced weekly benefits, meaning at least some additional benefits would be available in a given state until its unemployment rate drops below 6 percent.

It would also allow Americans out of work to continue getting 13 weeks of extended benefits, provided under the CARES Act until March 27 of next year.  After that, the extension would be phased out as a state’s unemployment rate drops from 8.5 percent to 5.5 percent, with even more weeks available in states where unemployment is above 8.5 percent.  Additionally, the bill would extend unemployment benefits designed for gig workers and others who are not eligible for traditional unemployment insurance until March 2021, after which those benefits would also be tied to states’ unemployment levels.