With the coronavirus outbreak leading to increased layoffs across industries, unemployment insurance claims are skyrocketing. The U.S. Department of Labor released the latest data on unemployment on Thursday, showing that there have been 281,000 unemployment claims this week, an increase of 70,000 compared to last week. And this information only shows the earliest wave of people whose employment has been affected by COVID-19. Additionally, The New York Times reports that the Trump administration is asking states not to provide precise unemployment numbers at this time.
Today’s UI numbers are from last week. If a worker was laid off last week and waited to apply for benefits until this week, they are not in the data. Further, the full weight of this economic shock is still ramping up as businesses realize what they are up against.
— Heidi Shierholz (@hshierholz) March 19, 2020
Unemployment claims filed in Ohio:
— Sherrod Brown (@SenSherrodBrown) March 18, 2020
Last Sunday: 536
This Sunday: 11,995
Monday: 36,645
For tens of thousands of Ohioans the economic crisis is already here. We should have already voted on the House-passed bill.https://t.co/xCAUPzhgGW
What we know is that every day, more Americans are being laid off or struggling in employment limbo as their companies drastically cut hours or temporarily shut down operations. Should this happen to you, you may be wondering if you should file for unemployment, and whether requirements to do so have changed due to the special circumstances of the COVID-19 outbreak.
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We spoke to Nicole Salk, Senior Staff Attorney at Legal Services NYC, and Andrew Stettner, a senior fellow at The Century Foundation, to find out everything you need to know about unemployment benefits right now.
Who’s Eligible For Unemployment?
Stettner explains it simply: “Unemployment insurance is just based on what you did in the prior week, and why,” he says. "So in the prior week, if you didn't work, and that was because of something out of your control, you're eligible for unemployment benefits.” Sometimes being fired means you’re ineligible, but not always. If you quit your job without good cause, you might be ineligible.
There’s also a threshold for how much you earned and how long you worked over a certain period of time — usually a year — which is set by your state. Salk says the earnings threshold is fairly low. “Most workers who've earned wages in at least two separate calendar quarters are probably eligible for unemployment,” she says. You can determine the exact minimum thresholds, and other resources, here.
In light of COVID-19, though, the federal government has given more leeway to states. If your position has temporarily been suspended or your hours have been cut, you could be eligible for unemployment. It’s also crucial to remember that if your employer is claiming to pay you for scheduled hours, but is reducing those hours to zero, you should absolutely try filing for unemployment.
My brother got laid off yesterday from Marriott.
— thot leedurr (@DocDre) March 17, 2020
He applied for unemployment; they called to check his employment status.
Marriott HR says he’s NOT laid off but on a ZERO hour schedule. So he can’t qualify for unemployment NOR does he have health insurance.
“It’s an individual determination, but people should apply for unemployment even if they’re not receiving wages on the books,” says Salk. “They should at least try, and I would encourage anybody who’s been laid off to apply.”
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You Could Be Misclassified
Usually, if you’re classified as an independent contractor — a self-employed graphic designer, for example — you’re not eligible for unemployment benefits. But some people have an employer and yet are still classified as independent contractors. Depending on the state, the law can override this and say that you’ve been misclassified.
“Uber drivers in New York, for unemployment insurance purposes, are considered employees,” says Salk. Uber disagrees, and does not pay into unemployment insurance or report wages. She notes that because of this, while Uber drivers in New York can and should apply for unemployment, the process is more complicated than for people whose wages have been reported.
Even if you’re getting paid in cash, you can still apply and submit your own calculations for how much your earnings were over the past year. Especially in times of crisis, unemployment law tries to err on the side of the claimants — or should, in theory. Salk notes that unfortunately, there’s little recourse if you’re an undocumented worker who has been laid off.
Partial Unemployment Or Reduced Hours
If you’re not officially laid off yet but suspect you will be in the coming days or weeks, can you start the process now? Unfortunately, no. “You have to wait until it's clear that you don't have a job,” Salk says.
But if your hours have been reduced or you work part-time jobs, you’re probably eligible. “If you worked part time, but your work earned less than $400, you might be eligible for something — but not the full amount,” Stettner says as an example. The exact thresholds vary by state.
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“New York has such a system, but it's actually the worst in the country,” says Salk. “It’s very inadequate.” This is because while in most states, partial unemployment is based on wages, in New York it’s based on the number of days you worked — even if you worked just an hour a day.
How Can You Apply, And How Soon Will You Get Paid?
Most states allow you to file a claim online. Some state unemployment websites are reportedly crashing due to overload, and several states are asking people to file on certain days depending on the first letter of their last name due to the high volume of new claims.
Usually, it takes about a week to process claims. The first full week of your claim is ordinarily unpaid. However, due to COVID-19, a growing number of states are waiving that unpaid waiting week. “It's getting more common day by day,” says Stettner. Check your state’s unemployment portal to see if the waiting week has been waived for you.
Some payments could be delayed due to the overload. “If you don't have a waiting week, they're supposed to get your payment within 14 days of when you first file,” Stettner says. “I would say, worst case scenario, 60% of people would still get their payments fast.”
How Much Unemployment Can You Receive?
To the surprise of absolutely no one, the amount you can receive weekly varies greatly by state, too. “Generally, the benefit rate is half of your weekly wage,” says Salk. “They look at your highest quarter of earnings.” So in most states, if you made much more during Q2 of last year (April through June), than in any other quarter, your rate would be calculated based on Q2 earnings.
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Salk says that New York state pays out a relatively low rate, capped at $504 a week. This is the maximum — not what most claimants will receive — and given the high cost of living in places like NYC, claiming unemployment may not be enough to stay afloat. In New Jersey, the weekly cap is $713. In Massachusetts, the weekly cap is currently $823, with extra allowances if you have dependents.
How Long Can You Receive Unemployment?
Most states pay 26 weeks of unemployment benefits. “But there are 10 states that cut their benefits below 26 weeks, which is what has always been the case for the last 60, 70 years,” says Stettner. “There are states that, after the last recession, were so worried about the money in their state fund that they cut back on benefits.” Those states are Arkansas, Alabama, Michigan, South Carolina, North Carolina, Missouri, Florida, Georgia, Kansas, and Idaho. Currently, Florida and North Carolina provide only up to 12 weeks of unemployment.
Stettner notes that states offering longer unemployment benefits tend to be colder ones, where people in certain seasonal industries may struggle to find jobs during long winters. “Minnesota, Washington, Massachusetts, Alaska have always kept good unemployment benefits, because they knew they needed them,” he says.
Will States Improve Benefits During the Coronavirus?
Major changes to state and federal unemployment benefits have been authorized before in extraordinary times. In 2009, the federal government extended benefits to be paid out up to 99 weeks. Changes like these would require legislation to be passed, says Salk.
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But there are some measures that states could adopt right now. “Waiving the waiting week would really help as an emergency measure,” says Stettner. “Clarifying the rules so that individuals who are not able to work because of the coronavirus situation, who may not meet the standard UI rules so easily — those rules should be adjusted.”
He also believes there needs to be a massive increase in benefit rates. “The average benefit is just 45% of your paycheck,” he says. “And that's one thing when you could have a chance of finding another job — it’s a whole other thing when there's no way you can get any kind of work. We think that they should increase the replacement rate to at least 75% of your wages, or maybe even all the way up to 100% of your wages, at least for a few months,” he says. “And we think the benefits need to be longer.”
Salk adds that the issue of misclassified workers could be addressed right now by individual states, if they streamline the process of filing a claim and allowed workers like Uber drivers to provide their own calculation of earnings right on the application. “It was already difficult two weeks ago for these folks, before the crisis hit. Now, for practical purposes, I don't see how it's going to happen if they're going to probably be waiting a year.”
Have unemployment offices weathered such hardships before? “I think this is worse than the recession,” says Stettner. He observes that the outbreak is more like a disaster than a recession, recalling the extremely high numbers of unemployment claims after Hurricane Katrina and 9/11. “But those were only in one state at a time,” he says. “So this is truly unprecedented.”
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