Which States Are Opting Out of Federal Unemployment Benefits?

In recent weeks, many employers have complained about how difficult it is to fill job openings. The country is returning to normalcy, with COVID-19 cases drastically falling, yet some businesses can't get all their workers to come back. Maryland recently joined 24 other states in ending the $300 per week federal unemployment benefits in a bid to encourage people to return to the workforce.

The Federal Pandemic Unemployment Compensation (FPUC) program was established under the CARES Act back in March 2020. Subsequently, it has been extended, most recently through the American Rescue Plan Act (ARPA). Federal unemployment benefits are scheduled to expire on September 6, 2021.

States Withdrawing from Benefits

So far, the following states have opted to end the $300 per week benefits ahead of the expiration: Alabama, Alaska, Arizona, Arkansas, Florida, Georgia, Idaho, Indiana, Iowa, Mississippi, Missouri, Montana, Nebraska, New Hampshire, North Dakota, Ohio, Oklahoma, South Carolina, South Dakota, Tennessee, Texas, Utah, West Virginia, and Wyoming. Maryland, the latest state to join them, will opt out beginning July 3, 2021.

States Offering Return to Work Incentives

If the end of the FPUC benefits isn't enough to encourage people to return, an incentive might work. The lagging return is plaguing states nationwide and some states have responded by offering return-to-work bonuses through the unemployment program to entice workers. They are:

Montana. The state offers a one-time $1,200 bonus after completing four full weeks of paid employment. Click here to learn more.
New Hampshire. Full-time employees are eligible for a $1,000 bonus while part-time employees will receive a $500 bonus for returning to the workforce. Only employees who earn $25 per hour or less will qualify for the bonus. Here is an announcement.
Oklahoma. The state's return to work incentive offers a one-time $1,200 bonus to claimants that complete six consecutive weeks of 32 hours per week of employment. Click here to learn more.
Arizona. Workers can receive up to a $2,000 bonus for returning to work after working eight 40-hour weeks or a $1,000 bonus is available after working eight 20-hour weeks. To learn more, click here.
Connecticut. The Back to Work CT program offers a $1,000 bonus for workers who maintain employment for eight consecutive weeks. Here is a press release.
Colorado. The Colorado Jumpstart program will offer up to $1,600 to returning workers in two installments, the first after four weeks of employment. Employees must return to work between May 16 and June 26, 2021. Click here to learn more.

The North Carolina House of Representatives recently passed a bill to offer a $1,500 bonus, payable in two installments, for returning to work by June 1, 2021, and an $800 bonus for those who return to work by July 1, 2021. That bill continues on a path to approval. In New York, a state senator introduced a bill that would offer a $1,200 incentive for returning to work and remaining employed for four weeks.

"Reboarding" Returning Employees

As when you onboard new employees at your business, there are many considerations when reboarding employees who return.

New hire reporting of returning workforce. As vaccination levels continue to rise and states strategize various unemployment actions, more employers will begin to see their employees return to work. In most cases, if these workers haven't been on the payroll for at least 60 consecutive days, they're considered "rehired" and will need to be included in new hire reporting.

Paperwork. As employees return, employers should verify work authorization by checking Form I-9 documentation. Employers should check for expiring documents and request new work authorization documents and have each employee complete a new Form I-9.

While it's not required, it's also a good time to have the employee complete a new Form W-4.

States have a variety of required notices when an employee is hired. Check your state's requirements to see if these apply for your rehires.

Paid leave considerations. For employees with unused accrued paid leave, you'll need to consider whether those balances need to be reinstated. Also, some states and localities have COVID-19 paid leave laws in place and you will need to familiarize yourself with these now that your workers have returned.

Other considerations. There may be other factors to consider in your state. For example, California enacted a "Right to Recall" law. It establishes a statewide policy that requires certain employers to rehire workers laid-off by the pandemic. Employers in the hospitality and business services industries, including hotels, airports and large event centers are required to comply with the law's provisions. Click here to learn more.

Similar local ordinances, as well as non-compete clauses, may apply in your area when workers return. For example, the cities of Baltimore, Honolulu, Minneapolis, New Haven, New York, Philadelphia and Washington, D.C. have adopted regulations creating the right to recall furloughed or terminated employees.

Refusal to Work

Generally, all state unemployment laws will disqualify an individual from claiming unemployment benefits if they refuse suitable work. Being called back to work may fall under this disqualification category. However, it may depend on circumstances such as an employee's health condition or the employer's work conditions. Check with your state unemployment agency to determine whether the refusal is reportable. Consult with your human resources advisor or employment attorney for more information.

Mark Mirsky | 06/15/2021

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Which States Are Opting Out of Federal Unemployment Benefits?