Millions of people lost unemployment benefits in the event of a pandemic on Labor Day. Now what?

Federal funding for extended unemployment benefits has officially expired.

Sarah Tew / CNET

For the latest news and information on the coronavirus pandemic, visit the WHO and CDC websites.

On Labor Day, the expanded COVID-era unemployment benefit programs expired. These temporary programs included weekly $ 300 bonus checks as well as coverage for those not normally eligible for UI, such as concert workers and the long-term unemployed. More than 11 million people were affected by the cutoff and around 7.5 million people lost their benefits entirely.

Millions of people had already lost their federal aid over the summer when about two dozen states prematurely ended emergency programs. Governors claimed that the additional unemployment insurance dissuaded residents from taking available jobs. Unemployed residents in a dozen states have taken legal action to try to restore their benefits, arguing that without the help they were unable to pay basic expenses, including rent and food.

Meanwhile, various studies have noted that the key element holding back the labor market recovery was not unemployment insurance, but people with coronavirus-related safety concerns as well as households struggling with family responsibilities. Although it is still the COVID era, especially with the rise in delta-variant In this case, the White House does not plan to extend these benefits again.

So who lost all coverage? What will happen to those who need unemployment coverage to make ends meet? We will explain it to you below. You may also want to know more about the IRS which issues refunds to those who have been taxed on their 2020 unemployment benefits. And here’s an important primer on the improved 2021 child tax credit, which gives millions of families extra money before next year’s taxes.

Which unemployment programs expired on Labor Day?

At the very start of the pandemic, the CARES law of March 2020 established temporary federal unemployment assistance programs to help those who have lost their jobs due to COVID. The March 2021 US bailout extended emergency programs until Labor Day this year.

The first program was Federal Pandemic Unemployment Compensation, the weekly bonus – $ 600 per week at the start, then $ 300 per week – which helped unemployed Americans top up their benefits and recoup some lost wages. Another was the Emergency Pandemic Unemployment Compensation, or PEUC, which extended assistance to those who had already exhausted their state’s benefit period (typically 26 weeks). The other was Pandemic Unemployment Assistance, or PUA, which covered self-employed workers and freelancers who were generally not eligible for assistance.

A subsequent stimulus package created another program called Mixed Earners Unemployment Compensation, which offered an additional $ 100 per week to workers whose work was split between an employee and an independent contractor.

How many people lost benefits on Labor Day?

In addition to the millions of workers in states that prematurely halted federal unemployment assistance, more than 3 million additional people who were receiving the $ 300 weekly bonus lost it on Labor Day. If they are still eligible to receive state unemployment insurance (that is, if they have not yet exhausted the maximum duration of coverage), they will continue to receive compensation. But that compensation will revert to pre-pandemic benefit levels, which is a much lower amount.

In addition, about 7.5 million people were cut entirely when the temporary pandemic unemployment programs expired, considered the highest threshold for unemployment benefits in U.S. history. Here’s how it breaks down, according to a detailed analysis of Department of Labor data by the Century Foundation.

  • 3.3 million people covered by PEUC: This category includes workers who would no longer have been eligible for unemployment because they were outside their state’s benefit window (most allow for 26 weeks, some granting as little as 12 weeks and others as long as 30 weeks). ). The program provided up to 53 weeks of additional assistance for those who exceeded state allowances.
  • 4.2 million people covered by PUA: This category includes workers who are not normally eligible for any form of federal or state unemployment compensation, including freelancers, concert workers, independent contractors, and part-time workers. During the pandemic, the program also supported those who could not work because they were caring for a dependent.

This is not the complete picture of all those affected by unemployment. Reported unemployment rates generally do not take into account those who have left the labor market completely and are no longer counted as looking for work, such as the long-term unemployed.

The most disadvantaged are workers in frontline industries, especially black workers – whose current unemployment rate is around 10%. Additionally, women have been particularly hard hit (PDF) by COVID-related job losses, and were heavily responsible for caring for children or family members during the pandemic.


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Why were benefits cut early in so many states?

Citing labor shortages in the spring, 26 state governors claimed that unemployment benefits linked to the pandemic produced limited incentives for workers to take jobs. Many economists and analysts disagreed, highlighting several factors that prevent people from finding decent work, including low wages, lack of health care, inadequate child care and fear of contracting COVID. -19.

With unemployment claims still fluctuating as the economy struggles to return to pre-pandemic “normalcy”, reports show that the premature cancellation of federal programs has had little impact on labor markets. A recent JP Morgan Chase Institute (PDF) study confirmed that states that ended supplemental unemployment insurance programs over the summer had a limited impact on job growth.

According to an August report by Andrew Stettner of the Century Foundation, “politics, not economics, drove the attack on UI.” The states that removed the Enhanced Benefits before the federal expiration were mostly Republican-led.

Arkansas, Indiana and Maryland were to phase out benefits early, but successful lawsuits forced those states to preserve federal coverage, at least temporarily. In rendering their decisions, the judges noted that the end of benefits made it more difficult for the unemployed to meet basic needs. Lawsuits have also been filed against state governors elsewhere, which have been dismissed by judges or are still stuck in court.

Some states and employers have started offering financial incentives to individuals to find work. Since each state has different requirements, check if there are any signing bonuses where you live.

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As the economy continues to recover, the end of pandemic unemployment may look like a trap for millions of people with no income.

Sarah Tew / CNET

Could pandemic benefits possibly be extended?

White House officials have made it clear they have no plans to keep the improved unemployment benefits beyond the Labor Day deadline, saying they are intended to be temporary. When states began withdrawing early from pandemic-era unemployment programs, labor ministry officials said their hands were tied and could not counter the decisions of governors.

Meanwhile, given the uncertainties surrounding COVID, new quarantine restrictions could be imposed, which could lead to more layoffs. President Joe Biden has passed the buck to the states, telling governors they can use the stimulus funds to help those battling unemployment.

According to an Aug. 19 letter from Department of Labor and Treasury officials, states can use $ 350 billion of pandemic funds that Congress allocated in the US bailout to continue paying the unemployed. The letter says that in areas where unemployment remains high, “it may be advisable for the unemployed to continue to receive additional assistance for a longer period”, which would enable these people to find employment.

It is not clear at this time which states will choose to use the remaining pandemic funds to continue unemployment benefits. Not all states have closed the door on maintaining certain benefits, according to a CBS News report, with some local officials examining options for providing assistance after Labor Day has expired.

Is it too late to apply for unemployment insurance?

If you have been made redundant or put on leave, you can apply for unemployment benefits in your state. After the state approves your request, you can apply to receive state benefits to which you are entitled. Because states cover 30% to 50% of a person’s salary, there isn’t a single sum you can expect on a national basis. Each state’s unemployment insurance office provides information for filing a claim with the program in the state where you worked. Some claims can be filed in person, over the phone, or online, so it’s best to contact your state office directly.

Eligibility criteria vary from state to state, but the general rule is that you should apply if you lost your job or were fired through no fault of your own, including if it was directly or indirectly due to the pandemic. You can check your state’s requirements here. In February, the Ministry of Labor updated its unemployment eligibility requirements to include people who refused to return to work due to dangerous coronavirus standards.

As for self-employed and freelance workers losing PUA coverage, some online groups are calling for extending pandemic unemployment programs during the crisis and offering more information.

We will continue to update this story as we receive more information.


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