COVID-19 struck the United States in March 2020, shutting down significant economic sectors. By April, 23 million Americans were out of work, the highest level of unemployment since the Great Depression. Black and Latino workers had the greatest unemployment rates. At the same time, women, particularly mothers of color, were disproportionately driven out of the labor force due to a lack of childcare and a shift to remote education.
As working people around the country cried out for help, Congress passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act. This is in addition to other legislation that considerably expanded eligibility for unemployment insurance (UI), raised benefit levels, and extended the maximum period of payments.
What Kind of Unemployment Assistance is Available?
Unemployment insurance (UI), often known as unemployment benefits, is a sort of state-provided insurance that pays out money on a weekly basis to people who lose their jobs and meet specific eligibility requirements. Those who quit their jobs or were fired for just cause are ineligible for UI benefits. In other words, someone who has lost their job owing to a lack of available labor and through no fault of their own is frequently eligible for unemployment benefits.
Despite being a federal law, each state manages its own unemployment insurance program. Workers must meet the job and wage standards of their state, including the time spent. The benefits are generally given out by state governments and are funded by payroll taxes collected specifically for that purpose.
During the coronavirus outbreak, the federal government put in place provisions to assist jobless Americans. These extra benefits became effective in March 2020, when President Donald Trump signed the Coronavirus Aid, Relief, and Economic Security (CARES) Act. They were extended with the enactment of the Consolidated Appropriations Act of 2021, and one more time on March 11, 2021, when President Joe Biden signed the $1.9 trillion American Rescue Plan Act of 2021. The extra advantages expired on September 6, 2021.
Understanding Unemployment Insurance (UI)
The unemployment program is a collaborative effort between state and federal governments. Unemployment insurance pays cash stipends to unemployed people who are actively looking for work. The Federal Unemployment Tax Act (FUTA) and state employment agencies provide compensation to qualifying unemployed workers.
Each state has an unemployment insurance program, but all states must comply with the federal criteria. Federal law makes UI benefits available across state lines. The program is under the administration and supervision of the United States Department of Labor in each state.
Workers who meet certain eligibility criteria may qualify for up to 26 weeks of benefits per year. The weekly cash stipend aims to replace, on average, a percentage of the employee’s usual salary. Employer taxes help fund unemployment insurance in most states. The majority of employers have to pay both the federal and state unemployment FUTA taxes. Companies with 501(c)3 status are exempt from FUTA tax.
Employee contributions to the state unemployment fund are also mandatory in three states; Alaska, New Jersey, and Pennsylvania. Reportable income includes freelance work and jobs for which unemployed people were paid in cash.
Out-of-work individuals who have not found work after a 26-week period may be eligible for an extended benefits program. Unemployed workers who receive extended benefits enjoy an additional number of weeks of unemployment benefits. The availability of extended benefits is determined by the overall unemployment situation in every state. If you have lost your job owing to the coronavirus pandemic, please review the list of available programs below.
What Do I Need to Qualify for Unemployment Insurance?
To be eligible for unemployment insurance benefits, a jobless person must meet two fundamental requirements. Unemployed people must meet state-mandated minimums for either earned wages or time worked in a certain base period. The state must also decide that the eligible person lost his/her job due to circumstances beyond their control. When you meet these two requirements, you may file for unemployment insurance.
People file claims in the state where they have worked. A participant may file a claim by phone or on the website of the state unemployment insurance office. It usually takes two to three weeks to process and approve a claim after the first application.
Following claim approval, the participant must submit either weekly or biweekly reports that test or validate their work condition. You have to submit your reports regularly in order to continue receiving benefits. An unemployed worker cannot decline work throughout the week, and they must record any income they gain from freelance or consulting gigs on each weekly or biweekly claim.
How Do I Apply?
To get unemployment benefits, you must file a claim with the state unemployment insurance program where you worked. You can file your claim in person, by phone, or online, depending on the state. Immediately after losing your job, you should contact your state’s unemployment insurance program as soon as possible.
In most cases, you should file your claim with the state in which you worked. If you worked in a state other than the one where you now live, or if you worked in multiple states, the state unemployment insurance agency where you now live can help you make a claim with the other states.
When you file a claim, you will need to provide information such as your previous employer’s address and dates of work. To avoid having your claim delayed, provide comprehensive and accurate information. Your first benefit check will usually arrive two to three weeks after you make your claim.
The Special Considerations of the COVID-19 Time
The World Health Organization (WHO) declared COVID-19 a pandemic on March 11, 2020. States and businesses across the United States shut down, resulting in huge unemployment.
Lawmakers agreed to adopt the CARES Act, a major piece of legislation that increased states’ capacity to offer UI to millions of workers affected by COVID-19, including those who are not normally eligible for unemployment benefits. In March 2020, the bill was enacted and signed into law.
Three different programs were created to assist Americans who were unable to work due to the coronavirus:
- Federal Pandemic Unemployment Compensation (FPUC)
- Pandemic Unemployment Assistance (PUA)
- Pandemic Emergency Unemployment Compensation (PEUC)
President Trump launched a fourth program in response to the expiration of the Federal Pandemic Employment Compensation program on August 8, 2020.
How Effective is the UI?
Unemployment insurance is an effective anti-poverty strategy that boosts household well-being, especially during the pandemic. During the COVID-19 unemployment crisis, roughly one in every six U.S. adults (around 40 million people) obtained unemployment insurance payments. Access to unemployment insurance, according to the Census Bureau, reduced the official poverty rate from 12.9% to 11.4%, preventing 4.7 million people, including 1.4 million children, from slipping into poverty in 2020.
Aside from alleviating poverty, unemployment benefits reduced hardship and generally increased household well-being, including recipients’ financial stability and mental health. The Bureau of Labor Statistics (BLS) compared households that received unemployment benefits at some point during the COVID-19 crisis to households where a worker applied for but did not get benefits. According to the BLS, effective unemployment benefit receivers were substantially less likely to experience food insecurity, struggle with household expenses, fall behind on their mortgage or rent, or exhibit symptoms of anxiety or stress.
Examining what happens when benefits are no longer available is one way to assess the positive impact of expanded unemployment benefits. According to a recent study of real-time anonymous banking data in states that cut off extended unemployment benefits early, household spending declined by 52 cents for every $1 cut in benefits.
Impact on State and Local Economies
The Families First Coronavirus Response Act and the CARES Act expanded unemployment insurance payments, sending $664.9 billion in government funds to unemployed workers and families by October 2021. These well-targeted federal resources supported the struggling state and local economies, where they increased consumer spending and helped local firms, preventing more layoffs.
Workers’ Compensation for Illness or Injury on the Job
Workers’ compensation regulations protect employees who are injured or become ill while doing their job. These laws establish a type of insurance that businesses must pay for. These laws differ by state and for federal personnel. Workers’ compensation, in general, provides:
- Medical insurance for employees
- Compensation for missing wages while a worker is recovering
- Benefits for dependents of workers who died as a result of workplace dangers
Eligibility Requirements
Workers’ compensation benefits typically include four main eligibility requirements:
- You must be a worker.
- The company you work for needs to have workers’ compensation insurance.
- Your illness or injury must be work-related.
- You must disclose the injury and file a workers’ compensation claim by the dates that your state sets.
Specific groups like domestic workers, agricultural and farm workers, casual or seasonal workers, and workers hired through temp agencies may follow other special rules.
Other Options for People Dealing with Unemployment
Aside from applying for the benefits, here are some other options to consider:
-
Find a Temporary Job
Finding temporary work or working with a temp agency is one of the simplest ways to bridge the gap between jobs. While many unemployed people actively seek employment, keep in mind to include temp agencies in your mind. While this is not a permanent solution, it will put you in a better financial situation while you look for something more permanent.
-
Work Online
Online work is another excellent option if you are currently jobless. Many different sites offer various ways to make money online, just make sure the site you work for is trustworthy. Fiverr and Upwork, as well as companies that pay you to complete surveys, are all quick and viable possibilities. While these sites may occasionally offer lower money, it is always better to progress slowly rather than not at all.
-
Volunteer
When you are unemployed, volunteering is a great way to fill your time. Furthermore, if you volunteer in a field linked to your employment requirements, you can typically include the experience on your resume. Not only that, but also doing good is a great mood booster and can help you stay positive while hunting for your next job.
-
Improve Your Skills
Looking for ways to improve your job abilities while waiting for a job is also a fantastic strategy to develop. Look for certificates or training programs that are available for free. Extra training in your field might help you qualify for more roles, and many towns or states offer job skills training. Refreshing your resume, as well as your interview and job abilities, may make your job search easier.
-
Start Selling Your Old Stuff
Selling unused possessions is another smart option to bridge the gap between jobs. Although eBay and Amazon are both safe sites, traditional garage sales are also an option. Sell a few video games or electronics for some fast cash while you figure out a long-term solution.
Bottom Line
Today’s times are difficult regardless of your background. While the world’s uneven economy has made it extremely difficult for many people to obtain jobs, the current COVID outbreak has complicated the problem.
At some point, unemployment has impacted almost all of us in recent years, regardless of age or qualification. While we cannot control the fact that we have no job, we can control how we react to it. Despite challenging circumstances, there are numerous ways to grow and remain hopeful.
Whether you are seeking a job or simply need a break between assignments, you should consider applying for unemployment insurance benefits. It has been of great help to millions of people across the country.
