Senate Finance Committee Hearing — Unemployment Insurance During COVID–19, S. HRG. 116–494
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S. HRG. 116–494, the printed record of a hearing before the Committee on Finance of the United States Senate, One Hundred Sixteenth Congress, Second Session, on June 9, 2020, titled Unemployment Insurance During COVID–19: The CARES Act and the Role of Unemployment Insurance During the Pandemic. The record states that the WebEx hearing was convened at 2:34 p.m. with Hon. Chuck Grassley presiding. The contents list opening statements by Grassley and Wyden, the administration witness Hon. Eugene Scalia, Secretary, Department of Labor, and additional witnesses Scott B. Sanders, Beth Townsend, Les Neilly and Michele Evermore, followed by prepared statements, responses to questions from committee members and communications from organizations.
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“Senate Finance Committee Hearing — Unemployment Insurance During COVID–19, S. HRG. 116–494.”
Original at www.govinfo.gov. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/unemployment-insurance-during-covid-19-the-cares-act-and-the-role-of-ui-during-the-pandemic/
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S. HRG. 116–494
UNEMPLOYMENT INSURANCE DURING
COVID–19: THE CARES ACT
AND THE ROLE OF UNEMPLOYMENT
INSURANCE DURING THE PANDEMIC
HEARING
BEFORE THE
COMMITTEE ON FINANCE
UNITED STATES SENATE
ONE HUNDRED SIXTEENTH CONGRESS
SECOND SESSION
JUNE 9, 2020
(
Printed for the use of the Committee on Finance
U.S. GOVERNMENT PUBLISHING OFFICE
45– 808—PDF WASHINGTON : 2021
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COMMITTEE ON FINANCE
CHUCK GRASSLEY, Iowa, Chairman
MIKE CRAPO, Idaho RON WYDEN, Oregon
PAT ROBERTS, Kansas DEBBIE STABENOW, Michigan
MICHAEL B. ENZI, Wyoming MARIA CANTWELL, Washington
JOHN CORNYN, Texas ROBERT MENENDEZ, New Jersey
JOHN THUNE, South Dakota THOMAS R. CARPER, Delaware
RICHARD BURR, North Carolina BENJAMIN L. CARDIN, Maryland
ROB PORTMAN, Ohio SHERROD BROWN, Ohio
PATRICK J. TOOMEY, Pennsylvania MICHAEL F. BENNET, Colorado
TIM SCOTT, South Carolina ROBERT P. CASEY, JR., Pennsylvania
BILL CASSIDY, Louisiana MARK R. WARNER, Virginia
JAMES LANKFORD, Oklahoma SHELDON WHITEHOUSE, Rhode Island
STEVE DAINES, Montana MAGGIE HASSAN, New Hampshire
TODD YOUNG, Indiana CATHERINE CORTEZ MASTO, Nevada
BEN SASSE, Nebraska
KOLAN DAVIS, Staff Director and Chief Counsel
JOSHUA SHEINKMAN, Democratic Staff Director
(II)
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CONTENTS
OPENING STATEMENTS
Page
Grassley, Hon. Chuck, a U.S. Senator from Iowa, chairman, Committee on
Finance .................................................................................................................. 1
Wyden, Hon. Ron, a U.S. Senator from Oregon .................................................... 4
ADMINISTRATION WITNESS
Scalia, Hon. Eugene, Secretary, Department of Labor, Washington, DC ........... 7
ADDITIONAL WITNESSES
Sanders, Scott B., executive director, National Association of State Workforce
Agencies, Washington, DC .................................................................................. 48
Townsend, Beth, Director, Iowa Workforce Development, Des Moines, IA ........ 50
Rodrı́guez, José Javier, State Senator, Florida Senate, Miami, FL .................... 52
Neilly, Les, president, Neilly Canvas Goods Company, Pittsburgh, PA ............. 54
Evermore, Michele, senior researcher and policy analyst, National Employ-
ment Law Project, Washington, DC ................................................................... 55
ALPHABETICAL LISTING AND APPENDIX MATERIAL
Evermore, Michele:
Testimony .......................................................................................................... 55
Prepared statement .......................................................................................... 67
Responses to questions from committee members ......................................... 86
Grassley, Hon. Chuck:
Opening statement ........................................................................................... 1
Prepared statement with attachment ............................................................. 88
Neilly, Les:
Testimony .......................................................................................................... 54
Prepared statement .......................................................................................... 94
Responses to questions from committee members ......................................... 96
Rodrı́guez, José Javier:
Testimony .......................................................................................................... 52
Prepared statement .......................................................................................... 97
Sanders, Scott B.:
Testimony .......................................................................................................... 48
Prepared statement .......................................................................................... 99
Responses to questions from committee members ......................................... 103
Scalia, Hon. Eugene:
Testimony .......................................................................................................... 7
Prepared statement .......................................................................................... 107
Responses to questions from committee members ......................................... 113
Townsend, Beth:
Testimony .......................................................................................................... 50
Prepared statement .......................................................................................... 147
Responses to questions from committee members ......................................... 153
Wyden, Hon. Ron:
Opening statement ........................................................................................... 4
Prepared statement .......................................................................................... 156
(III)
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IV
Page
COMMUNICATIONS
American Federation of Labor and Congress of Industrial Organizations
(AFL–CIO) ............................................................................................................ 159
Center for Fiscal Equity .......................................................................................... 160
Center for Public Justice ......................................................................................... 162
Consortium for Citizens with Disabilities ............................................................. 166
Data Coalition .......................................................................................................... 167
Dukat, Kelley ........................................................................................................... 168
Dumas, Terry ........................................................................................................... 173
Greater Boston Legal Services ............................................................................... 174
Hermes, Ben ............................................................................................................. 177
Iowa Coalition Against Sexual Assault .................................................................. 180
Leadership Conference on Civil and Human Rights ............................................ 181
Legal Aid at Work ................................................................................................... 184
Lutheran Services in America ................................................................................ 186
Philadelphia Unemployment Project ...................................................................... 187
Phillips, Michelle ..................................................................................................... 188
Rogers, Robin ........................................................................................................... 189
Salés, Cheyenne ....................................................................................................... 190
Texas Council on Family Violence ......................................................................... 191
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UNEMPLOYMENT INSURANCE DURING
COVID–19: THE CARES ACT
AND THE ROLE OF UNEMPLOYMENT
INSURANCE DURING THE PANDEMIC
TUESDAY, JUNE 9, 2020
U.S. SENATE,
COMMITTEE ON FINANCE,
Washington, DC.
The WebEx hearing was convened, pursuant to notice, at 2:34
p.m., in Room SD–106, Dirksen Senate Office Building, Hon. Chuck
Grassley (chairman of the committee) presiding.
Present: Senators Enzi, Cornyn, Thune, Portman, Toomey, Cas-
sidy, Young, Wyden, Stabenow, Cantwell, Menendez, Carper, Car-
din, Brown, Bennet, Casey, Warner, Hassan, and Cortez Masto.
Also present: Republican staff: Kolan Davis, Staff Director and
Chief Counsel; Ryan Martin, Senior Human Services Advisor; and
Jeffrey Wrase, Deputy Staff Director and Chief Economist. Demo-
cratic staff: Rachael Kauss, Tax Policy Analyst; and Joshua
Sheinkman, Staff Director.
OPENING STATEMENT OF HON. CHUCK GRASSLEY, A U.S.
SENATOR FROM IOWA, CHAIRMAN, COMMITTEE ON FINANCE
The CHAIRMAN. Welcome to everybody to our hearing, both those
who are in the room and those who are not in the room.
Before we start, I think it is important again to note what is
going on all around us, and that is the acknowledgment of racial
injustice that has gone on for far too long in our country. I cer-
tainly support those who are speaking out and making their voices
heard in a peaceful manner to bring about change.
While change does not always come easily, I want to remind
those watching this hearing today that change is possible. In De-
cember of 2018, the First Step Act, which I introduced, became law.
And I worked in partnership with several Republican and Demo-
crat Senators. Senator Durbin was the lead person for the Demo-
crats. This law is the most significant criminal justice reform in a
generation. A lot of people did not think it was possible, but we did
it by working together in a bipartisan way.
We are also working together in other ways to address racial dis-
parities such as in health care. The CARES Act and other COVID
response efforts aim to help all, but especially minority populations
that have been hit hardest by the virus. We have knocked down fi-
nancial barriers to receiving care through the pandemic and pro-
vided support to our frontline providers to ensure access.
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2
We continue to focus attention on the devastating effect that
COVID has had on nursing homes and the need to do better for
resident staffs. The Trump administration has announced a num-
ber of efforts to address the disparate impact of COVID–19 on Afri-
can Americans and others, and I ask at this point unanimous con-
sent to insert a document along those lines in regard to those ef-
forts.
I hear no objection, so it is so ordered.
[The document appears in the appendix beginning on p. 90.]
The CHAIRMAN. We are also taking action beyond COVID. We are
working on a bipartisan effort to tackle this tragic issue of mater-
nal mortality and the need to improve outcomes for mothers and
babies.
All Americans want lower prescription drug costs, but our efforts
are especially important as minorities suffer from the high rate of
common diseases such as diabetes and hypertension. We are ex-
ploring improvement for those with kidney disease, patients in
need of organ transplants, and more beyond that.
We are also in the middle of a transformation of our child wel-
fare system. We know that too many children end up in foster care
and that black children are over-represented in this system. And
thanks to our bipartisan efforts, States are now transforming the
way that they operate to keep more kids safely at home instead of
placing them in foster care.
There is obviously much more to be done, and I look forward to
working with my colleagues on both sides of the aisle to continue
those efforts.
Now I would like to shift my remarks to focus on the topic of our
hearing. As a result of COVID–19 and related stay-at-home orders,
millions of Americans across the country have lost work. Congress
passed the CARES Act to provide help to those affected in many
different ways, including by temporarily expanding unemployment
insurance. These increased UI benefits have played an important
role in helping those who lost their jobs or who could not work as
a result of the pandemic. Given the need to act quickly to reduce
the spread of COVID–19, providing extra help through the unem-
ployment system made sense as a way to reduce the economic im-
pact of stay-at-home orders. But now we are facing a much dif-
ferent situation than we were in mid-March.
States are reopening. Employment recently turned positive. We
need to shift our focus to helping people safely return to work,
making sure businesses are able to come back quickly, and to put
the country back on a path of economic growth.
We have also learned a few things since the CARES Act became
law. The CARES Act provides an additional $600 per week for
those receiving UI, representing the gap between the U.S. weekly
wage and the average weekly UI benefit. One thing we have
learned is how poorly targeted the additional $600 per week was,
as it appears most recipients are being paid more on the unemploy-
ment insurance than they were when working. This of course dis-
courages people from returning to work or taking a new job, thus
delaying the recovery.
Recent research published by the University of Chicago estimates
more than two-thirds of the UI recipients may receive benefits that
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3
exceed lost earnings, with more than 20 percent potentially getting
double what they used to earn as long as they do not work. Some
will say this is just an academic paper and that these extra pay-
ments are not really an issue of today. Those folks saying that have
not been reading the many letters that I get from Iowans each day.
And I am sure every member of the committee is hearing the same
thing from businesses having a hard time bringing people back to
work or from hardworking constituents earning less than others
they know who are getting unemployment.
Let me share a few stories from letters I have received. Letter
number one: ‘‘My daughter went back to work voluntarily because
she wanted to help ensure the company would still be around after
COVID–19. Many of her co-workers chose to stay at home and, due
to the 600 extra dollars per week, are making more than she is.
This isn’t right.’’
Now letter number two: ‘‘Senator Grassley, I am a small business
owner who is in desperate need for additional employees, yet I re-
ceive very few applications when I post jobs. The issue is the addi-
tional unemployment. With the additional $600 per week, my po-
tential employees make more on unemployment than they would
working.’’
Letter number three: ‘‘We are trying to hire back laid-off
COVID–19-related employees, or anyone else as well, for $15 an
hour. And we find that they are receiving the equivalent of $20 an
hour in unemployment benefits. Suddenly, the government became
our competitor.’’ The question to me, then, from this constituent:
‘‘How could that happen?’’
These letters represent a small sample of those who write in
daily with concerns about the unemployment payment of $600
extra on top of what the State gives. Based on these letters and
others I am sure we have all received, you would think everyone
would agree we need to find a better way to help those who have
lost income. But you would be wrong. Despite mounting evidence
of the problems these extra payments are causing, the House
passed a bill recently to extend them not just for a month or two,
but for another 6 months through January 2021.
Given this, I asked the Congressional Budget Office what impact
these additional payments might have if continued. Here is what
they said: ‘‘Roughly five of every six recipients would receive bene-
fits that exceeded the weekly amounts they could expect to earn
from work during those 6 months.’’ Continuing to quote, ‘‘Employ-
ment would probably be lower in the second half of 2020 than it
would be if the increase was not extended. In the calendar year
2021, employment would be lower than it would be without exten-
sion.’’
That does not sound like a recipe for economic growth, especially
given last week’s jobs report, which shows people are returning to
their jobs and that millions more expect to return soon. I know ev-
eryone is focused on these extra $600 checks, but let me remind ev-
eryone of the other CARES Act policies—policies that continue past
July.
First, the CARES Act allows those out of work as a direct result
of COVID–19 to get UI benefits through December. This includes
people who are infected or caring for someone infected, those who
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4
cannot go to work because their workplace is closed due to COVID–
19, and those who rely on day care that is not available as a result
of the pandemic.
Second, individuals get an additional 12 weeks of unemployment
if they are still unemployed after State benefits run out. And in
States where unemployment rates remain high, further weeks of
benefits will also be available.
And most importantly, the CARES Act provides funding for what
are called ‘‘work sharing’’ programs. Under these programs, instead
of laying off employees, businesses would reduce hours and pay em-
ployees a partial UI check to offset lost income. States can also use
it to bring back workers on a part-time basis if they cannot fully
reopen for a while.
And do not forget, UI is not the only game in town. The CARES
Act includes many policies to help those affected by the pandemic,
including the employee retention tax credit, the Paycheck Protec-
tion Program, direct payments to individuals, and other policies de-
signed to help businesses reopen and people return to work.
The UI system will continue to play a very important role in ad-
dressing the impacts of the pandemic. However, our efforts must be
coordinated to help workers and businesses in a way that is most
productive. I look forward to hearing from our witnesses today to
learn what has worked, what has not, and discuss how we can
make sure our efforts in Congress can best support a strong eco-
nomic recovery at the same time we are trying to help people who
are hurting.
Now I call on Ranking Member Wyden. Thank you for being
here.
[The prepared statement of Chairman Grassley appears in the
appendix.]
OPENING STATEMENT OF HON. RON WYDEN,
A U.S. SENATOR FROM OREGON
Senator WYDEN. Thank you, Mr. Chairman, and thank you for
holding this hearing.
There is a lot to discuss today, and I would like to start with Fri-
day’s jobs report. The President celebrated like it was the greatest
victory in America since the end of World War II. And I want to
start by trying to give this a little bit of perspective.
Speaking conservatively, more than 20 million Americans are
still out of work today. And my guess is, they are not doing a whole
lot of celebrating if they are among the many people who do not
know how they are going to pay rent or put food on the table this
month. Watching the President celebrate in the midst of this jobs
crisis is yet another sign that Donald Trump just does not under-
stand what it is like for people born without a real estate portfolio.
First, I want to walk through how the Senate got here, starting
in March. The pandemic hit. The economy went into lockdown, and
unemployment shot into the stratosphere. So when the CARES Act
negotiations began, Democrats made our bottom line an expansion
to unemployment benefits that would bring more workers into the
system and fully replace people’s lost wages. Throughout the nego-
tiations—and they went on for days—Secretary Scalia said that
could not be done because the States run unemployment programs
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5
on Bronze Age technology that cannot crunch the numbers for indi-
vidual workers. Senate Democrats said that doing nothing is just
unacceptable when you have this hurt from sea to shining sea.
When Secretary Scalia failed to offer a plan to get benefits out
in a timely way, Democrats proposed a flat-sum solution: $600 per
week across the board on top of traditional benefits, adding up to
full-wage replacement for the typical worker.
So let us fast-forward now to this afternoon. The pandemic is
still killing thousands of Americans each week. The nearly 2 mil-
lion new unemployment claims filed last week tripled the highest
number of claims made in any week during the Great Recession.
It is a national scandal that African Americans are not only
dying of COVID–19 at much higher rates, they are also suffering
vastly more economic pain than virtually anybody else. Black un-
employment is disproportionately high. And because black people
have systematically been excluded from opportunity and wealth in
America, it is a lot less likely that they have the financial resources
to weather the storm. For the President to say the recovery has ar-
rived and everything is turning into sunshine, is just going to per-
petuate the economic injustice.
The bottom line is, the crisis is going to go on a lot longer if the
Trump administration and Senate Republicans start yanking out
these key pillars of economic support like supercharged unemploy-
ment benefits, much of which go to the lowest-paid folks in the
workforce. Main Street businesses nationwide, so many of them
hang on by a thread. Workers could lose their homes and fall
through the cracks if the Senate is not in their corner. So, like the
chairman, I want to respond to a few arguments that I heard com-
ing from the other side, arguments against supercharged unem-
ployment benefits. First is the idea that Americans who have lost
their jobs from the pandemic are plenty happy to just sit around
instead of going back to work. In my view, that is dead wrong, and
it’s an insult to American workers.
It is also a misunderstanding of how the system functions. I have
been talking to out-of-work Oregonians throughout this crisis, and
what I hear overwhelmingly is that they want to work. They want
to work. They want to get back to their jobs. They believe deeply
in the dignity of work.
They want to earn their pay, support their families, and return
to their lives, lives they had before this pandemic. And most impor-
tantly, they know that the path to getting ahead in America is
moving up the economic ladder rather than being on unemploy-
ment. Second, members of this committee have said it is somewhat
unhealthy for people to get unemployment benefits during the cri-
sis. I sure think this is out of touch with the realities people are
facing in this crisis. These benefits are what are saving millions of
people from hunger and homelessness in the middle of a pandemic.
Forcing people back into a contagious workplace also further
spreads the virus that has killed 110,000 Americans and turned
nursing homes nationwide into scenes of tragedy. Third, I have
heard talk among Republican Senators of cutting the expanded
benefits, possibly just saying, let’s cut them in half. So I want col-
leagues to really get this one straight. Between the CARES Act and
the Fed lending program, big corporations are getting trillions of
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6
dollars in support to weather this crisis. And now Senate Repub-
licans are saying, we are just going to cut what the little guy gets,
maybe in half. The system is already rigged to favor the powerful
and the wealthy. Congress surely should not stack the deck any
longer. Our unemployment insurance system, created in the 1930s,
should have been modernized long ago to cover the gig workers, the
self-employed freelancers. Long ago, benefits should have been tied
to economic conditions on the ground.
I also believe Congress should examine whether a Federal ap-
proach for administering unemployment benefits could do a better
job than the quilt of 50 different State systems operating today.
Nobody predicted the volume of claims we are seeing. But whether
it is due to neglect or political sabotage, too many of these State
systems are failing the people who are desperate for help.
I am going to close with one final thought. American workers are
not to blame for the jobs crisis that the country faces today. By
now, everybody has seen images of cars stacked up for miles at
food bank distribution centers around the country. I gave out food
just recently at one of them.
Colleagues, they are modern-day bread lines. With so many peo-
ple out of work, America is on the precipice of an eviction tsunami,
particularly in the black community. Supercharging unemployment
benefits, fully replacing people’s lost wages, bringing gig workers
and freelancers into the system were the right things to do. And
I know that is not just the opinion of Democrats who got it done,
because right now the President absurdly is taking credit for the
expansion in misleading campaign ads on the airwaves right now.
It is also a fact that every Republican member of this committee
voted to strip the expanded benefits and slow down their distribu-
tion. And at least a few turned around and then sent out press re-
leases touting the expansion that they voted against.
Colleagues, that is some serious chutzpah. So the Senate now
has the choice. It is about fairness for the tens of millions out of
work. It is about fairness for African Americans, who are dispropor-
tionately suffering. It is about fairness to the blue-collar worker
who looks around and sees a whole lot more support going to a
bunch of multinational corporations than to hard-hit workers like
them who have done nothing wrong.
The only choice is to make an extension to supercharged unem-
ployment benefits, and to do it now.
Mr. Chairman, I look forward to our witnesses. And again, I
want to thank you for scheduling the hearing.
[The prepared statement of Senator Wyden appears in the ap-
pendix.]
The CHAIRMAN. Thank you, Senator Wyden.
Our first panel is one person, our Secretary of Labor, so I will
give a short introduction. Secretary Eugene Scalia was sworn in as
Secretary of Labor September 27th last year. He has served in a
number of high-level positions in and out of government prior to
his appointment.
He has served as Solicitor of Labor, the Department’s top legal
officer; also, as a Special Assistant to the Attorney General; and as
a partner at a law firm. The Labor Department plays a very cen-
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7
tral role in overseeing the new Federal programs intended to help
workers and their families respond to the virus pandemic.
Secretary Scalia, please proceed.
STATEMENT OF HON. EUGENE SCALIA, SECRETARY,
DEPARTMENT OF LABOR, WASHINGTON, DC
Secretary SCALIA. Chairman Grassley, Ranking Member Wyden,
and members of the committee, thank you for the invitation to tes-
tify today.
Last Friday, the Labor Department issued a very encouraging
jobs report: 2.5 million jobs were created in May, versus expecta-
tions that we would lose 7.5 million jobs. The unemployment rate
dropped nearly a point and a half, instead of rising 5 points as pro-
jected. Moreover, the survey period for that report ended in mid-
May. Since then, many, many more Americans have returned to
work. Our economy has turned the corner against the coronavirus.
All of us welcome that news, and we celebrate it, Ranking Member
Wyden, not because we think the job is done but because we know
the situation has begun to improve more robustly and earlier than
had been expected.
But we are also mindful that millions of Americans remain out
of work. In mid-May, unemployment was still at 13.3 percent. For-
tunately, in March President Trump and the Congress acted swiftly
to address the economic hardship of the virus.
The CARES Act, as we have heard, provided an additional $600
a week in unemployment benefits on top of those provided by the
States. By contrast, in the so-called Great Recession of 2008–2009,
the additional Federal payment was $25. The Act also extended
these benefits to independent contractors and the self-employed,
who ordinarily do not receive unemployment. And in the Families
First Coronavirus Response Act, FFCRA, President Trump and
Congress made a billion dollars available to States to help them ad-
minister their unemployment insurance programs.
Ranking Member Wyden, thank you for your letter last week ac-
knowledging that after these laws were passed the Labor Depart-
ment, quote, ‘‘took important steps to ensure these benefits were
made available to workers as expeditiously as possible,’’ end quote.
We disbursed the billion dollars in administrative funding to the
States within a day or two of each State certifying it had met the
criteria set by Congress. This enabled the States to hire more staff
and improve technology. We swiftly provided State guidelines on
implementing the CARES Act. Less than 10 days after CARES was
enacted, we had issued the essential guidance States needed to ad-
minister the programs. The first States began making payments
April 4th.
We have been in constant communication with the States, includ-
ing 14 different webinars for State personnel. I personally partici-
pated in two large briefings for State unemployment insurance di-
rectors and have spoken with more than 20 Governors.
Still, we know that too many Americans have waited too long to
receive unemployment benefits. State unemployment offices were
overwhelmed. Before this year, the highest number of unemploy-
ment claims filed in a week was 695,000. This spring, in 2 weeks
in a row we had weekly filings nearly 10 times that previous record
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8
high. We had 6.6 million 2 weeks in a row. On top of that, many
States have antiquated computer systems, as much as 40 years old.
I spoke to one Governor whose system was so arcane he had to
bring in computer programmers from Latvia.
Members of this committee will recall, when CARES was being
written, that I cautioned about the age of these State systems and
urged the Senate to use a different means, and I did identify dif-
ferent means, to pay unemployment during the crisis.
Fortunately, unemployment claims are now declining. States
have hired more staff. They have made enhancements to their com-
puter systems. They are reducing the backlogs of claims. And
Americans are returning to work.
Going forward, our department has these goals. First, continuing
to help States make prompt unemployment payments to workers
entitled to them. Second, ensuring program integrity. We are work-
ing with our Inspector General, other Federal agencies, and the
States to address fraud and the criminals preying on the system.
Third, we will work with States to help Americans transition back
to the job safely. The $600 benefit was an extraordinary measure
to help Americans who were shut out of the workplace in a closing
economy. As the economy reopens, I appreciate that members of
this committee do not want the CARES benefit to be a deterrent
to resuming work. The best thing for workers is work, not unem-
ployment.
Thank you again for this hearing on this important subject, and
I look forward to your questions today.
[The prepared statement of Secretary Scalia appears in the ap-
pendix.]
The CHAIRMAN. We will have 5-minute rounds for questions. I
will start, and then Senator Wyden, and then I will go down the
list and follow the usual course we do for our hearings, according
to first come, first served, unless you are at the table when the
gavel falls.
Mr. Secretary, based on all of our witnesses today, and a request
sent by Democrats to the Department of Labor Inspector General
yesterday, it seems that my Democratic colleagues plan to high-
light problems Florida has had in distributing UI benefits. But as
I remember when the CARES Act was being developed, you warned
States would have a difficult time dealing with the unprecedented
surge in applications for benefits, let alone implementing any new
programs on top of that.
Many of us warned State UI systems would have major prob-
lems, and unfortunately we were right. But it is not just Florida.
There is one other State where I heard—the State of Oregon—a
person running the program resigned because of troubles with the
program. That would be another State plagued with issues.
I will ask you if that is correct. But before you answer that, my
main question is, what is your department doing to help put States
on better footing going forward?
Secretary SCALIA. Well, Mr. Chairman, as I mentioned, there was
just an entirely unprecedented surge in claims during the months
of March and particularly in April. We have never seen anything
like it in our history. It came at a time when unemployment had
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been so low that the unemployment offices were shortly staffed,
and that added to the challenge, together with the technology.
We began working with the States even before CARES was
passed. In February we were starting to talk to States about ways
that they could be using unemployment systems to help get the
benefits out to people. When CARES was enacted, we moved very
quickly in a variety of ways. We issued 19 different guidance docu-
ments to make the requirements clear. We had the essential guid-
ance out to the States within 10 days of enactment. We, as I men-
tioned, had had a number of webinars. We had been essentially in
constant contact with the States.
We have also put them in touch with something called the U.S.
Digital Service, which is a tech group within the Executive Office
of the President. It ordinarily helps Federal agencies with tech-
nology problems, but we made that resource available to the States
as well as our own Chief Information Officer.
We provided them flexibilities to increase staffing as well, and
we also moved as quickly as we could to get the FFCRA funding
out, that billion dollars. Within a day or two of getting the informa-
tion from the States that they had satisfied the criteria, we got the
money out.
So it has been a subject of great, great focus, Mr. Chairman, but
we know that there still is work to be done.
The CHAIRMAN. I have one last question at this point. We have
seen in recent weeks that States are reopening businesses. People
are adapting to new guidelines about social distancing and mask
wearing. And these changes are allowing economic activity to re-
sume in many different ways.
You run an agency that gathers a variety of data points on jobs
and the economy. What are some of the things that you are seeing
in the data—and try to tell us good signs and troubling signs.
Secretary SCALIA. Well, Mr. Chairman, the most troubling sign
of course has just been how many Americans have had to file for
unemployment. It is much more than we saw, for example, in the
so-called Great Recession of 2008–2009. We recognize the hardship
that has meant for those people and for their families. That has
been the most troubling thing.
The good news we saw Friday: 2.5 million jobs created at a time
when we thought we had lost 71⁄2 million. That is what the experts
were forecasting, a 10-million job swing, but unemployment is
going down when people thought it was going to be going up.
And, Mr. Chairman, that was nearly a month ago, because, as
you know, that survey was taken in mid-May. We know that since
then, more States have reopened. People have been returning to
work across the country. And when I look at Friday’s jobs report,
I see very good news. For example, many in retail went back to
work. Many went back to work in leisure and hospitality.
But I see other areas where people have not yet gone back to
work, but we can be confident they will. One is health care. We lost
about 1.4 million health-care jobs, I believe, in April. We only put
about 300,000 back in May. Those jobs will come back.
So there still is important work to be done, but we are making
progress, and the programs in the CARES Act are helping.
The CHAIRMAN. Thank you, Mr. Secretary.
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Now, Senator Wyden.
Senator WYDEN. Mr. Chairman, thank you. It is going to be a
long day, and I will just say, Mr. Chairman and Secretary Scalia,
I have been puzzled to hear your simultaneous claims that workers
are going back to work and that the $600-a-week benefit is deter-
ring them from returning. Both these claims cannot be correct, in
my view, and we are going to want to examine them.
Now let me start this way, Secretary Scalia. Reopening the econ-
omy when it is safe is good for everybody’s situation. The experts
tell us, though, that if people choose to go back to work before it
is safe, the pandemic will last longer, more people will die, and the
economy will suffer.
Now I believe that most employers want to do the right thing
and keep their workers safe. But they cannot do it if they do not
get clear guidance on what makes a ‘‘safe’’ workplace in the COVID
era. The Department of Labor has failed completely on this issue.
The law is clear that a person cannot be kicked off of unemploy-
ment if they turn down a job because of unsuitable conditions or
health or safety risks. Enforcing these rules is crucial during a
pandemic.
On May 19th, along with more than 20 Senators, I sent you a
letter about this issue. I have yet to receive a response.
So, Mr. Secretary, let us see if we can get this off to a decent
start. Will you commit here and now that the Department of Labor
will provide safety-first guidance, in writing, to ensure that nobody
loses their unemployment insurance benefits because of risks to
their health or safety? That is a ‘‘yes’’ or ‘‘no’’ question.
Secretary SCALIA. Ranking Member Wyden, you mentioned clear
guidance. That has actually been one of the principal focuses of the
Labor Department. I know we are here to talk about unemploy-
ment insurance, but when it comes to health and safety in the
workplace, through OSHA we have been putting out extensive
guidance documents——
Senator WYDEN. My time is short, Mr. Secretary. A ‘‘yes’’ or ‘‘no’’
answer to the question with respect to the guidance that more than
20 Senators asked you about.
Secretary SCALIA. As I was saying, we have put out approxi-
mately 20 guidance documents on how to make the workplace safe
so that workers can return. That has been an area of great focus.
That clear guidance is what we are aiming to do.
In terms of the return to work that you asked for, that is to a
large extent a function of State law. We do not want workers com-
ing back to unsafe workplaces. That is why we have made such a
priority of explaining for them and for employers what is needed
to make them safe.
However, if it is safe, the workers should come back; we want
them to come back. And if they feel it is unsafe, it needs to be
something that is rooted in the facts, not just a generalized fear,
but that is a topic generally covered by State law. And the States
have——
Senator WYDEN. Well, we asked you about a Federal matter, and
nobody ought to be forced to choose between their health and their
income. And I believe States, employers, and workers deserve some
clear safety-first guidance on the issues more than 20 Senators
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asked you about. And if you are okay with taking away a lifeline,
sending people back to unsafe jobs in the middle of a pandemic, I
think that is wrong, and I think it is inhumane.
Now a couple of other issues, because time is short. Do States
have the capacity right now to implement 100-percent wage re-
placement on an individual basis? As you know, we talked at
length about this during the negotiations. You said they did not
have it. So now we are talking about what may have changed.
But we need to know: do States have the capacity now to imple-
ment 100-percent wage replacement on an individual basis?
Secretary SCALIA. Two points in response, Ranking Member
Wyden. First, just to be clear, we have never suggested that work-
ers should sacrifice health for returning to work. We oppose them
being put to that choice as well.
But second, as to the State systems, I would welcome the oppor-
tunity to talk to you about this further. You and I have had two
or three, really from my perspective——
Senator WYDEN. Well, Mr. Secretary, we need an answer on the
record today, because that was one of the big issues in the days
and days of negotiations we had. I made it clear that what I want-
ed was 100-percent wage replacement.
Secretary SCALIA. And, Senator, as I was saying, we had some
valuable conversations, from my perspective—I hope from yours.
And I look forward to the opportunity to discuss this with you fur-
ther. I think, actually, the States have made some progress and are
in a different place than they were before. So we can talk about
it further.
Senator WYDEN. But can they do it? Can they actually do wage
replacement on an individual basis now? That was why we had to
go to this rough justice kind of approach. And I think you are still
telling me that they do not have the capacity to implement 100-
percent wage replacement on an individual basis today. And so
that is still going to be a major issue.
Secretary SCALIA. Respectfully, sir, I did not say that. I said we
should talk about it.
Senator WYDEN. I asked you whether they had the capacity to do
it, and you would not answer the question. So I will look forward
to getting anything else you would like to offer.
So, Mr. Secretary, how many people are out of work today with-
out any benefits?
Secretary SCALIA. That data is very hard to track, for a couple
of different reasons. Ranking Member Wyden, as you know, the un-
employment data we put out last week, for example, was already
from 3 to 4 weeks ago. So we do not have an exact fix on the num-
ber of people——
Senator WYDEN. Well, what is a ballpark? You are the Secretary
of Labor. You are the guy in charge. How many people are out of
work without any benefits?
Secretary SCALIA. And if I could finish, the second piece of data
that we do not have is a precise count now of who has received the
benefits. We receive weekly reports from the States on that, but
again, those are two very fluid pieces of data. I would simply be
guessing if I tried to tell you as we sit here today compared to
where we were 3 to 4 weeks ago in the jobs report we put out, and
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then with State numbers that again are not current either. I would
just be guessing if I gave you a number. What we do know is that
Americans are returning to work in large numbers. That is very
good news. But we know there are backlogs in the numbers that
will need to be addressed.
Senator WYDEN. Well, let me tell you what we know for sure, Mr.
Secretary. What we know for sure is that more than 20 million peo-
ple are out of work now. And we know that about 2, 21⁄2 went back.
And those 20 million people are disproportionately found in those
sectors where the wages are really modest.
And I gather if you and others have your way, a lot of those folks
are going to face eviction, and they are going to face evictions in
a matter of weeks, and we are going to fight for something else,
which is to make unemployment benefits tied to economic condi-
tions. That relates to a marketplace. That is something that I think
we could be working on together.
Thank you, Mr. Chairman.
The CHAIRMAN. Senator Cornyn?
Senator CORNYN. Secretary Scalia, thank you for being here.
I thought we were unified as a Congress and as all Americans
to try to deal with this pandemic, both on a public health and an
economic front, but apparently that is not consistently the case.
Sometimes our bad habits come back as we descend into partisan
accusations and question people’s good motives.
But I would like to ask you just to remember with me what we
did in the CARES Act, which included this enhancement for unem-
ployment insurance. We were worried that not only were we in the
middle of a pandemic, but that people, through no fault of their
own as a result of mitigation efforts, would not get any money, any
pay, and so we decided to make a direct payment to them through
the Treasury Department—direct deposit.
The second front was to make sure that we expanded and ex-
tended unemployment insurance benefits that would be what I
would consider sort of a second tier of support for individuals who,
through no fault of their own, found themselves out of work.
The third thing we did was pass the Paycheck Protection Pro-
gram, and as of now we have appropriated $670 billion to incenti-
vize employers to maintain their employees on payroll.
And then the next thing we did is, through the Federal Reserve,
we appropriated money that they could then lend according to
Treasury Department rules under their Main Street New Loan Fa-
cility. This is a historic response to an unprecedented situation.
And I know the ranking member disagrees about the $600 en-
hancement, but there was an amendment that was voted on in the
United States Senate. People were worried about what you pointed
out, not wanting to disincentivize people from seeking work be-
cause they got paid more not to work. I agree with that concern.
We should never pay people not to work. We should try to help
them get back to work. But as I recall, the vote on the CARES Act
was unanimous in the United States Senate. So trying to suggest
that we did not support assistance through the unemployment in-
surance system to workers is false.
So I just want to make one comment too about the Texas Work-
force Commission. In my State, they are the folks who administer
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the unemployment insurance assistance. They experienced the kind
of things that you described earlier, a crush of applications, and
they have done the best they could. And they have added personnel
and resources in order to try to be more responsive.
But I wonder. If our goal is to try to fight this virus, and then
also at the same time to fight the economic fallout associated with
it, do you think there are better ways than incentivizing people not
to work by paying them more not to work than to work? Are there
better ways, in your opinion, to help people get back in the work-
force?
Secretary SCALIA. Well, Senator Cornyn, first, the CARES Act
really was, as you say, an extraordinary piece of bipartisan, vir-
tually unanimous, legislation. The programs that you have de-
scribed, I think, are part of the reason that workers are able to go
back to work now. They were kept in contact with their employers
through the Paycheck Protection Program.
They were given financial support through the unemployment in-
surance benefit, which was a very good benefit for a closing econ-
omy. Savings right now are at a nearly all-time high—and that is
because people have been kept in their homes, but it is also be-
cause of the benefits that were made available through the Treas-
ury Department and through the unemployment insurance pro-
gram.
Going forward, I think the single best thing for bringing workers
back to work will be taking the necessary steps to ensure the econ-
omy revives. Before there can be a job, there needs to be a thriving
business. The President delivered us an extraordinarily thriving
economy with record low unemployment, with wages that were ris-
ing, and rising more quickly for lower-wage workers, until the virus
struck.
So I think we need to keep those policies in mind as we look to
bring people back to work, to keep our economic base strong. And
I know that there has also been interest—I see Senator Portman
eyeing me intently. There has also been interest in possibly pro-
viding a bonus that might further incentivize people to come back
to work, and that is something else that has been discussed as an-
other way to get people back to work, which is always our first
preference over unemployment, when we can provide it.
The CHAIRMAN. Now by television, Senator Stabenow.
Senator STABENOW. Thank you very much, Mr. Chairman and
Secretary Scalia. Thank you for being here for this very important
discussion we are having.
I do want to stress at the beginning, Mr. Chairman, that cer-
tainly the pandemic is not over. The crisis for families, the chal-
lenges for small businesses, certainly are not over. And this I hope
is going to mean that we are going to have additional action on the
floor of the United States Senate throughout the continuing needs
of Americans.
I also want to add to what Ranking Member Wyden said about
the discrepancy on the one hand, Mr. Secretary, of your saying that
so many people are going back to work. It is great that people are
going back to work. We certainly all want people to go back to work
and people in businesses to reopen. But, at the same time you are
saying people are going back to work, you also say the $600 extra
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help to workers and families to survive the crisis is stopping people
from going back to work.
So I think it is pretty tough to argue both sides of that. The re-
ality, as I can tell you from Michigan, is that the provisions in the
Pandemic Unemployment Assistance program and the additional
$600 in weekly benefits have really been a lifeline for workers and
families and employers in Michigan. And it is helping people put
food on the table, and with their basic needs, and those are not just
words. That is the reality for folks.
I also want to say that the increase in weekly unemployment
benefits has helped employers in our State that have signed up for
Work Share. And I want to speak about that and get your reaction
to that. Because in Michigan, an employer who signs up for Work
Share can reopen at their own pace, reducing the employee hours
by as little as 10 percent or up to 60 percent. The employer pays
part of that wage, as you know. The unemployment system pays
the other part of it, including the $600. And it has created a real
incentive for people to go back to work.
People want to work. People in Michigan work hard. They want
to go back to work. But there needs to be a bridge, a way to be
able to do this, and Work Share has allowed our employers to re-
tain their talent, save money on salary costs as they are reopening,
and ensure that employees have a liveable wage—a liveable wage.
And that is over 1,400 businesses so far in Michigan using Work
Share, as well as over 70,000 jobs.
So, Mr. Secretary, instead of debating whether or not we should
allow the CARES Act to have strong unemployment provisions or
whether or not they should expire, I hope we would be talking
about Work Share being expanded. You know it is 25 States now
that need to be expanded. So could you speak about how you could
further lower the barriers so more States can develop their own
Work Share programs, and what you are doing to promote that?
Secretary SCALIA. Thank you, Senator. First, I agree that, al-
though Friday’s jobs report was exceptionally good news, the eco-
nomic challenges that Americans are facing as a result of the
coronavirus are not over. Our job at the Labor Department to help
the States make sure people get unemployment benefits is not over,
nor is our job to work with the States to help people return to
work. So we very much appreciate that.
But with that said, that report is one to be celebrated for what
it tells us about how robustly and how early our economy began re-
opening in May. The $600 benefit, as I have said, was a really im-
portant thing that this committee, the Congress, and the President
did to help workers during a closing economy, and I actually agree
that there are a number of reasons that workers should prefer to
be back at work——
Senator STABENOW. If I might—just in the length of time that I
have, could you speak to Work Share and whether or not you are
reaching out to businesses to let them know about this as an im-
portant way to be able to bring people back to work while main-
taining a liveable wage for workers? Is that something you have
been focused on?
Secretary SCALIA. It is something that we have looked at, Sen-
ator. Ordinarily the concept behind Work Share is, it is a way of
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helping a company that might have to have layoffs to keep people
on a part-time basis. But we do agree that it can be a way of bring-
ing people back, albeit on a part-time basis. It might work well in
a restaurant, for example, that cannot go to 100-percent capacity.
We have been speaking to the States about doing that, and about
working with them to help set up those programs. But just to fin-
ish on the $600 benefit, because I want to be clear, it was an im-
portant thing to do to help workers back in March.
What we are talking about now is, Congress set it to expire in
July, and my point is simply, that recognizes we will be in a very
different place in July, where the opportunity for people to return
to work will be far greater.
Senator STABENOW. If I might, there is one other thing I want
to ask, and that relates to safety in the workplace. People want to
go back to work. They have a right to know that their workplace
will be safe. And in fact, if there is a concern from workers that
their workplace is not safe, they should not have to return until it
is.
And I am very concerned that the guidelines you talked about
are voluntary guidelines. They are not enforced. They are not a re-
quirement of the CDC or OSHA to make sure that workplaces are
safe. There is not strong enforcement. And so what we have seen
over and over again is people in workplaces getting COVID–19,
being infected. Health-care workers, over 38,500 health-care work-
ers have been infected; 358 and more dead as a result of that.
We know that in meat-packing plants we have had over 2,000
people test positive and workers who have died because there are
no requirements to keep people safe in the workplace.
So people just want two things. They want to know they will be
paid for their work a liveable wage. And they want to know it is
safe. So I want very much for you to tell us that you will enforce
safety standards for workers in this country as they go back to
work.
Secretary SCALIA. Absolutely we will. We have put out extensive
guidance to help workers and employers understand their rights
and obligations, but we also have rules and statutory authorities
to enforce. We are conducting investigations, and we are respond-
ing to whistleblower complaints to keep workers safe on the job.
Senator STABENOW. Thank you.
The CHAIRMAN. Before Senator Thune starts, I am going to ask
Senator Wyden, when Thune is done, would you call on Senator
Menendez? I am going to step out just a minute.
Senator Thune?
Senator THUNE. Thank you, Mr. Chairman. And thank you, Sec-
retary Scalia, for taking time to be here today. This is important
oversight. This is what we have talked about, hearing from those
who are implementing the many bills that we have passed, what
is working and what is not working, how we can improve, what we
can do better. And I think that will shape and inform and guide
our decisions about future action that Congress might take.
On the forefront of the coronavirus pandemic, we have passed
now four pieces of legislation—if you count last week, five—to ad-
dress the coronavirus medical emergency and the economic fallout
associated with the pandemic. These bills are providing assistance
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to the American people through economic impact payments, loan
deferments, other programs and tax incentives to help businesses
keep individuals employed.
I think that has been working. Obviously, we cannot start spik-
ing the ball yet, but the numbers that we saw last week were cer-
tainly encouraging, and I think were evidence that some of these
programs, particularly the Paycheck Protection Program, have had
the desired effect. It is keeping businesses functioning and keeping
workers employed.
Mr. Secretary, it has already been noted that businesses began
reopening their doors and that many are struggling to rehire fur-
loughed workers due to the disincentive created by the $600 per
week supplemental unemployment payment for individuals who
are supposed to be ineligible for unemployment insurance if they
turn down an opportunity to return to work.
What are some of the challenges that you envision States facing
in identifying instances of individuals collecting unemployment
benefits after refusing an offer to return to work?
Secretary SCALIA. Well, Senator, if I could say, first of all, I think
there are many reasons that workers will want to go back to work.
I think, all things equal, people like being at work, especially per-
haps after having been at home for 2 to 3 months. So I think Amer-
icans are excited to get back to work.
But as anybody who has studied the unemployment insurance
programs knows, at the margins there is always a certain popu-
lation—particularly if there is an opportunity to have an equal or
greater income not working—there are a certain number of people
who will choose not working. And that is a challenge that is recog-
nized to exist, and particularly as we look toward a reopening of
the economy after the expiration of the current benefit in July. It
is something that needs to be kept in mind.
We have been reinforcing with the States, Senator, from very
early on, their obligation to ensure that people who are on unem-
ployment certify that work no longer is available, to coordinate
with employers that are calling people back to work. This is an un-
usual circumstance where we have hundreds of employers at a
time in a State bringing workers back. And so that’s an oppor-
tunity for the State unemployment insurance agencies to take note
that the jobs are returning and the workers can return too. We
would like them to keep an eye on that. And then as I mentioned,
we have been spending a lot of time, including working with our
Inspector General, to address the possibility of fraud in the unem-
ployment insurance system. Employers, or supposed employers, are
engaged in it. Third parties are engaged in it, and sometimes work-
ers are too. That is something we have been asking the States to
look into as well.
Senator THUNE. Good; thank you. As you well know, unemploy-
ment offices in States across the Nation continue to be over-
whelmed with claims, even as Americans begin returning to work,
and in addition, States’ unemployment systems are dated. These
two factors will likely make any additional changes to unemploy-
ment programs potentially overly burdensome on State unemploy-
ment agencies.
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So could you explain a little bit about what worked after passage
of the Families First Coronavirus Response Act and the CARES
Act in terms of the Department of Labor helping States adapt to
some of the system changes that are required by these two laws?
Secretary SCALIA. Sure. FFCRA provides us a billion dollars to
give to States to help with unemployment insurance administra-
tion, and they were able to use that money for staffing and also for
technology enhancements. I made it a priority of the Department
to disperse those funds absolutely as quickly as we could, and I
think that we succeeded in doing that, and that did help.
The flexibility they had to bring in staff was certainly helpful to
them. They were in a period where unemployment had been so low
there was not a need for much staff. They needed to bring people
in quickly and train them. Over time, they were able to do that.
Then as I mentioned, there were technology problems. We found
that there was a problem with a computer program we run called
ICON, which the States use. We fixed that over a weekend, within
3 or 4 days of learning of the problem. We were able to remedy
that, and that at least helped the States deal with one of the tech-
nological hurdles they faced.
As I mentioned, we also put them in touch with our Chief Infor-
mation Officer, and with something called the U.S. Digital Service
to help with technology as well.
Senator THUNE. Mr. Chairman, my time has expired. I would
like to submit for the record a question dealing with the gig econ-
omy and gig economy workers, how they have been dealing with
this. Thank you.
The CHAIRMAN. Okay, your questions will be received.
[The question appears in the appendix.]
The CHAIRMAN. Now, Senator Menendez, by TV or whatever, or
virtual, or whatever you call it.
Senator MENENDEZ. Thank you, Mr. Chairman.
Mr. Secretary, I share some of the concerns that the ranking
member raised, Senator Wyden. I think it is fair to say that if you
have an amendment that strips the $600 and every Republican
votes for it, that was your intention. You did not want the $600 to
be part of the unemployment compensation.
But what I am concerned about is that it seems to me that these
rosy expectations that everybody will be able to go back to work are
just not going to be realized by August 1st. I live in a State that
has the second largest number of COVID–19 deaths and infections.
It is going through a staged reopening.
That means that many businesses still will not be open by then,
or they will be opened with less capacity by then, which means
that they will require less workers by then. And so if that is a re-
ality—and we have seen where there has been a premature open-
ing in States that in fact we ended up with a higher COVID infec-
tion rate as a result of the premature opening.
So you know, when we have a national unemployment rate of
13.3 percent, when the unemployment rate among African Ameri-
cans is even higher, 16.8 percent, when unemployment among
Latinos is even higher than that, 17.6 percent, what is the admin-
istration’s plan for August 1st?
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Secretary SCALIA. Senator Menendez, thank you for the question.
I think part of what we would like to do is watch how things de-
velop over the weeks ahead. One of the really striking things about
the Nation’s experience with coronavirus has been how swiftly
things change.
And in the early weeks, unfortunately those were a series of
swift changes for the worse, as the health problems increased
greatly, and of course as we very suddenly——
Senator MENENDEZ. Mr. Secretary, we know there is going to be
a cliff on August 1st. Why should we wait to address the cliff until
after August 1st rather than before it?
There is no question that unemployment is still going to be very
high on August 1st, no matter how well we might desire it to be
different. And so for all those workers who either cannot get back
to work because their phased reopening has not opened their
former place of employment, or the phased reopening has only al-
lowed, for argument’s sake 50 percent of the employees to come
back, or there is still a risk, a reasonable risk, a serious risk of con-
traction of the infection, what are we going to do on August 1st?
Secretary SCALIA. Well, as I was saying, things have changed
quickly for the worse for a period of time, but now we are seeing
that things have the capacity to change quickly for the better.
We know where the economy was in mid-May. We will know
more when our next jobs report comes out in early July about the
state of the economy. I think, based partly on that, we can make
an assessment of what measures, if any, could be necessary after
July 31st. I recognize that, as you said, we will not get back to the
extraordinary economy that President Trump brought us of 3.5-
percent unemployment. We will not get back there in early fall.
Senator MENENDEZ. Let me turn——
Secretary SCALIA. But we will know a lot more as we come into
July. And I think at that time, we can take an assessment of the
appropriate measures.
Senator MENENDEZ. If I could reclaim my time, Mr. Secretary—
I am not going to let you filibuster my time. We are in the phases
of reopening. How many coronavirus-related complaints has OSHA
received?
Secretary SCALIA. I do not have——
Senator MENENDEZ. My understanding is it is 5,000. Is that cor-
rect?
Secretary SCALIA. We have received several thousand. I do not
have the exact number——
Senator MENENDEZ. How many coronavirus citations——
Secretary SCALIA. I am sorry, Senator. I am just trying to com-
plete my answers.
Senator MENENDEZ. How many coronavirus citations have been
issued by OSHA?
Secretary SCALIA. We have issued one citation to date——
Senator MENENDEZ. One citation?
Secretary SCALIA. I would add that we have a 6-month limita-
tions period. Of course it has been less than 6 months since the
virus came here, so we have a number of cases that we are inves-
tigating. And if we find violations, we will certainly not hesitate to
bring a case. This is something I——
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Senator MENENDEZ. It seems to me, Mr. Secretary——
Secretary SCALIA [continuing]. Have talked to our head of OSHA
about a number of times.
Senator MENENDEZ. It seems instead of ‘‘guidance,’’ you should
be issuing emergency, temporary standards that are very clear
under OSHA and that would make a clear example of what is ac-
ceptable to return to work safely and what is not acceptable, and
those who are forced to return to work in a situation that is unac-
ceptable will have a valid claim. One out of 5,000 is unbelievable.
The CHAIRMAN. Senator Toomey, by TV.
Senator TOOMEY. Thank you, Mr. Chairman.
Mr. Secretary, thanks for joining us today. I just want to be clear
about something. According to the University of Chicago, about 68
percent of people who are unemployed today make more money
being unemployed than they do being employed.
Is it your view that that is a disincentive to going back to work?
Secretary SCALIA. Thank you for the question, Senator Toomey,
and I unfortunately was not able to complete my answer to that
point to Senator Menendez. That can function as a disincentive.
That is recognized by people who follow unemployment insurance
programs.
I would point particularly to the study that the chairman re-
ceived from the Congressional Budget Office that looked at this
question, in which it projected that for the second half of the year,
if the $600 benefit were retained, five out of six people on unem-
ployment would be receiving more than the wage they were likely
to get from working. And I do not think many people would design
an unemployment system that operated in that way, and that is
why this discussion makes sense.
Senator TOOMEY. And we have had unemployment before. There
is always some level of unemployment. We have never said, ‘‘Let
us make sure that people are paid more not to work than they get
paid working.’’
We hear everyone talking about how they want to get everyone
back to work, but at the same time some people are advocating a
system that we know discourages people from going back to work.
And is it not also true that if people affected by this disincentive
do not go to work, then it is not only they who are not back at
work, but the mere fact that they are not at work means other peo-
ple are unable to go back to work just because the economy is that
much slower and there is less business being conducted?
So does that not have a knock-on effect throughout the economy?
Secretary SCALIA. That is correct, Senator. We want people who
are not able to get to work to have the safety net of an unemploy-
ment program. But you are right. If people have the opportunity
to return and do not, it can function as a hindrance not just to
them but to the functioning of what is a very, very interconnected
economy.
Senator TOOMEY. So let us focus on some great news, because
there is a lot of great news actually. One thing is the fact that we
have had quite a number of States that have been quite open for
business, some for many weeks now. It is not the case that the en-
tire country is closed down. In fact, there is a long list of States
that began their reopening in April and early May. And is it not
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20
true that there is no big spike of COVID cases in the States that
have gone a long way towards reopening?
In fact, the data shows that the decline in the new cases in
COVID–19 has continued overwhelmingly in these States. Is that
your understanding?
Secretary SCALIA. The reopening seems to be going well, Senator.
It is very encouraging. There are spots we need to keep an eye on,
and we need to be safe about how we go about it. But it has been
very encouraging.
Senator TOOMEY. The other thing that has been very, very en-
couraging is the fact that, back in mid-April, we had a week where
we produced 21⁄2 million new jobs when we thought we might be
shedding 6, 7, 8, 9 million jobs. It was the exact opposite.
And is it not true that that mid-April number—look, I do not
have a crystal ball, but I do know that many States moved in the
direction of reopening since that time. And so it stands to reason,
if our economy was producing 21⁄2 million new jobs in a week back
in mid-April, that it has been probably producing new jobs since
then. And when I say ‘‘new,’’ obviously we are really talking about
people getting back to their old jobs. But is there not good reason
at least to be hopeful that we are starting to really climb out of
this and starting to create the opportunities for people to go back
to earning their livelihoods?
Secretary SCALIA. Absolutely, Senator. One of the numbers that
has caught my attention in both the report for the month of April
and the report for the month of May is a very high percentage of
workers who are unemployed but believe it is temporary.
In our report for the month of May, nearly 85 percent of workers
who had been put out of work said, ‘‘This is temporary. I am going
back to my job.’’ And I regard it as one of our most important mis-
sions right now at the Labor Department to help make that hap-
pen, and to make it happen safely.
Senator TOOMEY. Thanks very much. Thank you, Mr. Chairman.
The CHAIRMAN. Now I call on Senator Cardin, by TV I believe.
Senator CARDIN. Thank you, Mr. Chairman. And, Mr. Secretary,
thank you very much.
First, let me share the concerns that have been expressed in re-
gards to worker safety. To me, that is one of the most important
roles that you have, to make sure that workers are safe.
Secondly, let me underscore what I believe is our need to act,
that the job is not done. Whether it is unemployment insurance, or
whether it is the PPP program, the small business aid, or whether
it is the tax code itself, we know that we are going to need a transi-
tion from where we are now to when our economy is fully per-
forming. So I just urge us to show a sense of urgency.
Thirdly, I want to just underscore the point that Senator Stabe-
now made in regards to the short-time compensation rules. That
gives an employer an opportunity to share work so that he or she
can keep the workforce intact during these tough times.
So, Mr. Secretary, I would hope that you would give some per-
sonal attention to how we can implement this provision, because I
do think it helps us transition back to when our economy is in full
performance.
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I want to get your response to a question I had from the Gov-
ernor of Maryland in regards to implementing this program. Mary-
land, like most States, had IT challenges because they are trying
to put the State program in with the Federal program. But it was
the Interstate Connection Network, ICON, that did present some
original challenges. And I believe you have indicated that there
were startup challenges in regards to ICON. But in addition, there
have been changes in guidance given by the Federal Government
which have required our States to change their IT programs.
Can you share with us how you are working with the States, the
current status of ICON, and the IT capacity of our States in order
to get timely decision-making? We still have in Maryland a lot of
people who are waiting for determinations. What is the current sta-
tus of that?
Secretary SCALIA. First, I agree with you that our job is not done
in helping workers during this challenging time, and in fully re-
storing our economy. And I agree as well on the importance of
worker safety.
I think there is a difference as to means perhaps, but it is some-
thing that has been of great, great focus at the Department of
Labor. And by the way, I have personally engaged in the Work
Share subject and looking at ways that we can encourage States to
do that, and I have assisted in that.
With respect to the ICON system, which you mentioned, yes,
there was a problem that came to our attention. We fixed it within
days. I have had a couple of conversations with Governor Hogan
who, as you know, is also Chair of the National Governors Associa-
tion.
He has never expressed any concern to me about changes to the
guidance that we have provided. I am not aware of any changes
that he might be referring to. We have put out a great deal of guid-
ance. I suppose some of that guidance made certain points clearer
than they might have been before, but I think we have largely been
unswerving and clear in the guidance as we have given it, although
we have provided refinements as they have been requested.
And finally, with respect to the technology, I appreciate that that
has been a challenge for the States. As you heard Ranking Member
Wyden say, that was something I cautioned the members of this
committee about when CARES was written, that the State unem-
ployment insurance computer systems are really old. They are
bulky. But we have tried to help by making our Chief Information
Officer available, by making the U.S. Digital Service within the Ex-
ecutive Office of the President available to States. And we do be-
lieve that States have found fixes, have found work-arounds.
We worked, for example, with Florida on one which related to a
problem they were having with ICON. And we also worked with
New Jersey on one that related to ways that certain forms were
being submitted through their system.
So those systems have been problematic, but I think they have
been enhanced in the last few weeks.
Senator CARDIN. Can I follow up on the certification require-
ments? Have you had concerns expressed by States that the weekly
certification to make sure that the recipient is not getting benefits
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22
in more than one State has caused undue challenges to the States
in implementing the program?
Secretary SCALIA. Senator, we have had some States that have
expressed interest in doing away with the certification require-
ments. And we understand the desire that they have had to get
payments out quickly. But there is a balance to be struck with re-
spect to the integrity of these programs. And we felt it was impor-
tant to retain that certification requirement as one check against
the fraud against the system that we know has occurred.
There has been very substantial fraud, we have learned, against
the unemployment insurance systems of the States during imple-
mentation of CARES. And so we do need to keep that in mind as
well.
The CHAIRMAN. Senator Cassidy?
Senator CASSIDY. Thank you, Mr. Chairman.
Mr. Secretary, again thanks for the hard work you and your de-
partment have done. One of the advantages, if you will, of speaking
after many other people—you know the concern. Republicans are
concerned that $600 a week in which people are earning more than
they are paid would encourage them not to work. And that has
negative effects for the person and negative effects for society. That
is known. But it has been roughly a kind of Republican/Democrat
split, with Democrats apparently pooh-poohing that. Just to see if
there could be an objective analysis, aside from the report from
CBO, I found a quote from Professor Larry Summers, who was
Obama’s, I think, director of something or other—everybody knows
who Professor Summers is. ‘‘Government assistance programs con-
tribute to long-term unemployment by providing an incentive and
the means not to work. Each unemployed person’’—and note this
term—‘‘has a reservation wage, the minimum wage which he or she
insists on getting before accepting a job. Unemployment insurance
and other social assistance programs increase that reservation
wage, causing an unemployed person to remain unemployed later.’’
Again, Larry Summers, who is esteemed, and from Harvard, and
with Obama, et cetera.
Now let me ask you, sir, what would be—if the $600 a week pan-
demic unemployment benefit is extended through the end of the
year—what do you estimate the reservation wage is that a business
must offer to someone on unemployment to convince them that
they should return to work? And is this a wage most businesses
would be able to match, or even bear, if they are a small business?
Secretary SCALIA. Thank you for the question on this topic, which
obviously is of great interest to members of the committee.
Senator, if I could, I would like to be clear again that the $600
benefit that was provided in the CARES Act was one of the really
very important good things done in that act. It was the right thing
to do at that time in a closing economy. And I am mindful of the
concerns, and I heard members of this committee expressing at the
time that that might result in some people turning down work.
We have made a priority of the Department working with the
States to focus on the existing protections in the law to make sure
that does not happen. However, much of the discussion that I think
we are having now is looking ahead, as your question does, not to
what we put in place but what, if anything, will be done when the
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$600 benefit expires on the deadline of late July that the Congress
agreed to set.
I have not read Professor Summers’s piece. He is obviously a
highly respected economist——
Senator CASSIDY. It is an older piece; I do not think he is saying
it right now. [Laughter.]
Secretary SCALIA. Maybe he has recanted. But you are correct.
At the margins, again, for some number of employees—and I am
not talking about the millions of hardworking Americans who
would rather be at work—but for some number of employees, you
will have to set that wage higher, substantialy higher perhaps,
to——
Senator CASSIDY. Do you have a sense of what that would be?
Secretary SCALIA. I do not. I do not have a sense of what it would
be, but it would be probably appreciably above 100 percent of what
the work would compensate.
Senator CASSIDY. I do not think anybody is criticizing anybody
for making a rational individual decision. If I make more money
not working, I am not going to work. That is a rational decision.
It is just that we know that working actually, statistically, is good
for people. So I do not think—you know, I am not asking you to
do that.
Now some folks have said, ‘‘Wait a second; we cannot continue
this forever.’’ Is there a way to gradually scale it down so that, yes,
we provide support but we encourage people to return back to the
workforce, which is good for the family, good for the individual,
good for society?
But I am struck with what you have said about the inadequacy
of State information systems. Are State unemployment systems ca-
pable of a system that would gradually scale down the amount of
benefits received from month to month?
Secretary SCALIA. I believe that the States have made progress
in their systems from where we were in March. And I was explain-
ing to Ranking Member Wyden that this was something that I
would be interested in exploring further with the committee.
I think there may be a greater capacity now than there was in
March for the systems to scale, or for the Treasury Department, for
example, to assist in that. That was an approach that we had
raised at the time that CARES was being considered, that there
might be a way for the Treasury Department to function as part
of the distribution system.
But there also, as you know, Senator, has been discussion of per-
haps having a smaller benefit, maybe not $600 but perhaps $250.
I have heard that——
Senator CASSIDY. But the question is, could you scale it down?
Let me move on to my last question. I am almost out of time.
There have been a lot of layoffs. The job numbers actually were
great, but in the public sector we continue to have people laid off.
And as it turns out, many of those are in the education system.
Now when you go back, it is clear there will be smaller class-
rooms with more assistance in order to help the children maintain
social distancing, et cetera. Senator Menendez and I have put to-
gether a SMART Act, which would help these State and local gov-
ernments rehire these employees. But do you know how many of
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24
these 1 million or so State and local employees in education have
lost their jobs or are on temporary furlough? Do they expect to be
rehired, or have they been let go entirely? Do you have any sense
of that?
Secretary SCALIA. I do not have those figures. I could get them
for you. Government jobs were the one category of jobs with very
substantial losses in May. I think it was about 600,000 jobs, actu-
ally. And many, many of those jobs were in K–12 education and in
college.
So I could try to get more detailed data, but I know that many
of the jobs lost in May were in that sector. But I am also confident
that those are probably all jobs that will come back as schools re-
open.
The CHAIRMAN. Senator Brown, by TV.
Senator BROWN. Thank you, Mr. Chairman. We are learning the
technology here. Thank you so much, Mr. Secretary. Thank you for
being here.
Ranking Member Wyden and I, along with 22 of our colleagues,
sent you a letter dated May 14th outlining concerns about UI bene-
fits being delayed in so many of our States, that $600. And I would
point out, in spite of all my Republican colleagues on this com-
mittee talking about how they like that benefit now, they all but
one voted against it. The only amendment Senator McConnell did
allow on the floor on the entire CARES Act was to wipe away the
unemployment benefit on that $600. So they can take credit for
doing it, but now they are against it. It is just something to remem-
ber about who is on the side of workers.
But anyway, we outlined—we saw too many States, too many
people were not getting the benefits. They were delayed. Our letter
asked you to undertake a critical survey of State unemployment
programs so we can fix the problems that caused the delays and
make sure they do not happen again.
Would you, Mr. Secretary, commit to conducting that survey that
23, 24 members of the Senate asked for, providing policy rec-
ommendations and responding in a timely fashion?
Secretary SCALIA. Senator Brown, thank you for that letter. I be-
lieve it gave us a mid-July return date. You asked for certain infor-
mation within 60 days. Because I do not have the letter in front
of me, I am hesitant to commit that we will provide every piece of
detailed information that was sought. But we certainly will respond
to that letter.
Senator BROWN. Thank you.
Secretary SCALIA. I understand the concerns that you have.
Senator BROWN. I think that you and I share, and all of us share,
an interest in making sure that we can fix this UI system which
has had a workout that nobody expected it to have, but also a UI
system that has gotten pretty outmoded and outdated over the
years. So thank you for that.
My second question: the national unemployment rate is over 13
percent. The unemployment rate for the Latin worker is almost 18,
and almost 17 for black workers. If we phase out the unemploy-
ment insurance program in the CARES Act, including the $600
weekly benefit which ends in July, do you expect black and brown
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workers to be disproportionately affected by that policy decision?
‘‘Yes’’ or ‘‘no’’?
Secretary SCALIA. Senator Brown, I do agree with you on the
State unemployment insurance systems. As I said, I think there
has been significant progress made. But as we look back at lessons
learned and things that we might want to fix going forward, I do
think that is an area that is worth further consideration, how they
can be enhanced.
In terms of the job prospects for African Americans, Hispanic
Americans going forward, that will depend in part on different
parts of the country’s’ reopening schedule, different sectors of the
economy.
What we do know is the economy that we had before, which
President Trump was instrumental in building——
Senator BROWN. Mr. Secretary, I am going to interrupt you. I
have heard your commercial——
Secretary SCALIA [continuing]. Was an economy that achieved
record low——
Senator BROWN. Mr. Chairman, I want——
Secretary SCALIA [continuing]. Unemployment for African Ameri-
cans and Hispanic Americans——
Senator BROWN. Mr. Secretary, we have heard—Mr. Chairman,
we have heard the Trump commericial——
Secretary SCALIA [continuing]. And that is the objective once
again.
Senator BROWN. Mr. Chairman, would you gavel the witness,
please? We have heard the Trump commercial over and over, how
great the economy was, even though many Americans did not have
$400 in their pockets, even in the great growth of the Trump econ-
omy, which was not nearly as good as the Secretary likes to keep
saying.
It is clear that brown and black workers will be disproportion-
ately affected. I mean, that was a simple ‘‘yes’’ or ‘‘no,’’ and I got
a commercial for the President’s re-election.
Next question, Mr. Chairman. Some have argued that that $600
is going to keep workers from going back to work. It is a pretty
clear takeaway here. The companies they worked for did not pay
them enough to begin with.
So, Mr. Secretary, if we raise the Federal minimum wage to $15
an hour, would you expect the number of workers who receive more
in UI than they did in their paychecks to decrease? That is a pretty
easy ‘‘yes’’ or ‘‘no.’’ If we raise to $15, will that make more workers
make more on the job than they are getting in UI?
Secretary SCALIA. Not necessarily. The UI payment right now,
with the $600 plus-up, averages between $50,000 and $55,000 a
year in unemployment insurance. That is substantially more than
is made in employment——
Senator BROWN. Well except, Mr. Secretary, they do not——
Secretary SCALIA. And in fact, if I could finish—if I could finish—
in fact, the $600-plus-up alone is substantially more than the min-
imum wage on an annualized basis. But you have, in addition to
that, the State payment. So unfortunately, I do not think that is
a help——
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Senator BROWN. I can see, Mr. Secretary—I can see what a good
lawyer you were as a corporate lawyer, but the fact is, it is not
$55,000. It is 39 weeks; that is the maximum, but let us put that
aside.
I wanted to say——
Secretary SCALIA. I was annualizing the benefits.
Senator BROWN. Senator Menendez pointed out how outrageous
it was—he pointed out that you have received 5,000 complaints
from workers, terrified they are going to get coronavirus on the job
and then have to go home and potentially expose their families,
and you have only done one citation.
I would like to ask you to submit to this committee, and my of-
fice, the list of all on-site, in-person inspections as a result of a
complaint received by Federal OSHA. I would like you to submit
a running total as you do these inspections.
I mean, we know what the President said when we saw what
happened in Sioux Falls with hundreds of people diagnosed with
coronavirus at the slaughter house, and the President using the
Defense Production Act ordering them back to work. Nothing about
worker safety. Nothing about slowing down the line. Nothing about
food safety. And that, I think, tells the story.
I will just close with this, Mr. Chairman. We are in the midst
of a pandemic. We have a President and an administration that
call workers essential but treat them like they are expendable. The
President said last week the unemployment numbers are, quote,
‘‘stupendous.’’ In reality, they are the worst since World War II. In
Ohio, they are opening up eviction courts, actually in arenas, if you
can imagine that.
We have learned from the DOL in this hearing that they have
issued one citation—one citation—showing how much they really
care about workers. The Attorney General, over the weekend, said
there is not any institutional racism in policing.
I do not know how he figures that. We should not be cutting off
the safety net workers need to pay their bills. We cannot allow the
administration to continue its 4-year-long betrayal of workers.
The CHAIRMAN. Senator Bennet?
Secretary SCALIA. Mr. Chairman, I am sorry, but could I respond
to that?
The CHAIRMAN. You may respond to it. Before you respond to it—
well, no, go ahead and respond to it.
Secretary SCALIA. We have——
The CHAIRMAN. And then Senator Bennet.
Secretary SCALIA. We are investigating every single complaint
that we receive from workers about unsafe conditions pertaining to
COVID. We have a 6-month limitations period, and when we find
violations, we will indeed bring citations, if we find them. We have
the tools needed to do that. We also have, as I said, a 6-month limi-
tations period.
So we will—we will do that work. That said, I think it is a real
disservice for people to suggest that OSHA is not taking this seri-
ously. Employers need to know that indeed we are, and they do
need to protect their workers. And we want workers to know that
if they have complaints, please do bring them to us. If they think
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that they have been subject to retaliation from raising health con-
cerns, please do bring them to us.
So I want to correct any impression that people listening might
have that OSHA is not indeed taking these matters very seriously.
The CHAIRMAN. Anybody can correct me if I am wrong, but I
heard Senator Brown say that the President used the Defense Pro-
duction Act to order the workers back to work. He ordered the com-
panies to get the company up and running. The only way you are
going to get workers to go back to work is if they realize that they
are not going to go into a death chamber when they go back to
work, and that was the company’s response to that——
Senator BROWN. Or, Mr. Chairman, if they think they are going
to lose their jobs if they do not return back to work. I mean you
cannot—workers are going to go back if they think they will lose
their job and will not get their unemployment benefits.
The CHAIRMAN. Well, he did not correct me, but go ahead, Sen-
ator Bennet.
Senator BENNET. Thank you, Mr. Chairman. Thank you, Sec-
retary Scalia, for being here. We appreciate it. And I am grateful
for the response to Senator Brown’s question. I think it is critically
important, because if people do not think they are going to be safe,
if they do not think health is going to be enforced at work, they
are not going to go back to work.
And what I heard you say, Secretary Scalia, is that you want
OSHA on the job. You want people to know that they can file com-
plaints if they have been mistreated at work in this context, and
that you will report to the committee the work that OSHA is going
to do or has not yet done.
I think that is very important to all of us, and we want to know
it. We want to know what the facts really are, because it is the
only way people are going to go back to work.
I think it is clear that we are facing an unprecedented health-
care challenge in this pandemic, and that has created unprece-
dented economic crisis in our country. One in six workers in this
country is unemployed. By the way, I also would say that the
Trump economy and all this stuff, the reality is the average month-
ly job creation under Donald Trump is lower than it was under
President Obama for the first 3 years of the Trump administration.
So rewriting that history here I do not think is all that helpful.
But in this moment—and to you, Mr. Chairman, to the ranking
member, I would say ‘‘thanks.’’ In this committee, we have helped
workers in two major ways. First, we expanded unemployment ben-
efits to cover almost 10 million self-employed workers, gig workers
and others who are usually left behind and I hope will not be left
behind in the future.
Second, we added $600 per week, as we have been debating here
together, to the normal unemployment benefit for all 30 million
workers claiming benefits. And had we not done this—without this
tens of millions of families across the country from Iowa to Oregon
through Colorado would have seen their incomes drop by 60 per-
cent, 70 percent, or more.
And we prevented that from happening. And I know we are hear-
ing criticisms today about the benefit—I just want to be very clear
about what it has done until now. The $600 weekly benefit has pre-
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28
vented a level of severe hardship that it is almost impossible to
comprehend—even in this hearing room.
It paid the rent and prevented evictions. It has kept food on the
table so families do not go hungry. It has kept the lights on and
paid for Internet so kids can have access to learning. And it has
been a central lifeline to families in the middle of the worst eco-
nomic crisis since the Great Depression. Even President Trump
seems to recognize this, because he is running campaign ads tout-
ing these benefits.
But even as he is running the ads, he is also threatening to take
them away. And I think that would be a profound mistake. Right
now, 17 percent of American families cannot cover 3 months of
basic expenses. Without the extra benefits, that number would rise
to 43 percent. Today, nearly 10 percent of Americans cannot make
rent. Without the extra benefits, that could rise to 30 percent.
Think of what that would do to our economy.
So if we let these benefits expire at the end of July, Mr. Sec-
retary, I would argue that we are going to throw tens of millions
of people who rely on them into a financial crisis, family by family,
all across the United States of America.
Mr. Secretary, you called expanded unemployment benefits,
quote, ‘‘an important short-term measure adopted in these extraor-
dinary times to alleviate the economic impact of the virus on work-
ing Americans.’’ I think you will agree, probably, with me, Mr. Sec-
retary, that we are not going to create 20 million more jobs in the
next 2 months. Do you think we are?
Secretary SCALIA. Senator, I would not predict 20 million jobs in
the next 2 months. What I do predict, and what we have already
observed, is a very different economy than existed when CARES
was enacted. And remember that this body itself set a July 31st
expiration for that benefit.
Senator BENNET. Right.
Secretary SCALIA. I think where we sit now is the recovery in the
job market has actually happened more quickly than Congress ex-
pected in late March.
Senator BENNET. Well, let us hope that is right. But I think that
it is probably safe to say at least 10 million people will be unem-
ployed at the end of July with no jobs to return to. I mean, does
that feel to you like an extraordinary circumstance along the lines
you described of the importance of the unemployment benefit in the
last downturn?
Secretary SCALIA. I think that 10 million unemployed Americans
is 10 million more Americans without a job than we want, and it
does make sense for us to consider, particularly as we get closer to
that July 31st date, what measures may be necessary.
But if I could just underscore again, the size of the benefit, as
valuable as it has been, as important as it has been—it is great.
In Massachusetts, you are able with this $600 plus-up to obtain
$75,000 a year. That is the annualized income that you get on un-
employment in Massachusetts right now. In the State of Oregon,
it annualizes at potentially $65,000 a year.
Senator Brown asked me about the $15 minimum wage. As I
said, the $600 weekly benefit by itself is actually just slightly more
than that $15 minimum wage. But on top of that, you get the State
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29
unemployment benefit. So it has been a very important system, but
as we look long-term, I think there few people who would suggest
that you should have an unemployment system long-term that pays
$75,000.
Senator BENNET. I have gotten my last minute taken away from
me, Mr. Chairman, so if I could just take 30 seconds to finish my
point——
The CHAIRMAN. I will give you 30 seconds.
Senator BENNET. Thank you. That is all I will take. In answer
to Senator Cassidy’s question, Mr. Secretary, you said you thought
the State departments were now up to the challenge of maybe deal-
ing with a benefit that ratcheted down over time.
I believe that it was a mistake for us to tie it to a date certain.
I do not think that makes sense. I think what we should do is tie
it to the economic conditions that the country is facing and that our
workers are facing, so that when the economy—when the employ-
ment is going up, the benefit is going down; when we are doing
worse, the opposite would be true.
And I hope you will work with the committee to design some-
thing rational like that, because having it just end on a date cer-
tain is going to be very cold comfort to millions of people in this
country.
Thank you.
Secretary SCALIA. Senator, I would welcome the opportunity to
continue that conversation.
Senator BENNET. Thank you. Thank you, Mr. Secretary.
The CHAIRMAN. Before I call on Senator Casey, who is next, I
want to remind people that during the debate on the CARES Act,
Senator Sasse and others put forward an amendment to the bill not
to block the extra $600 payments, but instead to tell States they
would have to make sure that they did not pay people more for not
working than working. States said it would have taken them
months to implement, so clearly States were hit with an over-
whelming shock that was difficult for their systems to deal with,
but no one proposed to block these extra payments entirely.
Senator WYDEN. Mr. Chairman, if I could, the States were in-
capable at that time of doing what Sasse was talking about, which
is why—and you were in the negotiations—we had to go with a
rough justice approach. And it is why we have tried to extricate
from the Secretary this afternoon an answer to the question about
whether the States would be capable of doing 100-percent wage re-
placement now accurately. And he has not indicated that was the
case. So I just want to—and I know we are going to be debating
this—I just wanted to set the record straight.
The CHAIRMAN. Now we go to Senator Casey, by TV.
Senator CASEY. Mr. Chairman, thanks very much for this hear-
ing. And I want to thank Secretary Scalia for his presence at the
hearing.
Mr. Secretary, I will have a question for you regarding work-
places and COVID–19, but let me start with some of the data
which we cannot escape and which we have to continue to bear in
mind as we approach these challenges.
When I consider just that my home State of Pennsylvania—here
is some of the data—the case number now is more than 76,400
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COVID–19 cases. The death number has gone above 6,000. As of
today, the last number was 6,014 people dead from COVID–19.
In addition to that, the unemployment numbers are extraor-
dinary. More than 15 percent of our—the 15-percent unemployment
rate in Pennsylvania, 15.1, what that equates to is 976,000 people
unemployed. We never saw those numbers—as bad as the Great
Recession was, we never saw those numbers at that time.
Now I know with regard to both COVID–19 and the economic
devastation that flows in its wake, that we have passed, I guess it
is technically five bills now, two by consent and three that we actu-
ally had a vote on. Those five bills are helping in a lot of ways, but
more action is needed by the Congress.
Unemployment benefits had a very positive impact on people’s
lives. The $600 per week additional payment, by one estimate, re-
placed 30 percent of total private-sector wages and salaries lost
just in the month of April—so a huge impact on people’s lives.
Benefits, as you know, are about to end at the end of July, July
31st, so the benefits end but the cost for mortgage, the cost for
food, the cost for rent, so many other costs in the life of a family
do not end on July 31st. And I think it is about time we started
to say that more and bear that in mind as we hear Senators talk-
ing about ending this program in an arbitrary fashion with no ap-
proach, no strategy to replace it or to mitigate the damage.
And more broadly, many in the Senate majority want to stop leg-
islating altogether on COVID–19 and on jobs. Now some have said
they want to help States and local governments. There is some bi-
partisan action on a few issues. But in terms of the substantial
help that our States still need and our communities and our fami-
lies need, it seems like the Senate majority wants to walk away
from that responsibility.
I do not think that is what the American people want. And espe-
cially they do not want us to spend another month voting on nomi-
nations instead of COVID–19 and the jobs crisis. I think we can do
better than that.
Now, back to the unemployment rate, we know that, as much as
the unemployment rate is high across the Nation at more than 13
percent, it is especially high for African Americans—almost 17 per-
cent for African Americans, and at last count for Hispanics 17.6,
which just happens to be the same unemployment rate that is in
my home county, Lackawanna County, PA.
So there is a lot of pain out there. So as we talk in this academic
fashion about ending a program, we should acknowledge and be re-
sponsive to the devastation out there. We should not cut off unem-
ployment insurance with no effort to mitigate the damage of the
economic devastation so many families are facing. So we ought to
be talking about providing pandemic premium pay for frontline
workers who have risked their lives. All of that should be part of
our debate.
Now I want to ask the Secretary a question about a letter we
sent him in May. Mr. Secretary, we sent you a letter to clarify
whether workers who have been offered their jobs back would lose
unemployment insurance if they refused to work in a circumstance
where the workplace they would return to is in fact unsafe.
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Will the Department of Labor issue guidance to States to clarify
that workers cannot—cannot lose unemployment insurance if the
workplace is not safe and following CDC or OSHA requirements?
Secretary SCALIA. Senator Casey, it is good to have the chance
to speak to you again. There was a lot in that question. Just a cou-
ple of quick comments, and I will answer your question.
I agree with you. It is very important that we remain mindful
of the impact that the coronavirus has had on workers and on em-
ployment. That is a focus of the staff at the Labor Department
every minute of every working day, and those have been long days
too.
I do think it is important to remember that, as much as we want
our unemployment system to function as effectively as possible,
even better is a job. And so our long-term goal really does need to
be getting our economy back to where it was. It was so vibrant
through the first week of March, and there was actually a piece in
The Wall Street Journal that just came out today speaking of how
the economy under the President, which was affected by corona-
virus was, quote, ‘‘the best African American job market on record.’’
That is how the Journal described it. And then that is what the
numbers show.
So we want to get back there. In terms of your question, Senator,
the precise circumstances in which a worker can decline to go to
work because he or she believes the workplace is unsafe is some-
thing that the States determine according to their law. The re-
quirement is that it be suitable work. ‘‘Suitable work’’ has to be
safe.
So the States are to judge that. There are certain broad param-
eters, but I think certainly if the worker has facts telling him or
her that the workplace is unsafe because there are unmitigated
COVID exposures, we would think that the worker should not have
to go back until that workplace is made safe.
Senator CASEY. Mr. Secretary, you are the Secretary of the De-
partment of Labor of the United States of America. One of the pro-
grams created under the CARES Act for unemployment insurance,
the so-called PUA, the Pandemic Unemployment Assistance, that is
a Federal program. And you have responsibilities beyond that
when you oversee unemployment insurance more broadly across
the Nation. Do you not feel that—or do you not believe that you
have a responsibility to give guidance on something as funda-
mental as the safety of a workplace in the middle of a pandemic?
I just think that has to be an obligation you have. I do not under-
stand why you think you can just pass that off to the States.
The CHAIRMAN. Please give a short answer.
Secretary SCALIA. We have given it—it is a Federal-State part-
nership.
The CHAIRMAN. Senator Warner?
Senator WARNER. Thank you, Mr. Chairman. And, Mr. Secretary,
thank you for appearing here tonight. I know there has been a lot
of discussion about the bump-up on the unemployment assistance
during the pandemic, but one area where I hope there is bipartisan
consensus—and I appreciate the chairman’s and Senator Wyden’s
good work on this—is trying to make sure, during the pandemic,
that we cover all workers.
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I think we all now realize how many workers traditionally were
not covered by unemployment. In my State of Virginia, 683,000
workers who were freelancers, 1099ers, independent contractors,
gig workers, had not been covered. As a matter of fact, on a nation-
wide basis about 20 million workers were not covered by traditional
UI. And I do hope one area that we can agree on is that we need
to make sure, as that part of the economy is not changing—we are
not going away from freelancers, gig workers, 1099ers—that we
make sure they get some of these benefits. And thank goodness,
under the leadership of this committee, we did that.
Because, while about 181⁄2 million Americans qualified for tradi-
tional unemployment, over 10 million Americans qualified for the
PUA, the expansion, and I think that lifeline has made a difference
from, frankly, economic ruin. And again I hope, Mr. Secretary, that
you would believe that that type of a program needs to be contin-
ued.
One thing, Mr. Secretary, I want to drill down on is something
we have been trying to get an answer for. If we all agree that the
intent of Congress with this expansion under PUA was to cover all
workers during this unprecedented time, I want to make sure that
you would confirm something we still have some lack of clarity on.
And that is, that freelancers, including those who work from home
who have lost work, or domestic workers who obviously work in the
home but who have lost work, that both of those categories are cov-
ered by the PUA.
Secretary SCALIA. Senator Warner, thank you for your attention
to this set of issues, which I know is very important to you, both
in the context of the current crisis in unemployment and more
broadly. I do agree that one of the really terrific things that was
done in the CARES Act—you know, we are hearing a lot of dis-
agreements today, but the CARES Act was the product and reflec-
tion of a whole lot of really great agreement. And one of those great
agreements was covering gig workers.
There are other programs, something called DUA, Disaster Un-
employment Assistance, that can also provide coverage, but we
have never done anything on a scale such as that. And I think it
was a very good thing to do in the CARES Act.
With respect to your questions, I always need to be careful in ad-
dressing specific hypotheticals about particular jobs, but I do be-
lieve that the freelancer is something we have addressed. I know
there has been concern about that. If somebody was making a liv-
ing, for example, as a freelance journalist and was for some reason
just unable to continue that for one of the qualifying reasons that
Congress put forth in the CARES Act, then I would expect that
person to be covered by what we are calling this PUA benefit for
the self-employed, if they are not covered by the ordinary system,
which they probably are not——
Senator WARNER. And that journalist could have been somebody
who was working at home, so they were freelance but working at
home. Thank you for that clarification.
And if you could address the domestic worker——
Secretary SCALIA. With the caveat, I think that is correct, Sen-
ator.
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Senator WARNER. If you could address the domestic worker, fair-
ly briefly, because I have one other point I would like to make.
Secretary SCALIA. Same answer, Senator. With the caveat, I
think that would probably be the case if one of those qualifying
conditions was met. Although, you know, domestic workers may ac-
tually be covered employees under State law, but I think they are
likely to be covered one way or the other.
Senator WARNER. Well, I know I have been working with the
group the Domestic Workers Alliance, and I think they will be
happy to hear your comments. And I look forward to trying to work
to make sure that in this area at least—where we ought to make
sure for these 20 million Americans nationally, these 10 million
who have already qualified in this pandemic—that the expansion
of this coverage ought to be maintained.
And I will just take my last 28 seconds—and I know I have tried
to make the case to you, Mr. Secretary—to make the case to my
colleagues on both sides of the aisle. I think we need more experi-
mentation with these portable benefits, benefits to attach to the in-
dividual, that move with them from gig to gig. There are five mem-
bers on this committee who embraced an experimentation on port-
able benefits, that we would try a variety of models.
And I particularly say to my Democratic colleagues, there are a
number of models that come out of Europe—Sweden, Belgium,
Denmark—where these portable benefit systems are actually ad-
ministered by labor unions and have become the methodology for
them to move into the 21st century. This is one area where there
is bipartisan agreement.
I hope, Mr. Chairman, we can continue to work on it in the next
bill, and that we go ahead and expand experimentation around
portable benefits, because I think we are looking at the workforce
of the future.
Thank you, Mr. Chairman.
The CHAIRMAN. Senator Hassan, by TV.
Senator HASSAN. Well, thank you, Mr. Chairman and Ranking
Member Wyden. Thank you, Secretary Scalia, for being here today.
As Congress responds to the impacts of COVID–19, one of the
main issues that I hear about from New Hampshire constituents
is delays in receiving unemployment benefits. New Hampshire is
one of several States still working to fully implement the expanded
unemployment benefits under the CARES Act. When issues arise,
I hope that the Department of Labor will continue to support the
State and help ensure that New Hampshire workers quickly re-
ceive the support that they need.
My first question, Mr. Secretary, is about the unemployment
benefits we have been discussing. As our country has responded to
COVID–19, expanded unemployment insurance has helped to en-
sure that workers have the financial support that they need when
measures such as stay-at-home orders are in place. As Senator
Casey mentioned, unemployment benefits also support workers
who themselves are sick or at an increased risk of the virus, help-
ing them afford to stay out of the workplace to protect themselves
and others.
So, Secretary Scalia, ‘‘yes’’ or ‘‘no,’’ do you agree that during this
unprecedented time unemployment insurance has been an impor-
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34
tant tool to support public health strategies to contain the spread
of COVID–19?
Secretary SCALIA. I do agree with that, Senator Hassan. And in
fact, in the first half of March we issued a guidance document,
even before paid leave was made available for employees of small
employers. In FFCRA, we issued a guidance document dem-
onstrating to the States how the unemployment insurance system
could be available to assist workers who had COVID or were caring
for somebody who did.
Senator HASSAN. Thank you——
Secretary SCALIA. So I do agree with that. And just one last——
Senator HASSAN. Quickly, please, because I have several ques-
tions.
Secretary SCALIA. I understand. We understand the difficulties
that the States have had processing benefits. We genuinely are
here to help. We have been in touch with all of the States, but if
we can do more, please have the folks in your State system let us
know, and we will do all we can.
Senator HASSAN. Well, thank you. And I just wanted to follow up
on your answer about the unemployment benefit being a public
health tool. Because, despite what we think the economy may or
may not look like in July, we do know that this pandemic will still
be with us. And we do know that that will present critical chal-
lenges for our workforce as they try to balance this new world.
Senator Stabenow talked about the capacity for employers to use
unemployment benefits to supplement part-time work, which may
in fact be very important for families where child care is still not
available or school may not be available, especially if we do not
provide more State and local aid as they face budget crunches.
So I just want us all to keep that in mind. I wanted to ask you,
too, Mr. Secretary, about the issue of expanded paid leave for many
workers, and you just referenced it a bit ago. In addition to ex-
panded unemployment insurance, Congress also enacted emergency
expanded paid leave for many workers. This leave includes 2 weeks
of paid sick leave and up to 10 weeks of additional paid leave for
parents whose children’s schools have closed.
Access to paid sick leave is an important public health tool to en-
courage workers to stay home if they are sick, without losing their
paychecks or possibly their jobs. The Department of Labor is
tasked with ensuring that workers are aware of their rights to paid
leave, but data has indicated that many workers who are eligible
for this leave are unaware of this new program.
Secretary Scalia, what additional actions will the Department of
Labor take to improve its outreach in education to workers regard-
ing their access to emergency paid leave benefits?
Secretary SCALIA. Senator, I will take a look at what guidance
we have on that currently. I will tell you that when FFCRA was
enacted, we engaged in a very intense campaign to provide guid-
ance, answer questions for workers and employers so that they
were familiar with the program. We put out a series of five, or
maybe even six Frequently Asked Questions to provide guidance.
We featured it prominently on the website of our Wage and Hour
Division, and we also very swiftly put in place rules to implement
that benefit. I will note that——
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Senator HASSAN. Mr. Secretary, my time is almost up. I appre-
ciate——
Secretary SCALIA [continuing]. We have recovered nearly
$650,000 for workers, and brought benefits to approximately 500
workers in our implementation of that program.
Senator HASSAN. Mr. Secretary—and, Mr. Chairman, I am going
to ask for your indulgence for just a moment——
The CHAIRMAN. Yes. You state your question, and he can answer
it, and then we will go on to the next one. We still have 10 people
here, so that’s at least 50 minutes.
Senator HASSAN. My question is this, and it is one I will follow
up on with the Secretary after the hearing, but I just want to put
the question on the record.
Why is it that we still need to have the Department of Labor do
more? It is because people are not aware of their paid sick leave
rights under the legislation. And I would like to follow up with the
Secretary about the issue of workforce training, because since 2001,
State Formula Grant funding levels under the Workforce Innova-
tion and Opportunity Act have fallen by 40 percent as adjusted for
inflation. So we are going to need to think about how our workforce
systems can help get workers who have been dislocated by COVID–
19 back to work, and what kind of additional Federal resources will
be necessary to support these workforce training and reemploy-
ment activities.
Thank you, Mr. Chairman, and thank you, Mr. Secretary.
The CHAIRMAN. Senator Enzi?
Secretary SCALIA. I am sorry, Mr. Chairman—just to respond
quickly. Again, we have a very extensive set of documents to ex-
plain to the American people how that program will work. I would
certainly be happy to look at it again. And with respect to help to
dislocated workers, in addition to all the things I mentioned ear-
lier, we actually have made dislocated worker grants to 40 States
in an amount of approximately $225 million.
The CHAIRMAN. Senator Enzi?
Senator ENZI. Thank you, Mr. Chairman. Thank you for doing
this hearing. And I want to thank Secretary Scalia for being willing
to answer questions.
I appreciate all the comments that there have been about the
$600 per week being temporary and all the discussion on that. Sen-
ator Grassley, you started off with three letters that you had re-
ceived, and one was from an employee, and two were from employ-
ers. They were all about the employees.
There are also some employers out there in small businesses who
are making less than their former employees who are on unemploy-
ment. I am appreciative of the effort that Senator Portman is mak-
ing to make some changes in that, and I appreciate all the answers
that you have given on that. I will maybe submit a couple of ques-
tions, but I will change the subject to something we have not
talked about yet.
It is concerning to me that my State of Wyoming was the target
for foreign fraud. How are you advising States to prevent fraud and
abuse by foreign entities? Is there a department plan to recover
any of the fraudulent payments? Does Congress need to help with
these efforts?
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Secretary SCALIA. Thank you, Senator Enzi. Fraud on the unem-
ployment system has always been a problem. I am pleased to say
that in 2019, for the first time since it has been monitored, we got
our improper payments rate, it is called, below the 10-percent tar-
get. So we were on a good trajectory. But the coronavirus obviously
has upended so many different things, and that included the risk
of fraud in the system.
There has been fraud. As you say, Senator, there have been high-
ly sophisticated criminal enterprises that have engaged in fraud on
the system. We are working with our Inspector General. We have
been working with other Federal agencies. We have been working
with the States.
There is something called the UI Integrity Center that the States
are working with. That center sponsors something called a ‘‘data
hub’’ for State information-sharing. So there are many different
mechanisms in place, and Congress did make $26 million available
to our Inspector General in the CARES Act to address this prob-
lem.
We will continue to work on it hard. We know it is real. And in
some cases it is interfering with the delivery of benefits to people
who are entitled to them. So we will stay on it.
Senator ENZI. Thank you. From the wide range of things that
you have to cover, as was pointed out in this hearing, thanks for
the great job you do.
Thank you, Mr. Chairman.
The CHAIRMAN. Senator Carper?
Senator CARPER. I would like to say, Mr. Secretary, welcome. I
want to stay on the point Senator Enzi just raised.
I spoke last week with our own Secretary of Labor at the Depart-
ment of Labor in Delaware, and the issue of fraud came up. He
mentioned foreign involvement, and he talked about a criminal ele-
ment in Nigeria, I think is what he said. And the amount of money
that may have been stolen, literally, by these folks—who appar-
ently are pretty smart—is in the billions of dollars.
And I would just ask as sort of a follow-up question with respect
to what Mike Enzi was just raising, I think you have said this, but
would you commit to provide GAO, and again the agency Inspector
General and others, with the information they need to conduct ef-
fective oversight with respect to the UI benefit?
Secretary SCALIA. We will certainly cooperate with any investiga-
tions that are being conducted as to that. We are, as I said, work-
ing closely with our Inspector General. I actually sent a joint memo
to all Labor Department employees, joint with the Inspector Gen-
eral, about a month or so, maybe 6 weeks ago, emphasizing the im-
portance of the integrity of the Department generally, but the In-
spector General and I also spoke particularly about the importance
of integrity in guarding against fraud in connection with the
CARES Act and unemployment insurance benefits.
You are right. There is a Nigerian ring, evidently, among others.
We received a letter from the Unemployment Insurance Commis-
sioner in Washington State just the other day. They believe they
have recovered hundreds of millions that had been misappropriated
through this criminal enterprise. But there are still very significant
challenges. I will work with GAO and the IG.
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37
Senator CARPER. Yes, please do. I urge you to work with GAO
as well. Thank you, very much.
A quick question. The unemployment rate in our country is high,
as you know; very high. The unemployment rate for folks who hap-
pen to be black or Hispanic is even higher. Any ideas on specific
steps the administration is taking to address this particular issue,
this particular challenge?
Secretary SCALIA. Well, as I mentioned earlier, until the corona-
virus hit, we had hit all-time lows for unemployment for African
Americans, for Hispanic Americans. There were also steps that the
President took that were very important to him, including estab-
lishing Opportunity Zones in impoverished neighborhoods, the
First Step Act, which was an important piece of criminal justice re-
form, but among other things made it easier for people who had
been in the criminal justice system to come back into the work-
place. Those will remain priorities.
I know how proud the President was of the job opportunities that
his economy was providing to minorities, and that will continue to
be a——
Senator CARPER. Mr. Secretary, I am going to ask you——
Secretary SCALIA [continuing]. Very important goal——
Senator CARPER. Mr. Secretary, I am going to ask you to stop
talking, all right? I have another question. Thank you.
Secretary SCALIA. Just answering your question.
Senator CARPER. You more than answered my question, thank
you.
The workforce retraining—this is a big issue. When I was former
Governor, I did customer calls. I used to do them every week, cus-
tomers large and small, and I asked them: ‘‘How are you doing?
How are we doing? What can we do to help?’’
And this was a time when we had maybe 150, 160 million people
going to work on a given day. And we had 6 or 7 million jobs where
nobody was showing up because the jobs that were needed, the
kind of skills that were needed, were not inherent in the people
who were looking for work.
That situation has been exacerbated now, and I was going to ask
you about this, but I have given a lot of thought to workforce train-
ing, retraining. It could be—oh, gosh, we have something in Dela-
ware where we actually train kids right out of high school for jobs
and careers that are going to be out there. We have labor unions
work with apprenticeship programs. We work with technical com-
munities in colleges. But there has got to be—and, you know, all
these businesses that are gone, they are gone. They are not coming
back. Folks who worked there do not have a job to come back to.
They may have skills, but they do not have the skills that are
needed for the jobs that are out there. And I think we need a
thoughtful, comprehensive approach that involves not just the Fed-
eral Government, not just State Governments, but community col-
leges and other nonprofits, to actually focus on how we help these
folks retool and retrain for the jobs that are going to be there in
the months and years to come. Any thoughts there, please?
Secretary SCALIA. I agree with much, and maybe everything you
said. I think that workforce training is important. We learned a
great deal in the economy that we had. One of the things that I
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38
really appreciated in that economy was that businesses were reach-
ing out more to train workers. Apprenticeships were thriving. Com-
munity colleges were playing a really important role.
So we learned a lot that I think we can now apply going forward,
because I do think that, although we will bring back to work mil-
lions upon millions of workers who were put out of work by the
virus, there will be others who do not go back to those jobs. And
I think we will want to apply some of the lessons learned, and you
described some of them. We will want to apply some of those les-
sons learned going forward, and I would be happy to talk to you
about it further.
Senator CARPER. That would be great. Thanks so much.
The CHAIRMAN. Okay; Senator Portman?
Senator PORTMAN. Thank you, Mr. Chairman.
And let me say, first of all, to my colleague and friend, Senator
Carper, I could not agree with you more. We already have a need
for worker retraining, because we did not have the kinds of skills
we needed to fill the jobs in our economy. And now we are going
to need them even more.
So the JOBS Act is a good way to do that, to allow programs to
be used for short-term training programs, and I think this is going
to be very important, and you are going to play a leading role in
that, I know, Secretary Scalia, because I know you have been in-
volved in training.
Let me just, if I could, talk for a second about how we got to
where we are—at 10 weeks into this unemployment insurance pro-
gram that was started in the CARES Act—and where we go from
here. We chose 600 bucks for a simple reason, and Senator Wyden
I think said it well when he said it was ‘‘rough justice.’’
It was rough justice for trying to make sure that people, on aver-
age, had wage replacement. But I think, I think speaking for every-
body, what we all were looking for was wage replacement. And
$600 is well above wage replacement for a lot of people.
The University of Chicago study that was cited earlier today
shows that 60 to 70 percent of the people on unemployment insur-
ance—making the $600 Federal addition to the State benefit—60
to 70 percent of them are making more on UI than they would
make in their previous jobs.
So there is this issue. And look, the last session I had with any-
body in Ohio was on Monday before I flew here. It was a small
business. And the first thing the guy said to me was what you hear
from small businesses when you do your NFIB conference calls,
which I do periodically, which is, ‘‘I am now finally able to reopen,
and we are starting to get business back. Things are going better,
but I can’t find people, and people are telling me they would rather
stay on UI because they can make more money there.’’
And with 60 to 70 percent of the people making more money on
UI than they make in their jobs, that is going to happen. I agree
that people actually want to go back to work. I think it is wrong
to say that people want to stay on UI. I think people like being at
work. But when they can make a lot more money not being at
work, it does create a disincentive.
I had a town hall recently, a tele-town hall—I am doing these
pretty much every week now—and a woman called in and said,
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‘‘I’ve got two daughters, one of whom is working and one who is
on UI. And the one on UI is making more than the one who is
working. And the one who is working is upset about that, because
they had had jobs that were comparable prior to this.’’
So I mean, this is a reality. We have to face it. But it was with
all good intentions, because we were trying to find the average
wage—which was about $600 per month additional Federal ben-
efit—to get the average wage so it would be comparable.
And so I think it was rough justice, but I think now we are in
a different situation. One, we have an economy that is starting to
grow. And the numbers for last month were really surprising. We
thought we would lose 71⁄2 million jobs, and we added 21⁄2 million
jobs. I mean, no one can say that is not great news. However, there
are still 21 million people who are on the unemployment rolls. It
is over 13-percent unemployment. For African Americans, it is even
higher, and Hispanics even higher. So we do have a huge problem
here. The $600 was necessary, in my view, to get us started in this.
But now we have a situation where the economy is starting to re-
open and people are looking for workers.
Second, remember that back then we really did not want people
to stay at work because we were encouraging people to go home.
In other words, we were shutting down the economy. Except for es-
sential businesses, we were actually encouraging people not to go
to work. And now we want to encourage people to work.
This is why I have come to this proposal I have been working on
for the past couple of months with you and other people, which is
to say, for people who are on unemployment making whatever the
State benefit is—usually about $360 on average from the State,
plus they are making the $600 Federal addition to that—for those
people who are on unemployment making more than they could
make at work, which is 60 to 70 percent of those people, why not
give them a bonus to go back to work?
That bonus could come out of the $600. That bonus—I suggest
it could be $450. Why? Because that is the amount which would
make people in this country—even if they were on minimum
wage—so anybody on minimum wage would be able to go back and
make just as much, if not more, in the private sector than they
could make on UI if they had this bonus.
For us, it would be a 6-week program. So it is a transition back
to work. I really like it because I think it gets people back to work
at a time when we need them in the economy, but also it is good
for workers. Work is where most people get their health care, right,
Mr. Secretary? Most people in America get their health care from
work, and they lose it when they lose their good job, unless you
have a great company that is furloughing them and keeping their
same health care. But that is rare.
Second, that is where they get their retirement, if they have a
retirement account. Typically it is a 401(k) at work. But also I
think the meaning of work is important to people. I think the self-
respect you get from going to work is important to people.
So we want to encourage people to go back to work. It is clearly
good for small businesses who are looking hard for workers right
now as they are starting to reopen, and that is good. And of course
it is good for the taxpayer because, think about it, instead of 600
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40
bucks it is $450, and the Federal Government saves money, but so
does the State government, because then the people are off unem-
ployment insurance and back on the payrolls—and they are actu-
ally paying taxes, by the way. We have been talking about the fact
that they are now paying taxes and contributing to the economy.
That alone, taking them off the Federal $600 down to $450, what-
ever the number is—Congress may choose another number—and
not having the 360 bucks on average State benefit, it is tens of bil-
lions of dollars in savings to the State Governments and the Fed-
eral Government, which is savings to the taxpayer. That is a win/
win/win: good for workers, good for businesses, good for the tax-
payer.
Now having said all that, what do you think about it, Mr. Sec-
retary? Don’t you think that makes sense in order to get people to
work?
Secretary SCALIA. I do think it makes sense to get people back
to work. We have to have an unemployment insurance safety net,
but for the reasons you gave, work is even better. And so I look
forward to, Senator Portman, speaking with you and others about
what we might do going forward. I am certainly not here to criti-
cize the CARES Act. I think the CARES Act is a really admirable
achievement by the U.S. Government during an extremely difficult
time. But if it was rough justice, let us find justice. Let us use
these weeks to make things even better. And I think we are in a
different situation.
Senator PORTMAN. Let us go over that a little bit. I would love
to find justice—in other words, to be able to say, what is wage re-
placement?
The CHAIRMAN. Senator Whitehouse?
Senator PORTMAN. But I do not believe that the UI systems
around the country—we will find out from the second panel when
they come up to talk—are capable of doing that. They are going to
want one flat number. They have had enough difficulty doing that.
Unfortunately, I think that is where we are.
So let us do something that makes sense to deal with the imme-
diate problem we have to get people back to work and provide an
incentive to do so. Thank you, Mr. Chairman.
The CHAIRMAN. Senator Whitehouse?
Senator WHITEHOUSE. Mr. Secretary, does the Department of
Labor have a specific counterproposal—Senator Portman’s or any
other—to ending, to extending the $600 benefit past July?
Secretary SCALIA. Senator Whitehouse, I do not have a particular
proposal that I would want to air at this hearing.
Senator WHITEHOUSE. Okay, I——
Secretary SCALIA. I certainly am interested in discussing what
steps might be taken. I have already——
Senator WHITEHOUSE. You answered my question.
Secretary SCALIA. I think it would help you to know that——
Senator WHITEHOUSE. Please, Mr. Secretary; you have tried to
talk over us through this whole hearing. That was a simple ques-
tion. Just let me go through my questions, would you, please?
The second question is with respect to the fraud investigations
on unemployment insurance. We are seeing in Rhode Island, and
other States, a fraud that looks like it is massive, coordinated, and
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41
perhaps driven from overseas. How much of a priority is inves-
tigating and remedying that fraud for your Department? High?
Low? Super-high? Give me a measure.
Secretary SCALIA. To complete my answer, because I am sorry I
had not completed my answer to your question, I had had a con-
versation with Ranking Member Wyden about this, what we might
do going forward, and I look forward to further——
Senator WHITEHOUSE. Mr. Chairman?
Secretary SCALIA [continuing]. Discussions along those lines.
Senator Whitehouse, with respect to fraud on the unemployment
insurance system, it is a very high priority for us. We recognize
that unemployment insurance fraud has always been a long-
standing problem in the system. We recognize that because of the
size, the prominence of the CARES program, it has become an
acute problem. So it is one that I am certainly personally spending
my time working with my staff to address, and I know you have
more questions, so I will not repeat the things I said earlier, but
we are working with our State and Federal partners——
Senator WHITEHOUSE. I am starting to see that you are having
fun here, and it has become a bit of a sport for you to filibuster
us and to kind of yuck it up. I do not think that is fair to us.
With respect to the OSHA guidelines related to COVID, what is
the difference between an OSHA guideline and an OSHA Emer-
gency Temporary Standard with respect to enforceability?
Secretary SCALIA. A ‘‘standard’’ is a legally enforceable rule,
which we already have a number of that we believe we can use for
enforcement with respect to COVID. We also have——
Senator WHITEHOUSE. But to be clear, the COVID-related guide-
lines that you spoke about earlier are not standards that OSHA is
capable of enforcing against. It is only if they overlap with another
pre-existing actual standard that you can enforce against. Is that
not a correct statement of the law?
Secretary SCALIA. That is, respectfully, not entirely true, actu-
ally. Guidelines that we issue, which are consistent with those
issued by the CDC and those adopted by industries, recommended
by unions and the like, establish a legal background in which I be-
lieve we can bring a general duty clause action if we need to.
The other difference in the guidelines and the standards——
Senator WHITEHOUSE. May I read you something from your
website? ‘‘OSHA guidelines are advisory, do not create new em-
ployer obligations, and are not the basis for citations.’’ And then
further down, it actually says, ‘‘The recommendations contained as
guidelines are not enforceable under the general duty standards ei-
ther.’’
So it looks to me like it is hard to enforce unless you make them
emergency temporary standards, so I am here to ask you to make
them emergency temporary standards.
Secretary SCALIA. Respectfully, I was the chief legal officer in the
Department previously, and as I said, guidelines can provide part
of the background for an action. The difference between a guide-
line——
Senator WHITEHOUSE. ‘‘Background’’ and ‘‘enforceability’’ are two
different things, are they not?
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Secretary SCALIA [continuing]. And a standard is the flexibility
a guideline gives us——
Senator WHITEHOUSE. Final point. There has been a lot of, I
think scorn heaped on the $600 a week benefit—which propped up
probably close to 40 million families now through this crisis—and
the people are ‘‘overpaid’’ and ‘‘idle’’ and all of that.
But just for context in evaluating that narrative, I would also re-
mind everybody who is watching this hearing that 43,000 Ameri-
cans who enjoy incomes over $1 million got a benefit from the
CARES legislation amounting on average to over $1.6 million
each—not for their businesses, but flowing back to their personal
tax returns. The amount that flowed back to individuals earning
over a million dollars each to their personal tax returns as a result
of this, $1.6 million on average for those 43,000 people, was over
$100 billion.
So let us just bear that in mind as we evaluate what it means
to a family struggling to get by, to have an extra $600.
I think we probably do need to rethink this program, but it
would help if we had a proposal from the Department of Labor.
Thank you. My time is up.
The CHAIRMAN. Senator Cantwell?
Senator CANTWELL. Thank you, Mr. Chairman.
Mr. Secretary, I represent a very big aerospace cluster. About
150,000 people are involved in aerospace, both working for Boeing
as a manufacturer, but also the supply chain. So we worked very
hard on getting the CARES Act to support activity that would get
the capital into those areas, and also to try to focus on what we
could do to protect essential workers.
I am sending you a letter today asking for Trade Adjustment As-
sistance for workers who are impacted at Boeing, and so I hope
that you will look favorably on that petition. I do not know if you
want to make any comments about that, but one of the issues that
I think we really have to think hard about is that we want to
maintain our competitiveness in aerospace.
These are highly paid jobs, and when people get laid off—because
obviously we have been impacted by this crisis, and the whole
transportation sector has been impacted—then those people who
get laid off may have a package that keeps them connected to the
company for a while. I was a big advocate of saying that critical
defense workers should have extra health-care benefit activity so
that when this crisis is over they would be more likely to come
back into the fold and that we would not lose these critical defense
workers.
As it is, we ran into a big roadblock. So much of the discussion
this afternoon has been around the $600 and extending that. My
question is really more on health care. What are we going to do to
keep critical workers in the sector that we would like to keep them
in after their 1 month of paid-for COBRA benefits runs out? And
we are now talking about aerospace engineers, that they are then
on the hook for paying for their health care themselves. They can
continue that COBRA benefit, but they pay for it themselves,
which again is a big out-of-pocket expense. So my worry is what
is going to happen to those aerospace workers is, they are going to
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find another job that has health care, because they are not going
to wait a year from now for the aerospace market to pick back up.
So what do we need to do? If you want to, comment on the TAA,
or the benefits of trying to provide assistance to aerospace manu-
facturing from trade adjustment, but also, what is your plan? What
do you think the plan should be for keeping critical workers con-
nected by having some sort of health-care benefit that is out there
and available in an affordable way?
Secretary SCALIA. I will certainly look carefully at the TAA let-
ter. I recognize that the Trade Adjustment Assistance Act is an im-
portant form of relief to industries and companies that have been
affected, and we will certainly take a look at that.
Senator CANTWELL. And I am saying they were affected before
this, basically. And the whole sector was affected because of trade
issues.
Secretary SCALIA. Yes. And by the way, I certainly share your
view that it is a very important sector for this country, for a num-
ber of different reasons.
With respect to health care, providing it is always important and
often a challenge. We extended the time that people would have to
elect COBRA benefits during the pandemic. So people had more
time to evaluate that option and, in the rush for everything else
going on, did not lose out on those benefits as a result of the sort
of ordinary deadlines that apply.
I will have to give further thought to mechanisms that might be
used to induce people back to aerospace jobs, perhaps a health-care
benefit, rather than having them go elsewhere that might be of less
importance to national security and the like. It is not an issue that
I have looked at, but I would certainly be interested in talking to
you about that aspect of this problem.
Senator CANTWELL. Well, it is one of the highest-paid manufac-
turing jobs that we still have in the United States, and I think the
second hundred years of aerospace could be a very big opportunity
as the rest of the world continues to grow economically in the fu-
ture and gets into aerospace.
So I would hope that we would figure out how to upskill these
workers, and also figure out this health-care benefit. Because if
they do not have health care, they are not going to stick around
waiting for us, even if they are on TAA. We have to figure out how
to get the health-care benefit to these workers and get them back
into aerospace and maintain U.S. competitiveness.
Thank you, Mr. Chairman.
The CHAIRMAN. Senator Young?
Senator YOUNG. Thank you, Mr. Chairman. Welcome, Mr. Sec-
retary; good to be with you. I appreciate you visiting today.
Most States, including Indiana, waived job search requirements
as it relates to unemployment insurance in order to encourage peo-
ple to shelter in place, to stay at home, to prevent further spread
of the coronavirus. But now, as all of our States begin, in varying
degrees, to reopen, employers are recalling their workers or hiring
new workers to get their businesses up and running and to try to
resume some semblance of normalcy.
But they are having difficulty doing so because of the additional
UI plus-up, which I know has been discussed at some length today.
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So what I am wondering, Mr. Secretary, is at what point States
will feel it is reasonable for workers to be expected to search for
work as a condition of receiving further unemployment insurance.
Is this something your Department has given some consideration
to?
Secretary SCALIA. Senator, thank you. And the work search re-
quirements are ones that are part of the unemployment law infra-
structure that the CARES Act was enacted on top of. And although
there were States that, for example, sought to waive the weekly
certification requirement, we have asked that that requirement
continue to be honored. I certainly agree that, especially as the
economy is now reopening, as jobs are becoming available, it is im-
portant that States begin applying the usual mechanisms to en-
courage workers to look for work.
We appreciate that it is a difficult balance for them. We still
want them also to be able to get payments out to people who need
them and are entitled to them. But we know now that millions of
jobs are reopening, and we want to get people back there.
Senator YOUNG. Can you give me some sense of how States are
approaching this? What timeline might they be looking at as it re-
lates to resuming the normal work search requirements, and what
expectations are being made of workers as they engage in this
work search in a somewhat different environment?
Secretary SCALIA. We expect them now to be applying the weekly
certification requirement they have. We appreciate that a few
weeks ago some wanted out of that for a period of time, but we
have asked them to comply with that requirement. And I think,
again, now it is taking on more value, more importance. Something
that I suggested to the Governors—I sent a letter to the Governors
within the last week talking to them really about these kinds of
questions, that there is still work to be done providing benefits for
the economy’s reopening. So there is now this new job of, for exam-
ple, having employers let employment commissioners know when
they are open for business or having the State workforce agencies
informed when employers are open for business, and working with
the people on unemployment to get them back to work.
We have these workforce agencies in the States to help people
make that transition. And I think now increasingly their services
are being called on, and we want them to do that job too.
Senator YOUNG. Excellent. Thank you.
So many Hoosiers have lost their jobs over the course of the
coronavirus, and many will not have a job to go back to. For others,
they will not have a job to go back to for some period of time. And
still others may find that they have created a new job for them-
selves, or they can find a new job that did not exist prior to the
pandemic. You may have spoken to this earlier. I know it has been
a long day for you, and I am appreciative of your presence here for
such a period of time. But do we know what jobs will not be coming
back post-pandemic and what jobs have been created as a result of
the pandemic?
Secretary SCALIA. That is a good question. This has been such a
challenging stretch for American workers that I hesitate to point
out the positives that have been there, but there have been some.
I mean, we have seen some companies hire in some cases hundreds
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45
of thousands of workers. Particularly some of the larger retailers
have done that. And I think we can imagine some areas that will
see a further growth as a result of some of the changes in lifestyle
that people are now making as a result of the virus.
There are other industries that are going to take longer, and we
know that. I have met with workers in the hotel sector, and busi-
ness owners in the hotel sector, and that is going to take longer.
Likewise, we know the sports industry will take longer. But I
think we can bring them back.
The CHAIRMAN. We have two questioners left. Before I call on
Senator Cortez Masto and Mr. Daines—we are not going to have
a second round, but I am going to, as a matter of privilege, give
Senator Wyden 2 minutes, and if he wants a response from you,
I hope you can respond in 2 minutes, because we are holding up
the second panel.
So, Senator Cortez Masto, by TV, I think.
Senator CORTEZ MASTO. I am here. Thank you.
Secretary Scalia, thank you. It has been a long afternoon, and I
appreciate you coming and answering all the questions.
Let me say, you were just touching on an industry that was hit
hard. I am from Nevada, the hospitality and tourism and gaming
destination. Unfortunately, we have the highest unemployment
rate in the country. And unfortunately, what we have seen in our
unemployment insurance, our Department of Employment, Train-
ing, and Rehabilitation is about to receive more than 500,000
claims for standard unemployment insurance and nearly 100,000
for pandemic unemployment insurance. And that is with a popu-
lation of just about 3 million people.
So can you talk a little bit about how you anticipate addressing
unemployment for the hospitality and tourist-based industry? I am
on Banking, and the chairman and I had this conversation. I asked
which industry was going to take the longest to bounce back, and
he referred to the hospitality industry.
So what are you thinking, for purposes of unemployment and
how it should be addressing the long-term unemployment that we
may see in the hospitality and tourist-based industries?
Secretary SCALIA. Thanks for the question. I spoke with Gov-
ernor Sisolak, I think just last week, about Nevada’s reopening. I
know that Las Vegas is now beginning to reopen, which is wonder-
ful news, but I know that it will be a process that takes place over
a period of time. And as I mentioned a moment ago, I do appreciate
that it is a sector of the economy that is going to be slower coming
back, unfortunately, than others.
I think that we are seeing the rest of the country reopen safely.
I just read that Disney, I think, is going to begin opening its facili-
ties, I believe later in the month. So I am hopeful that some of
these business places that depend more for business on large gath-
erings are not far behind, and the reopening in Las Vegas, NV can
also proceed more quickly.
But with that said, I appreciate that we do need to continue to
watch how these things develop over the next month or so, the next
few weeks, and evaluate whether there are additional steps that
have to be taken post-July 30th. And the circumstance that you
have in Nevada, I do believe is one that is going to warrant watch-
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46
ing and perhaps further discussion about how things are pro-
gressing and what steps might be needed for the benefit of the
workers and businesses there.
Senator CORTEZ MASTO. Such as extending unemployment insur-
ance for those workers?
Secretary SCALIA. I think that it makes sense to talk about the
situation that workers are in come the end of July, and what par-
ticular mechanisms—an unemployment piece could be one part of
that that I agree is worth discussing, particularly if you are able
to target it in certain ways.
Senator CORTEZ MASTO. Yes, and please know that part of our
industry too is that gig economy industry that includes our enter-
tainers, that includes those who are in seasonal stage group pro-
motions, and so for purposes of that industry, which is really the
new economy, I am curious what you are thinking for purposes of
the future—and even now, on how we address our unemployment
needs.
I understand Senator Warner said this is an area we should be
focused on. What are you doing to address this issue, because so
much of that is a new economy, and we should be looking at how
to provide unemployment. Many are misclassified, as you well
know, and so what are you looking at to address this new economy
and these workers?
Secretary SCALIA. Senator, the audio cut out just a little bit, but
I think you were asking about workers who are often treated as
independent contractors, or called gig workers, self-employed. And
as I mentioned earlier, providing unemployment benefits to them,
a form of unemployment benefit, in the CARES Act was an impor-
tant thing to be done, given how they were affected in much the
same way as many other workers.
I think there are other things that can be done to help people
in that segment of the economy. Something that we proposed—we
adopted a rule for what we called ‘‘association health plans’’ to
make it easier for the self-employed, as well as for people who work
for small businesses, to band together to buy health insurance.
Senator Warner earlier mentioned some ideas that he has for gig
workers. I think that is a segment of the economy that is really im-
portant. I think there are many workers out there who like the
independence that comes with having a job of that nature, but it
does make sense to talk about ways to adapt some of what we do
for workers in light of the particular line of work that those people
are in.
Senator CORTEZ MASTO. Thank you. I know my time is up.
Thank you, Mr. Chairman.
The CHAIRMAN. Thank you. And now, the Senator from Oregon
for 2 minutes.
Senator WYDEN. Yes; thank you, Mr. Chairman. I just want to
correct the record on some of the key issues.
First, when I talked to the Secretary last week on one of the key
questions of why we had to have the $600 a week supercharged
benefit, the Secretary said that the States still did not have the
ability to do full wage replacement, which I would have been happy
to do in the first instance. Today he said it seems like they made
a lot of progress. And I do not know what might have happened
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47
over the weekend, Mr. Secretary, but I think that is misleading the
committee, misleading the public, and on a key kind of question
which is, what to do going forward.
Because I had indicated—and I mentioned some of my colleagues
being open to this—that I am open to a variety of approaches. But
it does not help when we have misleading comments. And that was
the case in several other areas. Both myself and Senator Casey
asked about this question of whether an unemployed person could
turn down an unsafe job and continue to claim unemployment in-
surance. He said repeatedly it was a matter of State law.
We have been looking at it. It is not. When it is pandemic cov-
erage, then you have the capacity, as the Secretary of Labor, to
give the States guidance, which is what we have been asking you
about for the last 3 hours.
And finally, I was just stunned by this. You said that, well, isn’t
it great that we have all been able to agree on the pandemic cov-
erage, which we called the gig workers and the self-employed, and
the like. And I just went back and looked at the record, and the
fact is that the McConnell bill was eight lines long and it had noth-
ing to do with those workers. And it happened because people on
this side of the aisle said the program began in the 1930s and it
was time to modernize it and bring it into the next century.
We would like to work with you, but it does not help when on
key issue after issue—and I understand being lawyerly. I am a
lawyer in name only. I ran the legal aid office for the elderly. But
that is different than being misleading. And I think on too many
key issues today you were simply misleading, and I think it is
going to make our job harder, because we want to do a bipartisan
bill, which is actually what we came out of the committee room
with the first time before we got to the floor.
Thank you, Mr. Chairman.
The CHAIRMAN. If you want to answer, please do it in 2 minutes.
Secretary SCALIA. Thank you. Ranking Member Wyden, I hope
we can continue talking about different mechanisms that might be
available there.
The approach that I think I suggested to you when we spoke last
week was one which resembled in some ways what we discussed
in March, which was potentially involving the Treasury Depart-
ment in helping disburse benefits for unemployed workers. That ac-
tually is an approach that would have included the States, since
they have critical information.
With that said, I actually have learned more since you and I
spoke. We have had discussions with States. We have learned
more, and I confess I am, as I sit here now, more optimistic about
the capabilities that the States may have based on the conversa-
tions that we have continued to have. And so I look forward to ex-
ploring that further with you. But the more recent information that
I have gotten has been encouraging.
And then with respect to safe workplaces, I am sorry that you
do not feel that it is as clear as you would like, but as I said, we
want safe workplaces. We do not expect people to be forced back
to workplaces that are unsafe.
The unemployment standards are, as you know, State-adminis-
tered. We have provided guidance, I think including guidance re-
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48
garding at least some circumstances where we would expect work-
ers can safely return. But if we hear from States that that is an
area where they need further guidance, we will certainly have
those discussions with them. Thank you.
The CHAIRMAN. Mr. Secretary, you have had a long afternoon
here, and you have been at a well-attended committee meeting. All
but three members came to have dialogue with you. I thank you
for your patience, and I also appreciate the cooperation of our
members through all of this.
So I will excuse you now, and then, while our staff is putting up
the nameplates, I will start to introduce first Scott Sanders. Mr.
Sanders is the executive director of the National Association of
State Workforce Agencies. That is an organization of State work-
force system administrators. It goes by the acronym NASWA. Prior
to joining that organization, he served as Commissioner of the Indi-
ana Department of Workforce Development.
Next we will hear from an Iowan, Beth Townsend. Ms. Townsend
is Director of Iowa Workforce Development, appointed by Governor
Branstad, confirmed unanimously by the Iowa Senate, March 24,
2015. Previous to her present position, she was Director of the Iowa
Civil Rights Commission. Prior to that, she worked as an attorney
in West Des Moines, IA in civil rights and employment law. Ms.
Townsend also served as a member of the Judge Advocate Gen-
eral’s Corps of the U.S. Air Force. She retired from the Air Force
Reserves after 21 years of both active and Reserve duty.
Third is José Javier Rodrı́guez. Mr. Rodrı́guez is a member of the
Florida Senate, representing the 37th District, including Coral Ga-
bles, Pine Crest, Key Biscayne, and downtown Miami. And he has
been in the Senate since 2016. He previously served 2 terms in the
Florida House of Representatives.
Next, Les Neilly is president of the Neilly Canvas Goods Com-
pany in Pittsburgh, PA. Mr. Neilly runs a family-owned business
operating since 1940, which provides residential awnings and tarps
for commercial trucking and other uses. He has been able to bring
all of his employees back to work, which he will tell us about.
Then we will hear from Michele Evermore. Ms. Evermore is a
senior policy analyst for the National Employment Law Project.
Ms. Evermore joined that organization in 2018. Prior to that, she
worked in Congress for a decade in the Senate, and also was a staff
person for the House Committee on Education and the Workforce.
In those roles, Ms. Evermore worked to advance worker protections
and organizing rights, and to improve retirement security and a va-
riety of private pension plan designs, as well as Social Security.
I am sure the staff has informed everybody that if you have
longer than 5-minute statements that you want put in the record,
they will be put in the record.
And I will start with Mr. Sanders, then Ms. Townsend—well, the
way I introduced you. So let us go with Mr. Sanders.
STATEMENT OF SCOTT B. SANDERS, EXECUTIVE DIRECTOR,
NATIONAL ASSOCIATION OF STATE WORKFORCE AGENCIES,
WASHINGTON, DC
Mr. SANDERS. Chairman Grassley, Ranking Member Wyden, and
members of the committee, on behalf of the National Association of
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49
State Workforce Agencies, thank you for the opportunity to testify
and discuss States’ efforts to provide essential unemployment in-
surance benefits to workers who have lost their job due to the pan-
demic. Members of our association are State leaders of the publicly
funded workforce system, including the unemployment insurance
program. NASWA serves as an advocate for State workforce pro-
grams and policies, liaison to Federal workforce system partners,
and a forum for the exchange of information and practices. We are
nonpartisan, and our membership includes all 50 States, the Dis-
trict of Columbia, Guam, Puerto Rico, and the Virgin Islands.
The impact of the pandemic on the workforce is unprecedented
in my lifetime. During the Great Recession, the peak of the number
of claimants paid in January 2010 was 12.1 million. For compari-
son, a year ago for the week ending May 11, 2019, States only paid
1.6 million claimants. In sharp contrast, for the week ending May
16, 2020, States paid a total of 30 million claimants, which includes
10.7 million claimants in the new Pandemic Unemployment Assist-
ance program. These phenomenal increases in claims explain some
of the extraordinary implementation challenges States have faced
in processing and paying UI claims. No entity, public or private,
would reasonably have contingency plans in place for these sce-
narios. Yet our member agencies continue to work through these
overwhelming workloads tirelessly and with great dedication.
It has not only been the scope of the challenge, but simulta-
neously implementing with our members several new Federal pro-
grams we are charged to address, including the Federal Pandemic
Unemployment Compensation, which provides an additional $600
to each UI claimant. This program was implemented in all States
by the end of April. The Pandemic Unemployment Assistance pro-
gram is much more challenging because it requires UI payments to
self-employed individuals on a State-wide basis, something that
has never been done before. All States implemented this program
by the end of May.
Against this backdrop, I will highlight three of the key chal-
lenges that States are experiencing during this crisis: promoting in-
tegrity, trust fund solvency, and administrative UI funding. Our
members work hard to promote integrity in the unemployment in-
surance program. Through NASWA’s UI Integrity Center, States
share best practices. They receive assistance in reducing improper
payments, and recently States are accessing the Integrity Data
Hub. The Integrity Data Hub plays an integral role by creating a
suspicious act repository with questionable email domains and IP
addresses, multi-State cross-matching, and fraud-alerting. States
are acting quickly to utilize this tool. These cross-collaborative
State efforts will continue to enhance NASWA’s and its members’
ability to promote nationwide efforts around the integrity of UI
claims.
Trust fund solvency is the second major challenge for States.
During the Great Recession, 36 States depleted their trust funds,
resulting in cumulative borrowing of $51 million from Federal gen-
eral revenues. Trust fund balances are rapidly depleting. States’
trust fund balances totaled $76 billion at the end of 2019 and have
dropped to $52 billion as of the end of May. Since March, 29 States
have seen their trust fund balances decline by more than 25 per-
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50
cent. Adding to this concern, States have already collected approxi-
mately 65 percent of their tax revenue for 2020. For the remainder
of the year, benefits paid will far exceed deposits, exacerbating the
declining trust fund balances. With these lower trust fund bal-
ances, the States can expect significant increases in the UI tax
rates in many States.
There are two potential options for Congress to consider in avert-
ing this impending trust fund crisis. Congress could enact legisla-
tion to forgive trust fund loans made to States this year or next,
or Congress could direct a Federal payment to State trust funds
that could be sent by a Reed Act distribution, which was done after
9/11.
Finally, States need additional UI administrative funding for op-
erations and IT systems. States have mobillized new call centers;
hired, borrowed, and outsourced staff; and purchased or modified
existing IT systems to address the pandemic. However, the cumu-
lative years of underfunding have affected States’ abilities to main-
tain staff and make capital investments, specifically in IT re-
sources.
We urge Congress to address the immediate needs to provide
funding for State administration and IT operations and update the
basic methodology of the administrative funding process.
In closing, NASWA and our members look forward to continuing
to work with you on these important issues. Thank you for pro-
viding this opportunity to testify.
[The prepared statement of Mr. Sanders appears in the appen-
dix.]
The CHAIRMAN. Thank you, Mr. Sanders. Now, Beth Townsend
of Iowa.
STATEMENT OF BETH TOWNSEND, DIRECTOR,
IOWA WORKFORCE DEVELOPMENT, DES MOINES, IA
Ms. TOWNSEND. Thank you, Chairman Grassley, Ranking Mem-
ber Wyden, and members of the committee, for the opportunity to
share with you a boots-on-the-ground view of the impact of the
COVID–19 pandemic on a State workforce agency. I have included
written information regarding the facts and figures behind IWD’s
response to the pandemic, and I refer you there for specific infor-
mation.
A few key points I would like to highlight include that Iowa has
a generous unemployment benefit program. We provide 26 weeks
of benefits per year, with a range of payments from $87 to $591
per week, depending on the claimant’s wages and number of de-
pendents. And we do not have a waiting week. The average weekly
benefit during the pandemic is approximately $300 per week. Iowa
began reopening at the beginning of May. In order to keep employ-
ees safe in the workplace, employers are taking necessary steps to
protect their employees and customers. Iowa State law provides
that employees who believe their workplace to be unsafe can quit
their job and still be eligible for unemployment benefits.
Additionally, PUA provides benefits for those who are in or car-
ing for individuals in high-risk categories, or who have lost child
care or transportation. We have strongly encouraged open commu-
nication as a first step in helping employers and employees to de-
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51
termine who, how, and when employees can be returned to work
safely.
In addition to providing for the safety of employees in the work-
place, employers are dealing with the collateral consequences of the
FPUC payment. A review of our claims shows that when our State
benefits are combined with the FPUC benefit of $600 per week, 79
percent of Iowans who have received unemployment benefits since
March 15th have earned more on unemployment than our average
weekly wage. This is not an issue of low wages in Iowa; it is the
impact of the additional money. Iowans who received the maximum
State benefit and FPUC are earning the equivalent of $30 an hour
on unemployment. Even the average weekly benefit of $300 plus
FPUC results in the equivalent of $22.50 an hour.
This has resulted in very awkward conversations between em-
ployers and employees. We have heard that they are being asked
not to recall their employees until the end of July. Employees are
asking to be laid off in order to collect the benefits. Employers who
have been able to remain partially open have received complaints
from employees who continue to work because they see it as unfair
that they are working and their peers are not, and they are staying
home and earning more in UI benefits. Employers who took advan-
tage of the Paycheck Protection Program often received complaints
from employees who do not want to be recalled because they were
making more on unemployment.
While employers understood and agreed with the reason for a
flat rate for the entire country at the time the CARES Act was
passed, I urge you to take the time now to consider the impact of
such payments and find a path that provides a safety net in States
where the recovery is slower but is not a drag on States that are
recovering faster. Employers are telling us in Iowa that the FPUC
benefits should be allowed to expire to make sure they are able to
quickly recall and restart operations. If FPUC benefits are ex-
tended, I urge you to craft legislation that is not one-size-fits-all.
Six hundred dollars a week invested in Iowa goes much further
than it does in States where the cost of living is significantly high-
er.
Please consider tying the availability of benefits to the State’s
unemployment rate so that once the State falls below the rate, the
benefits end. Or consider a significantly reduced flat rate for a
short period of time. Please limit the calculations a State workforce
agency must perform to pay our Federal benefits. A flat rate for all
those eligible for a single program is absolutely essential to being
able to implement the program quickly and efficiently. Regardless
of the age of the UI system a State uses, these are all new pro-
grams that have to be developed and tested before claims can be
paid. Thus, trying to implement a percentage of wages, or max-
imum wages as a percentage of benefits received, would require in-
dividual review of each claim.
I would ask you to consider a benefit like a payroll tax holiday,
which would be easier to implement; would benefit everyone in the
workforce, including those who remained in the workforce through-
out; and would not run through the workforce system. It would also
provide an incentive to those returning to the workforce by less-
ening the impact of going off FPUC payments by allowing employ-
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52
ees to keep more of their wages. If a new unemployment benefits
program is created, please consider a prospective date of implemen-
tation. This would give USDOL time to provide the necessary guid-
ance to State workforce agencies, and time to develop a program
before it is deployed, as well as manage the expectations of people
receiving the payments.
In closing, I recognize Iowa is a smaller State and does not have
as many challenges as other States in assisting those who have lost
their jobs due to the pandemic. However, I also think Iowa is
unique in that we are a State that knows the value and necessity
of collaboration. And we are stronger together. From the beginning,
we have benefited from Governor Reynolds’s strong, steady leader-
ship. I also want to thank the team members at IWD who have
worked so hard and have been so dedicated and professional, and
who have remained committed to helping the citizens of Iowa.
Thank you, Senator Grassley and members of the committee, for
the opportunity to share this information with you. I look forward
to answering any questions you may have.
[The prepared statement of Ms. Townsend appears in the appen-
dix.]
The CHAIRMAN. Thank you, Beth. Now, Senator Rodrı́guez.
STATEMENT OF JOSÉ JAVIER RODRÍGUEZ, STATE SENATOR,
FLORIDA SENATE, MIAMI, FL
Mr. RODRÍGUEZ. Chairman Grassley, Ranking Member Wyden,
honorable committee members, I address you as a State legislator
serving the Florida Senate. My name is José Javier Rodrı́guez. In
these unprecedented times, with the CARES Act, you have done a
great deal of good. And for that, I thank you on behalf of the con-
stituents I serve back home.
Florida entered this crisis with one of, if not the least prepared
unemployment systems. No State provides a fewer number of
weeks. We are near the bottom in weekly benefits, capped at $275,
and have major gaps in eligibility. Add to that an application and
payment system infamous for its failures—and how persistent
those failures are, having endured unchanged through several gu-
bernatorial terms, successive audits, and prior Federal interven-
tion.
The CARES Act lifted my constituents when Florida’s system
alone would not have. The PUC program adds $600 a week
through July. By design it goes right to out-of-work Americans who
spend it in their communities on necessities. It is easy to admin-
ister. And that is a significant benefit in States like Florida with
so many problems getting benefits paid.
Ricardo, 56, a hotel bellman for 81⁄2 years before his layoff, is a
diabetic who loses health insurance this month. He wants to get
back to work in an industry that has not returned, and wanted me
to tell you, quote, ‘‘The $600 is necessary for me to survive, includ-
ing to pay for medications. I have paid my taxes since I was 14,
been working for decades, and never collected unemployment. This
is not a luxury; it is a necessity.’’
Karen, 30, worked in marketing at a casino for 9 years and hopes
to return, but looks for work in the meantime. She wanted me to
tell you, quote, ‘‘My fear is that me and my 9-year-old daughter
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53
will end up homeless without this. I waited for over a month to re-
ceive Florida’s unemployment, and honestly, $275 a week is just
not enough. The Federal aid is important to help us for all we do
as taxpayers.’’
Randi, 47, is the mother of an 8-year-old boy and a 5-year-old
girl. A recruiter who owned her own business and needs the econ-
omy to recover for work, she was able to file in late March but only
just received her first payment last week. She wanted me to tell
you, quote, ‘‘The $600 has become vital to my family for basic needs
like food and utilities, and finally being able to buy my daughter
a toy. It seems simple, but we have been in quarantine since
March, and I have not been able to buy my children anything.’’
With the CARES Act, you also shored up a highly successful lay-
off aversion program. Businesses want to do the right thing and
often need help, like Bernie, a small business owner that we as-
sisted. He employed 17 people before the crisis and should avoid
layoffs under that program.
On top of design flaws coming into the crisis, Florida’s system
continues to be slow, unreliable, and inept in general—and in its
deployment of the CARES Act in particular. The Department of
Economic Opportunity administers unemployment. For hundreds of
thousands of Floridians, DEO’s system was inaccessible for at least
the first half of the crisis, punctuated by unmet, ever-changing
goals and seemingly never-ending mishaps so bad that Florida was
the only State paying out less than it received during this period.
Leah, 63, worked part-time for an airline. A recent survivor of
lung cancer who could not perform her job remotely, she could not
apply because the system crashed daily for weeks. Were it not for
assistance from our office to adjust the date of her claim, she would
have lost over a month of benefits.
The ordeal is like the ancient military punishment of running the
gauntlet. Many, many thousands still have not made it through. No
response. No reasons. No assistance from DEO. The failures work
a special hardship on people, adding needless anxiety to economic
pain. A bipartisan group of us field a bulk of the calls. Each has
a list of critical cases to informally bump up when we hear things
like, quote, ‘‘I’m struggling to maintain a positive attitude, and my
wife is afraid that this could be the death of me. Please help. I’m
desperate.’’
Florida remains an outlier in deploying the CARES Act. Of those
deemed ineligible for traditional unemployment, only about one-
fourth end up qualifying for the catch-all PUA program, a rate far
below other States. It also appears that the State of Florida has
only paid out about half of the $600 weekly benefits available to
Floridians. This experience should serve as a lesson to other States.
States that shrink, starve, and ignore their unemployment systems
one day may have their State legislators delivering such remarks.
Federal oversight is needed over States’ unemployment systems,
along with resources to modernize their infrastructure. CARES Act
programs ought to remain in place until recovery has reached all
sectors. Otherwise, for communities like mine, I fear it will set us
back in our path to recovery.
Thank you.
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54
[The prepared statement of Mr. Rodrı́guez appears in the appen-
dix.]
The CHAIRMAN. Thank you, Senator. Mr. Neilly?
STATEMENT OF LES NEILLY, PRESIDENT,
NEILLY CANVAS GOODS COMPANY, PITTSBURGH, PA
Mr. NEILLY. Good evening, Chairman Grassley, Ranking Member
Wyden, and the other distinguished members of the Senate Fi-
nance Committee. Thank you for the invite, and for allowing me to
be here this afternoon, or this evening. It is an honor and a privi-
lege for me to represent small business owners across our great
country, and to express my experiences regarding the extra $600
a week Pandemic Unemployment Compensation enacted as part of
the CARES Act bill.
I know I am not alone, as countless other small business owners
have had similar experiences. My name is Les Neilly, president
and majority owner of Neilly Canvas Goods Company, a fourth-
generation family business founded in 1940. We are located in
Pittsburgh, PA, where we manufacture tarpaulins for trucking and
industrial use, and we also make, install, and service commercial
and residential fabric awnings. We have a total of 11 part-time and
full-time employees between our two locations in Pittsburgh and
Maryland.
Our employees make between $14 and $21.25 per hour, in addi-
tion to the benefits that I describe in my full written testimony.
With the passage of the CARES Act, the extra $600 a week of un-
employment compensation amounts to $15 an hour based on a 40-
hour week. That alone pays our lowest paid employee more than
they make working a 40-hour week, and all they have to do is sit
at home.
Pennsylvania Governor Wolf announced the shutdown of all non-
essential businesses on March 19th, effective immediately. Since
the trucking industry is essential, we were able to continue to oper-
ate that side of the business. However, due to the lack of orders
from our customers, we laid everyone off effective March 23rd. We
had enough orders to call two employees back to work for Monday,
April 6th, and were able to call two additional employees back later
that week. On April 24th, two employees individually asked to see
their pay stub, as all of our employees are paid by direct deposit.
Once they reviewed their pay stub, they stated that their co-
workers who were still at home laid off were making more money
than those employees who were working, and that was not fair.
One of those individuals told me that they and their spouse were
going back on unemployment, and the couple did not show up for
work on April 27th and 28th. The other individual asked if it was
possible to have a rotating schedule with the employees who were
still laid off so everyone could participate in getting the extra $600
a week, instead of their co-workers who were laid off the entire
time. They stated they knew I was trying to run a business, under-
stood that I had to make tough decisions, but they were missing
out on the extra $600 per week the Federal Government mandated
for the laid-off workers, and they wanted to share in the pot of
gold.
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We applied for a Paycheck Protection Program loan, and the
money was deposited in our payroll account on Tuesday, April
28th. Once the PPP money hit, I called all the laid-off employees
and told them to report to work on April 29th. The couple who de-
clared they were going back on unemployment discovered they
were not eligible for 2 days’ worth of unemployment and a partial
of the $600 a week, costing them 2 days of wages, which is another
ramification of this bad policy.
We instituted a $20 per-day bonus for each day the employees
worked through the end of June, retroactive to when we called
back the first two employees. We did this as an attempt to ease the
resentment of the people who worked versus the laid-off employees.
Since everyone was called back to work, employee morale has
seemed to be improving.
May I suggest, as a business owner and someone who, like many
other small business owners who have experienced similar situa-
tions, do not pay someone more money than they make in a 40-
hour work week? Pay the laid-off workers the full amount they
earn in a week to make them whole and nothing extra.
Paying someone laid off more than they make in a week for un-
employment compensation is rewarding them for being laid off, and
penalizing an employee who is helping the company survive and
move forward because they are working. Running a small business
or any sized business is hard enough on a daily basis without hav-
ing to deal with situations created by Congress that put business
owners in the position to mitigate resentment between employees.
Employees who are working to help keep the business afloat feel
frustrated and angry that their laid-off co-workers are reaping re-
wards bestowed upon them by elected representatives, and less
than 10 percent of these elected officials own and operate a busi-
ness and understand the ramifications this policy could and has
created. Further, I am concerned that small business owners who
survive this historic downturn will be saddled with high unemploy-
ment taxes as a result of this policy.
Thank you for allowing me to express my experiences regarding
the extra $600 a week unemployment compensation. I appreciate
the opportunity to appear in front of the Senate Finance Com-
mittee representing small business owners, and I hope you consider
my testimony when contemplating future legislation to extend the
CARES Act unemployment compensation and the amount paid to
laid-off workers on a weekly basis.
I will be happy to answer questions at a later time.
[The prepared statement of Mr. Neilly appears in the appendix.]
The CHAIRMAN. Thank you, Mr. Neilly. Now we go to Ms. Ever-
more.
STATEMENT OF MICHELE EVERMORE, SENIOR RESEARCHER
AND POLICY ANALYST, NATIONAL EMPLOYMENT LAW PROJ-
ECT, WASHINGTON, DC
Ms. EVERMORE. Good evening, Chairman Grassley, Ranking
Member Wyden, and members of the committee. I am grateful for
the opportunity to testify today. And as a fellow Iowan, I am par-
ticularly thankful for Chairman Grassley’s great work on this
issue.
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I am Michele Evermore. I am senior researcher and policy ana-
lyst with the National Employment Law Project. In this moment
in history, it is easy to focus solely on the ways in which our lives,
the world, and the national economy feel out of control. As gaps in
benefits for unemployed workers have taken center stage, we must
remember that the CARES Act you enacted is having a dramatic
and positive effect on tens of millions of people who are out of
work, particularly for workers who are paid low wages. These bene-
fits are saving lives. Compounding centuries of structural racism,
the unemployment crisis is affecting communities of color most dra-
matically. A recent Washington Post poll showed that 16 percent of
black workers reported being laid off, as well as 20 percent of
Latinx workers. At the same time, 11 percent of white workers and
12 percent of workers from other racial groups reported being laid
off.
Pandemic Unemployment Assistance is helping both middle-
class, self-employed workers and lower-paid workers—often mis-
classified as independent contractors—to weather an economic
storm that has left them stranded in a largely shut down economy.
Pandemic unemployment compensation is an essential benefit in
this moment, particularly because so many States have lowered
their unemployment insurance benefit levels. They no longer pro-
vide counter-cyclical stabilization during a recession.
Please refer to my written testimony for many examples of how
this benefit is making a huge difference to workers. It does create
a disincentive to work, as we have seen with the recent decline in
unemployment numbers. We should not overlook how critical it is
for workers to maintain a connection to work right now. For so
many people, there is more to a job than a paycheck. In these un-
certain times, workers want stability, and their jobs may be the
source of health-care benefits and retirement security.
Finally, re-employment bonuses are not the answer. They are
based on the premise that workers are not looking hard enough for
work, when work may not even be there to find. Workers and em-
ployers benefit from an unemployment system that gets workers
back to the right job, not just any job. Employers who want to
bring workers back part-time as they start back up should consider
work sharing to bring workers back but still allow them to get a
UI benefit.
Policymakers need to learn the lesson of the Great Recession.
Many families and communities never recovered. The response to
the last recession did not inject enough money and was not sus-
tained enough. A robust, continued program will keep workers in
place and ready to resume employment once it is safe. We simply
cannot pretend that health and economic conditions will just dis-
appear in a few months.
For all its potential to help workers and stabilize the economy,
the UI system does face challenges. It does not reach enough work-
ers, and it does not provide enough wages, with only 27 percent of
unemployed workers getting a benefit that only replaced about 45
percent of income last year. Worse, during the Great Recession
black workers were on average 13 percent less likely than white
workers to receive benefits, and Latinx workers were 4 percent less
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57
likely. And all States struggled to get these programs up and run-
ning.
How did a program that could do so much good struggle so
much? First, UI administration is underfunded. In 2020, Federal
administrative funding for UI was $2.14 billion. Back in 2001, that
funding was $2.21 billion. Given increases in the cost of living and
the growth in the working population, that represents a big reduc-
tion. At the same time, the highest number of new claims for any
single week in history before this crisis was 695,000 in October of
1982, as the Secretary mentioned. That is in contrast to new claims
of 3.3 million for the week ending March 21st; 6.6 million the fol-
lowing week; 5.2 million the week after that; and initial claims in
the millions every week since. The fact that UI systems did not col-
lapse entirely under the weight of the demand is a testament to the
dedication of UI administrators and staff across the United States,
but substantial additional emergency funding will be necessary.
Since the last recession, States also cut benefits by reducing du-
ration and adding confusing barriers to access. Systems have been
calibrated to prevent benefit overpayments at the expense of pay-
ing earned benefits, causing erroneous denials and false fraud ac-
cusations. That slows benefit payments in a crisis.
Finally, any steps taken to reopen the economy must ensure that
worker health and safety are paramount. Workers receiving UI
cannot refuse suitable work and continue to get benefits. However,
workers are allowed to refuse unsuitable work. As requested by
more than 20 members of the Senate, ETA should make it clear
how Federal requirements ensure suitable work does not include
unsafe work.
To move forward, we need to establish a way to increase benefit
duration as the economy calls for it, rather than rely on ad hoc ex-
tensions that could come erratically, force States to continually re-
program their systems, and end abruptly.
Ranking Member Wyden has proposed a good way to scale bene-
fits, as have Senators Reed and Bennet. I look forward to working
with you to build on the success of the programs this committee de-
veloped to meaningfully help the people most hurt by the economic
crisis this pandemic created.
[The prepared statement of Ms. Evermore appears in the appen-
dix.]
The CHAIRMAN. This is how we will finish the day out. First of
all, I believe that it will just be Senator Wyden and me asking
questions. Senator Wyden wanted two rounds, so I will give him
the last 10 minutes of the meeting. But since other people are not
here—just in case you are not accustomed to how the Congress
works—a lot of members who cannot be here submit questions for
answering in writing. So if you get those, I would ask you to re-
spond in writing, and as quickly as you can after you receive those
questions.
So I think I will probably just use 5 minutes.
Ms. Townsend, in your testimony you noted that Iowa has
worked with employers to prevent layoffs by promoting the Iowa
Voluntary Shared Work program. This program allows employers
to reduce hours instead of laying people off, and those with reduced
hours can receive a partial UI check. What are some of the things
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58
your agency has done in Iowa to make businesses aware of this op-
portunity? And I will follow that up with another question.
Ms. TOWNSEND. Thank you, Senator Grassley. Yes, we have been
working hard from the beginning of the pandemic to educate em-
ployers about the availability of the Voluntary Shared Work pro-
gram, as we call it here in Iowa. When we started the pandemic,
we only had a few employers with about 800 employees taking ad-
vantage of the program. We are currently at over 183 employers
with over 8,400 employees.
We started with having webinars with employers that we re-
corded starting March 17th, with question and answer information
about the program. It was not the only thing we talked about in
the program, but it was a share of that program. We posted those
videos online. We had a few other webinars that also discussed the
Voluntary Shared Work program. We also provided training to our
staff, who were answering calls and working with employers about
the programs, so they could also answer questions about the pro-
gram as well.
We have a very robust COVID–19 web page, and we have pro-
vided a fact sheet about the program on the COVID–19 web page
to spread the information. My deputy, Ryan West, has been giving
interviews and talking to economic developers and alliances across
the State, and providing information and education about the pro-
grams. So we have done an extensive amount of outreach across
the State to be able to educate employers about the benefits of
that.
The CHAIRMAN. I think you have answered my second question,
but let me ask it anyway, and you can say you do not have any-
thing to add, if you do not.
So it goes beyond Iowa, this question. How can we make sure
more employers across the country take advantage of the oppor-
tunity to keep more workers in their jobs?
Ms. TOWNSEND. I think it is a matter of providing more outreach
and education through the different State agencies.
The CHAIRMAN. Okay; thank you.
Now, Mr. Neilly, thanks for sharing what it is like to be a small
business owner right now. Your family business has weathered a
lot, I am sure, since it began in 1940. And you mentioned some of
those challenges in your testimony. It is also great to hear about
the pay and benefits that you offer your employees, including the
daily bonus you paid to support them as they returned to work.
A question: you make a powerful point in your testimony, saying
the $600 payments are, quote, ‘‘penalizing an employee who is
helping the company survive,’’ end of quote. Some might say you
should just call the State UI agency and report them so that they
lose unemployment.
What kind of a spot does that put you in? Others say—wait, be-
fore you answer that question—others say you should simply dou-
ble your wages. That is really easy for them to say—kind of a ques-
tion to you, right? If this $600 were continued to next year, how
do you think that would affect your business and other businesses
like yours?
Mr. NEILLY. Well, first of all, as far as the unemployment situa-
tion goes, fortunately I did not have to make that decision because
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59
all of our employees did come back to work once I called them to
let them know that we got the PPP money. As far as doubling
wages, you know, our business is down about 35 percent right now,
so I do not know how anyone can just make that type of a state-
ment without knowing the goings on and how the business climate
is for the country.
Some businesses are doing very well that do the PPP-type prod-
ucts, and other businesses are struggling, as we are. So I feel that
we offer competitive wages, plus the benefits, and to try to increase
those wages substantially in this current economic time is not fea-
sible at this time.
The CHAIRMAN. Ms. Evermore, I do not have a question for you,
but where did you go to high school in Iowa?
Ms. EVERMORE. Fort Dodge Senior High.
The CHAIRMAN. No kidding. Well, welcome. I am sure you go
home a lot.
Mr. NEILLY. Excuse me, Mr. Chairman——
The CHAIRMAN. I thought you were done. I am sorry.
Mr. NEILLY. There was one other question that you had that I
did not address yet. As far as the $600 being continued till the end
of the year, I cannot say whether that would effect us or not. There
is the possibility, due to the current downturn in our business with
the pandemic situation, that if the business does not increase, we
may end up having to lay off employees once the PPP money ex-
pires.
So it would be good for the employee who is laid off, but again
it is not good for the rest of the people who are continuing to work
who are not benefiting from that. So we may have to try to look
at a shared work program where we rotate, as someone said, which
I did not consider in the past but could possibly consider in the fu-
ture.
The CHAIRMAN. Okay. Now, Senator Wyden for two turns.
Senator WYDEN. And I will not go a full two rounds, Mr. Chair-
man. Thank you for your courtesy.
Thank you all for your patience. About 31⁄2 hours ago, or some-
thing along those lines, I made a point that I think is really crit-
ical, and that is that everybody wins when the workers can go back
to safe workplaces. And so what we are trying to do is think
through how to do that. And let me, if I might, start with Scott
Sanders. Mr. Sanders, you are out in cyberspace somewhere. Is
that right?
Mr. SANDERS. That is correct, Senator.
Senator WYDEN. Wonderful. So you represent the association of
State officials who handle these unemployment issues. The central
question in the $600 a week debate that we have been thrashing
through here for hours on end is that I and others on our side
wanted 100-percent wage replacement. That was what we called
for, and that has always been our first choice.
Secretary Scalia said the States could not do that. So, after days
of being at an impasse, we came up with this idea of rough justice.
Now all through the afternoon when Secretary Scalia was here, he
was zigging and zagging on the question of what the States were
capable of actually doing. And since you are the point person for
the States, I thought it would really be helpful if you could just
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60
give me a direct answer to the question, is it not still the case that
it would be difficult for most States to implement 100-percent wage
replacement for each worker?
Mr. SANDERS. So this may sound like a bureaucratic answer, but
that is a reality under the current state of the UI systems across
the U.S. So any change would take time. It would also affect the
retroactivity of claims processing. The other challenge is that earn-
ings data lags as it comes into State agencies, so you actually do
not know what you are replacing for each worker.
I also do not know how you would do that on self-employed indi-
viduals. Also, I think even a simple change without proper lead
time for States to design, test, and implement will be challenging.
And then you also have the challenge of communicating this
change to the public.
So implementation of something like this would vary greatly
from State to State. But I believe that if any change has to be
made, our members would prefer a flat dollar amount as the easi-
est thing to do.
Senator WYDEN. Okay, so it still would be very difficult for
States—with all of those factors that you described, it would be
very difficult still for most States to implement 100-percent wage
replacement. And I am not going to ask you to take us through the
nuances of the law again.
Ms. Evermore, thank you for all the terrific advocacy work that
you have done. And I have a couple of questions for you.
If you look at what Congress did in the CARES Act to super-
charge unemployment benefits, in your view would there have been
a quicker, more efficient way to get the desperately needed relief
to people who need it?
Ms. EVERMORE. No. The unemployment insurance system was
really the best system in place to quickly ramp up benefits and get
benefits out the door. This is a system that is designed to respond
to recession. There really was not any other existing system in
place that could have gotten benefits out in the way that UI did.
Senator WYDEN. Then I would just like for the record, because
you have these years of expertise on various kinds of reform pro-
posals, to get your thoughts on the trigger idea, this idea of tying
future benefits to actual economic conditions in real-world markets.
And one of the reasons I was interested in it is, I have seen various
Republican leaders—and one of my colleagues, a senior Republican
member of the leadership, who wrote an op-ed in The Hill publica-
tion—saying that the basic proposition of sort of tapering off bene-
fits as the economy got better was the kind of thing that might be
appealing as a way to break the gridlock.
I have been interested in this. Senator Bennet has been inter-
ested in this. We have colleagues who have pursued various ap-
proaches to this notion of tying the benefits to conditions on the
ground. What is your thinking on that?
Ms. EVERMORE. I think that your proposal, as well as Reed’s and
Bennet’s proposals, are very logical. I think they make a lot of
sense, in part because these benefits really should be tied to an
economic trigger rather than a series of ad hoc proposals. But even
in the current crisis, they are extra important. It is really impor-
tant to have automatic triggers right now because what we really
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61
cannot have with this level of unemployment is for systems to be
turning on and turning off, and turning on and turning off, as Con-
gress makes sort of ad hoc decisions. The computer systems are al-
ready as stressed as they could possibly be.
Senator WYDEN. I think that makes the equity case and the effi-
ciency case, along the lines of exactly what I want to do, because
this is obviously a complicated area. I told the Secretary I would
be interested in some of the ideas of trying to have a more flexible
Federal role with respect to administering benefits. But a trigger,
based on what you just responded to my question with, is some-
thing that would make sense that we could go to fairly quickly, and
I really appreciate that answer.
Mr. Rodrı́guez, thank you for your leadership. Congresswoman
Shalala told me about your expertise, and I can see why. It looks
to me like you all have had a lot of these problems down there for
years, and I am just curious. In the 14 months between when Gov-
ernor DeSantis was warned of the system’s flaws and the arrival
of the pandemic, what was done to prevent the system’s failure, if
anything?
Mr. RODRÍGUEZ. Senator, thank you for your question. Obviously,
thank you for acknowledging Representative Shalala’s leadership
in our area as well. The short answer is, nothing. The system that
we have in Florida has suffered by willful neglect for a long time.
And when I say ‘‘willful,’’ none of the flaws in the system—and
there are a range of flaws in the system—was hidden.
It was the subject of a number of Department of Labor audits
back in 2013–2014. There was a Department of Labor intervention.
There was audit after audit, and the most recent one in 2019 was
on the Governor’s desk. And we recently also learned that on his
way into office Governor DeSantis was advised of the strategic
threat that the weakness of our unemployment system in Florida
with the DEO posed to the State of Florida. I mentioned specifi-
cally, I spoke of individual constituents in the Miami-Dade area
and how they have been impacted by the failures of the system.
But there are other aspects of this as well. Employers who have
had to lay off workers are also, frankly, horrified watching their
former employees have to go through eviction, et cetera, or face
eviction once our eviction moratorium is lifted.
And the last thing I will mention is, the State of Florida is leav-
ing millions of dollars on the table. We are implementing the PUA
program——
Senator WYDEN. How many millions of dollars, in your view, is
the State of Florida leaving on the table?
Mr. RODRÍGUEZ. It is hard to estimate. Others probably will do
a better job. But if I could very quickly paint the picture with re-
spect to the PUA program, obviously the program that covers inde-
pendent contractors, gig workers, and the self-employed. Our rates
of bringing people onto the program when they are ineligible for
traditional unemployment are very low, slightly more than a quar-
ter. I checked the number this morning. It was about 28 percent.
That rate is far below most States. And another thing, when you
look at the benefit amounts the State of Florida is awarding, the
State has been awarding the minimum benefit level as a default,
and it created an extremely cumbersome system for employees—ex-
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62
cuse me, not employees, for people who are 1099 workers—to be
able to establish how much they are owed above the minimum. So
cumbersome that—and this is very recent—they are literally en-
couraging people to fax in documents, right? I mean, this is 2020.
And they just came out with their process, literally in the last cou-
ple of days, as to how gig workers would prove up the benefits that
they are owed beyond the absolute minimum of $125.
And so, in addition to the fact that we are not bringing people
onto the program quickly enough, or about half the rate of other
States, the State of Florida is also defaulting to about half the ben-
efit level. And so we are probably, you know, leaving $3 in Wash-
ington for every $1 we draw down.
Senator WYDEN. Thank you, Mr. Rodrı́guez. And to all of you,
you have been an excellent panel. We have been at it, as I say, for
it looks like close to 4 hours at this point.
I would only say, as we wrap up, Mr. Chairman, that I hope that
the big takeaway from this discussion is that most Americans want
to work. They understand that that is the path to climb up the eco-
nomic ladder. And I have been visiting with a lot of unemployed
people, and all of them come back and say, ‘‘Look, I can have a
much better life if I am in the workforce.’’ And there is a dignity
and an appreciation of what it means to be able to work for a pay-
check.
And let us get this help—and we are going to need it after July
31st—to people who genuinely cannot otherwise pay rent or pay for
groceries. And I would like to try to find a path to do that in a bi-
partisan way.
I disagreed with the Secretary. The first thing the Secretary did
after we passed our original bill was, he went on Fox Business, and
I was going to see what he had to say about our new legislation,
and he said our big concern was that unemployed people were
going to be dependent on government help.
I just do not agree with that. I hope that every member of this
committee will see that the overwhelming number of Americans ap-
preciate work, have a strong work ethic, see that as the path to get
ahead. I know that you and I have talked about that in the past,
and I hope that is going to be the foundation of our work going for-
ward.
The CHAIRMAN. Yes. I told you we were done when Senator
Wyden was done, but Senator Portman will be on TV for 5 minutes
of questions.
Senator Portman?
Senator PORTMAN. Thank you, Senator Grassley. Can you see me
on TV?
The CHAIRMAN. Yes; there you are.
Senator PORTMAN. Well, first of all, I appreciate you letting me
join you virtually. I was there with you, as you know, for a couple
of hours and enjoyed the back-and-forth. And I think everything
that Senator Wyden just said is consistent with us figuring out a
way to move forward here, where we are not providing a disincen-
tive to work by allowing people who are on unemployment insur-
ance to be paid more than they would get paid if they went to
work. And as we know from the studies, it looks like 60 to 70 per-
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63
cent of the people who are on unemployment insurance are making
more than they would if they went back to work.
The Congressional Budget Office says that, moving forward, that
is going to be even a larger percentage, up to 80 percent of the peo-
ple getting more. So we have to figure this out. And, Mr. Neilly,
you talked a little about this. One thing I found that was inter-
esting in your testimony that I would like you to expand on, if you
could briefly, is a reason this is a problem. Because some people
say, well, you know, under the unemployment insurance systems
being enforced in some States, you cannot stay on unemployment
insurance if your employer offers you a job. You have to have this
search for work requirement.
And I know Secretary Scalia has talked about that in the past.
But the reality is, if you have employees who are making a lot
more on unemployment insurance than they are going back to
work, as an employer you are very hesitant to ask them to come
back to work. And I think you talked about that; you surely did in
your testimony. Can you talk about how this disincentive makes it
hard for an employer to ask them to come back to work and per-
haps hurt the relationship with that employee?
By the way, not too long ago, only a few months ago, many em-
ployers were just desperate to get workers and did what they could
do to keep them, with the low unemployment rates and wage
growth, and now we are in a different situation.
But can you talk a little about that? Why is this a problem to
have this big disparity?
Mr. NEILLY. Senator Portman, the $600 extra—obviously all the
employees who were on unemployment were happy to be on unem-
ployment at the time because they were getting the extra money
that was helping with whatever expenses they had.
I did not really feel any bad feelings about calling people back
because they were now coming off of unemployment and getting
the extra $600. I called them back because of the PPP require-
ments of using 75 percent of the money within an 8-week period.
And if you keep people on unemployment, then obviously your em-
ployee rolls and payroll are not going to be as high as they could
be. And then you would end up having to pay back the money as
a loan, versus the possible forgiveness of the money.
So because of that, I didn’t have any real issue in calling people
back. I was very happy that no one refused to come back, and ev-
erybody, when I talked to them, was in agreement and said, ‘‘Fine,
we will see you tomorrow.’’ So it was a little bit a relief that I did
not have any pushback from any of them.
Senator PORTMAN. You also said in your testimony that people
came back, and then they went back to UI because they could
make more money under UI.
Mr. NEILLY. That is correct. We did have one of the married cou-
ples, one of them talked to me at the time, and they just arbitrarily
thought they could go back on unemployment. Unfortunately, in
the conversation that we were having, I totally missed that com-
ment. And when they did not come to work on the Monday and the
Tuesday following payday that Friday, and they did not call off, I
was a little bit concerned.
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I had no idea what was going on. And here I found out later that
they thought they could go back on unemployment and declare
themselves to be unemployed and be able to participate and try to
get some of that extra $600 per week.
Senator PORTMAN. Well, let me just say, in talking to employers,
particularly employers who have had a tough time getting and
keeping employees during an economy that was very different than
the one now, to force people to come back is bad for them, person-
ally. And I am certainly hearing that, and it sounds like you have
had that situation with somebody coming and then wanting to go
back because they can make more.
In Pennsylvania, by the way, it is basically $26 an hour for un-
employment, equating to about $200 per week, compared to what
the wage is. So, you know, there is the disparity there.
I also wanted to talk to Ms. Townsend about the question of
whether a flat benefit amount is the only thing that you can do.
I think that is what we are hearing from, certainly Ohio and from
other UI offices around the country.
We asked that question this morning. Senator Wyden asked it;
I asked it. Basically it got the response that we aren’t sure from
the Secretary, but what is your response to that, Ms. Townsend?
In your testimony you mentioned the flat benefit amount would be
absolutely essential to being able to complete the program effi-
ciently. How long do you think it would take you to have an indi-
vidualized calculation where you would do a customized calcula-
tion, as Senator Wyden and I were talking about today, where we
want to have wage replacement? Would that be possible for you to
do in an efficient and quick manner?
Ms. TOWNSEND. I am sorry, Senator Portman, I have had a really
hard time hearing your question. I think you were asking about
how long it would take us to be able to implement a payment pro-
gram that was based on a percentage or maximum——
Senator PORTMAN. That is correct. In other words, looking at
your testimony, it sounds like you are saying a flat benefit like
$600, or whatever the number is, is all that you can do efficiently
and quickly. Is that correct?
Ms. TOWNSEND. That is correct.
Senator PORTMAN. As opposed to a customized benefit that would
relate to allowing people to get their full wage replacement?
Ms. TOWNSEND. That is correct. If FPUC is extended, but let’s
say the amount is changed in reflection of the difference between
$600 and $300 in Iowa, it would be a fairly simple change to go
from $600 to $300, and there would probably be no delay in pay-
ment of benefits. If it is changed to a wage replacement for individ-
uals, those claims would have to be individually reviewed. That
would take several months for us to be able to implement, so prob-
ably what would happen is, come the first of August, the FPUC
payments would end. We would continue to pay the regular State
benefits, and then we would take a few months to be able to de-
velop and implement the program that would reimburse people for
the 100-percent wage replacement. They would probably get a ret-
roactive payment——
Senator PORTMAN. You have answered my question. That is
great.
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Ms. TOWNSEND. Okay.
Senator PORTMAN. For the next 7 or 8 weeks you are going to
have countless employers across the country like Mr. Neilly who
are trying to reopen and get back to normal, but if you have the
$600, it is going to be tough. And then what happens after July
31st?
I think this is an argument, again, for a back-to-work bonus. It
is a flat rate. I would like it to be customized, but that cannot be
done as a practical matter. And Scott Sanders is nodding his head,
representing all the States.
But what do you think about that, Mr. Sanders, if you had a flat
rate as a return-to-work bonus? Could that be administered?
Mr. SANDERS. [Garbled speech.]
Senator PORTMAN. Mr. Sanders, I can hear you. Can you hear
me?
[No response.]
Senator PORTMAN. Ms. Townsend, why don’t you answer that
question for him, for Iowa.
Ms. TOWNSEND. Sure. What I would say is, if that’s a program
that is run through the unemployment system, that would be a
new program, and if it paid a bonus for people who remained in
the workforce, if that is what the question is, that would be a new
program.
If you are talking about paying a bonus to people who go back
to work, that essentially is going to be the same thing.
Senator PORTMAN. It is 600 bucks now Federal.
Ms. TOWNSEND. Okay.
Senator PORTMAN. If you go back to work, you take some of that
with you, and the amount I have talked about is $450. But what-
ever the amount is, it is a flat rate. Is that something that is ad-
ministrable?
The CHAIRMAN. After you answer that, can you sum up, Senator
Portman?
Senator PORTMAN. Yes, Mr. Chairman.
Ms. TOWNSEND. It is, but I think it would take—it would take
several weeks, if not a couple of months, to be able to implement.
Senator PORTMAN. Thank you, Mr. Chairman. I appreciate it.
The CHAIRMAN. Okay. The CARES Act has provided unprece-
dented help to the American people in these challenging times.
Many of the policies are still ramping up, and we have yet to see
the full impact of what was passed a few months ago.
I am thankful to our witnesses, including the Secretary of Labor,
for the information they have provided about the CARES Act UI
provisions, and, as a result, I think we all have a better picture of
what has worked and what has not worked.
The clear message I have heard is that any future legislation
that is considered must be focused on getting people reconnected
with work. And I would surely think that that would be some sort
of a compromise between what Senator Wyden is talking about and
what Senator Portman is talking about. We had the best economy
that we have had in 50 years before COVID–19, and everything we
do should be focused on returning to that situation as quickly as
possible.
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It is also important that we coordinate our efforts, as there are
many policies other than the UI that Congress has passed to help
those affected by the virus pandemic. We also need to keep a close
eye on the economy. We are beginning to see signs of improvement.
We hope it continues. And we hope we can avoid the risk of more
business closures and more long-term unemployment.
We tend to be learning about the pandemic and the economy af-
fected by it. Every day we are learning more about how to prevent
it, how to treat it, how to cure it. And as we do, I know all Ameri-
cans will work together to get our economy growing again.
Thank you all very much. The meeting is adjourned.
[Whereupon, at 6:13 p.m., the hearing was concluded.]
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APPENDIX
ADDITIONAL MATERIAL SUBMITTED FOR THE RECORD
PREPARED STATEMENT OF MICHELE EVERMORE, SENIOR RESEARCHER
AND POLICY ANALYST, NATIONAL EMPLOYMENT LAW PROJECT
Good morning, Chairman Grassley, Ranking Member Wyden, and members of the
committee. I am grateful for the opportunity to testify today. I am Michele Ever-
more, a senior researcher and policy analyst with the National Employment Law
Project (NELP).
NELP is a nonprofit research, policy, and capacity building organization that for
more than 50 years has sought to strengthen protections and build power for work-
ers in the U.S., including people who are unemployed. For decades, NELP has re-
searched and advocated for policies that create good jobs, expand access to work,
and strengthen protections and support for underpaid and jobless workers both in
the workplace and when they are displaced from work. Our primary goals are to
build worker power, dismantle structural racism, and ensure economic security for
all.
30 MILLION WORKERS HAVE HAD ACCESS TO A TRANSFORMATIVE BENEFIT
A record number of workers have lost their jobs as a result of the pandemic. Fri-
day’s jobs report showed a surprising 13.3-percent unemployment rate, lower than
feared, but still an alarmingly high rate which would be much higher if it included
workers misclassified as temporarily out of work or not actively seeking work due
to relaxed work search requirements. Moving forward, we must continue to work to-
gether to fill the gaps in coverage, increase equity, and maintain benefits for those
who are already eligible, until the economy sufficiently improves. NELP applauds
the bold action this committee and Congress has taken, but more can and must be
done.
In this moment in history, it is easy to focus solely on the ways in which our lives,
the world, and the economy feel out of control. As gaps in benefits for unemployed
workers have taken center stage, it is important to remember that the CARES Act
you enacted is having a dramatic and positive impact on tens of millions of people
who are out of work and must stay home to care for their families. Particularly for
workers who are paid low wages, these benefits are the difference between not mak-
ing ends meet and being able to afford to stock up and remain home safely. These
benefits are saving lives.
Compounding centuries of structural racism, the unemployment crisis is affecting
communities of color most dramatically. A recent Washington Post-Ipsos poll from
May showed that 16 percent of Black workers reported being laid off, as well as 20
percent of Latinx workers. At the same time, 11 percent of white workers and 12
percent of workers from other racial groups reported being laid off.1 Because of the
massive racial wealth gap in the United States, workers of color have less savings
to tide them over until they find their next job. The Brookings Institution reports
that Black families have one-tenth the wealth of white families.2 For all who are
1 Tracy Jan and Scott Clement, ‘‘Hispanics are almost twice as likely as whites to have lost
their jobs amid pandemic, poll finds,’’ Washington Post, May 5, 2020, https://www.washington
post.com/business/2020/05/06/layoffs-race-poll-coronavirus/.
2 Kriston McIntosh, Emily Moss, Ryan Nunn, and Jay Shambaugh, ‘‘Examining the Black-
white Wealth Gap,’’ The Brookings Institution. February 27, 2020.
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out of work, but particularly for Black, Latinx, and Indigenous workers and other
workers of color, unemployment benefits are a vital lifeline in this time of crisis.
Take, for example, Alicia, a worker from the District of Columbia who was laid
off in March. Alicia needed to be home to handle distance learning for her two teen-
age children. When her older daughter was deemed an essential worker, Alicia pro-
vided care for her granddaughter. She applied for unemployment insurance and re-
ceived UI and the $600 Pandemic Unemployment Compensation (PUC) benefit. ‘‘I
don’t know how I would be able to do anything without the $600,’’ she said. ‘‘I
reached out to my mortgage lender and they allowed just one month of deferment.
If it was just UI, it would have been much harder to pay my bills.’’ And when her
employer made it possible to work from home, she returned to work, ending her UI
and PUC benefits.
In addition to the benefits provided by State unemployment insurance (UI) pro-
grams, Pandemic Unemployment Assistance (PUA) is helping both middle-class self-
employed workers and lower-paid workers in the gig economy (many of whom are
misclassified as independent contractors) to weather an economic storm that has left
them stranded in a largely shutdown economy, with social insurance systems other-
wise ill-equipped to provide them help in an emergency.
It is crucial to this discussion that we understand that we are not dealing with
a cyclical or even structural recession like ones we’ve seen in the past few decades.
We are dealing with an international pandemic that has forced us to shut down our
economy for the sake of saving lives. Our State, local, and Federal Government have
taken extraordinary but necessary measures to protect public health. Although we
are slowly starting to reopen our economy, we cannot pretend that every thing will
go back to normal in the next few weeks, months, or even years.
A robust program of continued unemployment insurance will help ease this eco-
nomic turmoil by keeping workers in place and ready to resume employment once
it is safe to do so. But it will also provide a morally necessary lifeline to workers
who will not be able to return to work for whatever reason, including because their
employers have gone out of business, because they must reopen slowly for safety’s
sake, or because the demand is not there yet for the good or services they offer. We
cannot pretend that the coronavirus and the economic disaster it has wrought will
simply disappear in a few months. The Federal Government has a responsibility to
make sure that people do not suffer exacerbated economic pain or face undue risks
to their health and safety.
UNEMPLOYMENT INSURANCE HAS ALWAYS BEEN A KEY ECONOMIC STABILIZER
Unemployment insurance is the only ongoing program we have that was built to
distribute funds during an economic crisis. It was created in 1935 with the hope of
stabilizing the economy by giving workers buying power when they find themselves
involuntarily unemployed. UI succeeds in achieving several key goals:
• Help workers make ends meet. UI is intended to simply provide workers
a benefit to help them make ends meet and support their families when they
are out of work.
• Support people in their job search. UI helps to make sure that workers
have the time and support they need to find a job that meets their skills and
interests—one for which they are well suited and are likely to succeed in.
• Keep people connected to work. UI helps employers by making it possible
for workers to maintain an connection to work, by providing access to employ-
ment services and encouraging work search, or through work-sharing.
• Uphold living standards. UI reduces the likelihood that periods of high un-
employment will drive down wages for everyone. It helps people uphold their
standard of living so that, as a society overall, we have wage stability.
• Preserve economic stability. In times of economic downturn, UI provides
macroeconomic stability by maintaining overall worker buying power, which
in turn supports businesses and the economy. In the last recession, econo-
mists Alan Blinder and Mark Zandi looked at the effect UI had on the econ-
omy and found that every dollar paid out in UI generated $1.61 in economic
activity.
NEGLECT OF UI PROGRAMS AND SYSTEMS HAS HINDERED THEIR EFFECTIVENESS IN
THIS CRISIS AND IMPLEMENTATION OF CARES ACT PROGRAMS
For all its potential to help workers and to stabilize the economy, the UI system
also faces serious challenges. Shamefully, the UI program historically excluded do-
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69
mestic and agricultural workers, which had a disproportionate impact on Black
workers, and some of those exclusions remain in effect today—an area that obvi-
ously demands reform.
Moreover, State UI does not reach nearly enough unemployed workers, necessi-
tating the enactment of the PUA program. UI also fails to provide adequate wage
replacement, especially in a period of government-mandated mass unemployment,
so Congress enacted the Pandemic Unemployment Compensation (PUC) program.
Finally, all States struggled mightily to get these new programs up and running.
Now, we must ask ourselves, how did a program that could do so much good in pre-
cisely a crisis like this one struggle so much?
First, we must acknowledge the massive decline in UI administrative funding,
and lack of designated funding for the States to invest in and maintain a 21st-
century information technology (IT) infrastructure. In 2020, national administrative
funding for UI was $2.14 billion. Back in 2001, that funding was $2.21 billion. Given
increases in the cost of living and the growth in the working population, that marks
a dramatic reduction over time.
Using a simple inflation calculator on the Bureau of Labor Statistics website, the
2001 funding level is roughly $3.2 billion in today’s dollars. At the same time, the
highest number of new claims for any single week in history before this crisis was
695,000 in October of 1982. That is in contrast to new claims of 3.3 million for the
week ending March 21st of this year, which were followed by 6.6 million in the 2
following weeks, 5.2 million the week ending April 11th, and continuing initial
claims in the millions every week since.
This dramatic and instant decline in employment is unlike anything we have ever
seen. Historically, recessions have a much slower onset and much lower new claims
every week. The fact that UI systems did not collapse entirely under the weight of
the demand, particularly given the low funding levels they had to work with, is a
testament to the enormous dedication of UI administrators and staff across the
United States.
It is also important to understand that our unemployment system is a patchwork
of various State systems, some of which have been modified in recent years to inten-
tionally make it more difficult to access benefits. Indeed, just last summer, NELP
published ‘‘Are Unemployment Systems Still Able to Counter Recessions?’’ detailing
how many State systems were not recession-ready precisely because of the steps
they had taken to make their UI systems impenetrable to so many unemployed
workers.3
As States have moved to largely online processing, many have created systems
that are inaccessible to workers on the other side of the digital divide, workers with
limited English proficiency, and people with disabilities. For instance, as NELP out-
lines in its prescient 2015 report on the Florida unemployment system, titled ‘‘Ain’t
No Sunshine,’’ the U.S. Department of Labor’s Civil Rights Division ruled that Flor-
ida’s system was discriminatory and inaccessible.4 An example of this unequal ac-
cess is Florida’s procedure for directing calls needing translation services: the proce-
dure was to ask claimants in English what language they needed services in, but
to speak slowly. The system also had no TTY or other assistive services for callers
with disabilities.
State legislatures, pressured by business interests and looking to reduce the num-
ber of people eligible for unemployment insurance, have turned to a variety of ben-
efit restrictions, including: (a) dramatically reducing duration of benefits; (b) nar-
rowing the definitions of qualifying separation events; (c) increasing the amount of
wages workers need to earn to qualify for UI; and (d) imposing stricter, yet no more
effective, work search requirements. In addition, many States have narrowed work-
ers’ access to UI benefits by implementing technologies that may limit accessibility
of the application processes.5
3 Michele Evermore, ‘‘Are State Unemployment Systems Still Able to Counter Recessions?’’,
National Employment Law Project, June 6, 2019.
4 George Wentworh and Claire McKenna, ‘‘Ain’t no Sunshine: Fewer Than One in Eight Un-
employed Workers in Florida Is Receiving Unemployment Insurance,’’ National Employment
Law Project, September 15, 2015.
5 George Wentworth, ‘‘Closing Doors on the Unemployed: Why Most Jobless Workers Are Not
Receiving Unemployment Insurance and What States Can Do About It,’’ National Employment
Law Project. December 2017. Michele Evermore, ‘‘Are State Unemployment Systems Still Able
to Counter Recessions?’’, National Employment Law Project, June 6, 2019.
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As a result, the nationwide percentage of jobless workers receiving UI last year
was only 27 percent, and as low as 9 percent in North Carolina, as compared to
36 percent across the country before the onset of the Great Recession. In States like
Florida, Georgia, and North Carolina, where State legislatures slashed the duration
of available benefits far below the standard 26 weeks, the rates of unemployed
workers receiving UI were below 15 percent, or half the national average.
The decline in UI recipiency also reflects a dramatic increase in workers facing
erroneous denials of their benefits by State UI agencies. According to U.S. Depart-
ment of Labor, Employment and Training Administration (ETA) data on erroneous
denials, the denial error rate for separation reasons in 2017 was 17.44 percent,
while that error rate in 2007 was only 8 percent.6 Similarly, in 2017, 17.54 percent
of benefits were erroneously denied for nonseparation reasons, while in 2007, the
improper nonseparation denial rate was only 9.9 percent.7
Part of this increase in erroneous denial has to do with the fact that systems have
been over-calibrated to prevent over payments at the expense of paying appropriate
benefits. States have programmed their computer systems to pause applications at
every decision point, which can generate multiple eligibility determinations and de-
nials. As we have seen, that is going to slow down benefits getting to the public
when there is a crisis.
Overconcentration on suspicion of fraud, especially when not coupled with a cor-
responding focus on employer fraud, worker misclassification, and UI system errors
and failures, can wreak havoc on UI programs. For example, as part of the 2011
unemployment insurance reforms passed in Michigan, the State dramatically in-
creased fraud detection efforts and penalties. When the State upgraded its informa-
tion technology system, it added algorithms that over-flagged claims for fraud. That
system, MiDAS, flagged at least 37,000 workers for fraud, with a staggering 93-
percent inaccuracy rate. Workers impacted had to pay back four times the benefits
they received plus 12-percent interest, and many were driven into personal bank-
ruptcy.8
The Department of Labor must examine why there is such a stark increase in er-
roneous denials of benefits over the past decade and should impose checks on States
that are routinely mischaracterizing processing errors as claimant fraud.
DOL MUST ISSUE COMPLETE AND ACCURATE GUIDANCE ABOUT WORKERS’ RIGHT TO
REFUSE TO RETURN TO UNSAFE WORK; IF IT FAILS TO DO SO, CONGRESS MUST ACT
Any steps that States take to reopen their economies must be done with the ut-
most care for worker health and safety. No worker should be expected to return to
a workplace where the employer does not implement sufficient measures to safe-
guard employees against exposure to COVID–19.
This is both a workers’ rights and a public health issue. If workers are forced to
go back to unsafe conditions, employers’ negligence could result both in workers get-
ting sick and in COVID–19 spreading further throughout the community, prolonging
the duration of the pandemic and the number of people being infected, while also
exacerbating economic problems in the future. Rushing to reopen and forcing work-
ers back to unsafe environments will only lengthen the duration of the crisis and
worsen long-term economic conditions—particularly for underpaid workers of color
and women of color who are suffering higher rates of infection and mortality in this
pandemic due to systemic racism related to healthcare and employment.
Workers receiving unemployment insurance are not permitted to refuse ‘‘suitable
work’’ and continue to get benefits. However, workers are allowed to refuse unsuit-
able work. As requested by more than 20 members of the Senate,9 the Employment
and Training Administration (ETA) must make it clear that suitable work does not
include unsafe work, referring to situations where the employer has not taken the
minimum precautions set forth by the Centers for Disease Control and Prevention’s
COVID–19 workplace guidelines, particularly if the individual is an older worker,
6 U.S. DOL Employment and Training Administration website, https://oui.doleta.gov/
unemploy/.
7 Calendar Year 2007 Benefit Accuracy Measurement Data Summary, https://oui.doleta.gov/
unemploy/bam/2007/bam-cy2007.pdf.
8 Michele Gilman, ‘‘Did a Flawed Algorithm Drive Welfare Recipients to Suicide?’’ The Na-
tional Interest, February 18, 2020.
9 U.S. Senate Committee on Finance, May 19, 2020, https://www.finance.senate.gov/ranking-
members-news/wyden-democratic-colleagues-press-trump-administration-to-protect-workers-from-
choosing-between-health-financial-security.
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71
immunocompromised, or more vulnerable to infection in some other way (e.g., be-
cause of a disability, or if the worker is caring for a vulnerable household member).
ETA has thus far failed to issue clear guidance on the issue, which contrasts with
helpful COVID–19 suitable work policies recently issued by California, Connecticut,
Colorado, North Carolina, Texas, and other States.
Virtually every State UI law is clear that an offer of work that exposes a worker
to an unreasonable degree of risk to their health or safety is, by law, unsuitable.
For workers collecting regular UI, the Federal ‘‘prevailing conditions of work’’ provi-
sion applies (26 U.S.C. Section 3305(a)(5)(B)), which all States must incorporate into
their UI laws. This provision, which dates back to the Social Security Act of 1935,
prohibits a State from denying UI to a worker who refuses work if ‘‘the wages,
hours, or other conditions of the work offered are substantially less favorable to the
individual than those prevailing for similar work in the locality.’’ Here, the issue
is whether the health and safety ‘‘conditions of work’’ are sufficiently serious to pose
an unreasonable threat to the worker which, in turn, suppresses the working condi-
tions of other workers in the labor market.
For workers collecting Pandemic Unemployment Assistance (PUA) under the
CARES Act, the Federal ‘‘suitable work’’ regulations governing the Disaster Unem-
ployment Assistance (DUA) program apply to protect workers against returning to
work that is unsafe to themselves, their families, or to the public. The regulation
(20 CFR 625.13(b)(2)), which corresponds to the State ‘‘suitable work’’ laws, provides
that ‘‘a position shall not be deemed to be suitable for an individual if the cir-
cumstances present any unusual risk to the health, safety, or morals of the indi-
vidual, if it is impracticable for the individual to accept the position. . . .’’ The Fed-
eral ‘‘prevailing conditions of work’’ requirement also applies to the PUA program
as does ‘‘any comparable’’ provisions of State law.
Workers asked to return to work, particularly in the early phases of reopening,
are especially at risk. Jobs such as meat packing, hairdressing, retail, home care,
and food service are poorly paid and are filled disproportionately by workers of color.
Underpaid workers are far less likely to have access to counsel to advise them of
their right to refuse unsuitable work. What will likely happen is that employers will
flag these workers as refusing suitable work, and those workers will then bear the
burden of proving that the work they refused was unsafe, which is a huge burden
and will keep them from getting benefits while the dispute is litigated. Either Con-
gress or the DOL must make clear that unsafe work is not suitable work.
CONGRESS MUST REAUTHORIZE THE PANDEMIC UNEMPLOYMENT COMPENSATION
PROGRAM IN RESPONSE TO THE EXPONENTIAL GROWTH IN UNEMPLOYMENT
The Pandemic Unemployment Compensation (PUC) program, which temporarily
provides an additional $600 weekly to qualified unemployed workers, is an essential
benefit in this moment, as it attempts to make up for the fact that UI benefits only
replace approximately 40 percent of wages.
Efforts to undo PUC fail to acknowledge the reality that working people and com-
munities are facing and what is really going on in our economy. PUC is also criti-
cally important to many self-employed workers who were struggling to make ends
meet but can now comfortably work on plans to re-open their businesses when the
health crisis passes.
At the same time, we should be asking why underpaid workers—who will hope-
fully be making closer to or perhaps even above their regular wages, allowing for
greater economic stability in these uncertain times—are being expected to work for
so little compensation in the first place. Wages and unemployment benefits have
stagnated for decades. Many workers cannot live on the wages they are making,
much less on an unemployment benefit that is a small fraction of their regular
wages. This is particularly true for women of color. While the overall gender wage
gap means that for every dollar a white man makes, a woman makes 82 cents,10
when disaggregated by race, Black women earn 63 cents, Latinx women earn 54
cents, Native Hawaiian and Pacific Islander women earn 65 cents, and American
10 National Women’s Law Project, ‘‘Quantifying America’s Gender Wage Gap by Race/
Ethnicity,’’ March 2020.
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Indian and Alaskan Native women earn 59 cents.11 Black men earn 73 cents and
Latinx men earn 69 cents to the dollar of white men.12
Right now, the Federal Government should be focused on ensuring that workers
can survive this crisis and that the economy gets the maximum boost possible with
the consumer buying power generated from the PUC benefits. Congress must ensure
that workers are able to maintain an adequate income while they have no jobs be-
cause of public-health-necessitated shutdowns, and the unavoidably slow return to
a normal economy. We must also recognize that there are certain industries, such
as those involving large crowds like sporting events and live performing arts, that
are not going to be able to safely ‘‘reopen’’ anytime soon.
Indeed, in May, the official unemployment rate surpassed 13 percent, which is
higher than the peak unemployment rate reached during the Great Recession. This
number represents job loss up to the middle of last month, and we have seen mil-
lions of new initial claims flow in since that time. By pulling the plug on the PUC
program, which will impact an estimated 10 million workers and self-employed busi-
ness owners, the economy will suffer a massive economic hit of over $17.9 billion
dollars per week if insured claims hold at mid-May levels.
The PUC benefit boost is also necessary, in large part, because so many States
have lowered their unemployment insurance benefit levels to the point where they
cannot effectively aid workers and provide counter cyclical stabilization during a re-
cession or other crisis. For example, the average weekly unemployment benefits in
the U.S. is just $340 a week, which replaces only 44 percent of the average worker’s
weekly wage. In many States, the ‘‘replacement rate’’ is 25 percent or lower. As
NELP has reported repeatedly, the real problem is that too many workers who qual-
ify for benefits cannot access them.13 As we have seen across the country, filing for
unemployment insurance can be arduous.
As workers in low-wage jobs are facing mounting bills as a result of the COVID
crisis, including back rent and other major expenses, the increased income provided
by PUC is often all that separates workers and their families from homelessness.14
When workers are standing in line for paper applications for unemployment insur-
ance,15 spending hours on hold while trying to apply over the phone,16 or when com-
puter systems continue to crash,17 it’s crucial that Congress and State governments
focus on making sure everyone who lost work can get their benefits, rather than
anti-worker fallacies about people ‘‘refusing to work.’’
PUC is a lifeline and does not create a disincentive to work. As discussed above,
under every State unemployment insurance law in the country, a person who re-
fuses suitable work will be found ineligible for benefits. There are some situations
that can be regarded as good cause to leave a job for personal reasons, such as es-
caping domestic violence, or for work-related reasons, such as preserving worker
health and safety—but the prospect of a higher unemployment benefit is not one
of those good causes.
Additionally, several guidance letters issued by ETA have made it clear that re-
fusing work to receive unemployment benefits can be fraud. Workers are informed
before applying that they cannot claim benefits for which they do not qualify and
if they do, they will need to pay them back, and may even face steep financial pen-
alties.
11 Dominique Derbigny, ‘‘On the Margins: Economic Security for Women of Color Through the
Coronavirus Crisis and Beyond,’’ Closing the Women’s Wealth Gap, April 2020, https://
womenswealthgap.org/wp-content/uploads/2020/04/OnTheMargins_April2020_CWWG.pdf.
12 Pew Research Center, ‘‘Racial, gender wage gaps persist in U.S. despite some progress,’’
July 1, 2016, https://www.pewresearch.org/fact-tank/2016/07/01/racial-gender-wage-gaps-per-
sist-in-u-s-despite-some-progress/.
13 Claire McKenna and Irene Tung, ‘‘Occupational Wage Declines Since the Great Recession:
Low-wage Occupations See Largest Real Wage Declines,’’ National Employment Law Project,
September 2, 2015.
14 Dima Williams, ‘‘The End of the Extra $600 Weekly Unemployment Benefits Threatens
Rent Payments,’’ Forbes, June 1, 2020.
15 Tami Luhby, ‘‘Floridians line up to get paper unemployment benefits forms,’’ CNN, April
8, 2020, https://www.cnn.com/2020/04/07/politics/florida-unemployment-benefits-covid/index.
html.
16 Tamara Chuang, ‘‘Only 6 percent of calls to Colorado’s unemployment line are getting an-
swered. But changes are on the horizon,’’ Colorado Sun, May 28, 2020, https://
coloradosun.com/2020/05/28/colorado-unemployment-calls-holds-wait-callbacks/.
17 Jim Zarroli, ‘‘Unemployment Websites Are Crashing Across the Country,’’ National Public
Radio, March 18, 2020, https://www.npr.org/2020/03/18/817950024/unemployment-websites-
are-crashing-across-the-country.
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Moreover, we should not overlook how critical it is for workers to maintain their
connection to a job right now. For so many people, there is more to a job than the
paycheck. In these uncertain times, workers are seeking stability, and the reassur-
ance of continued work is something that more and more workers can no longer
count on. Their jobs may be the source of health-care benefits, retirement security,
and possibly equity in the company. Workers are also well aware of how resume
gaps can harm long-term job prospects, even in this era.
Finally, we need to note that re-employment bonuses are not the answer. They
are based on the premise that workers are not looking hard enough for work. The
reality is that there is a positive correlation between duration of unemployment and
finding a suitable replacement job that workers remain at longer.18 Workers and
employers benefit from having an unemployment system that is designed to get
workers back to the right job, and not just any job.
While some policymakers expect that most workers will be asked to return to the
same job that they had before, the longer this pandemic and the recession continue,
the less likely it is that workers’ previous jobs will exist. Moreover, vast swaths of
industries may never return to normal, like travel, gyms, restaurants, sporting
events, and music.19 That will also impact all the industries that feed them. We
may be looking at a massive economic restructuring, the answer for which should
be access to better job training to ensure good job matching, rather than bonuses
to encourage workers to take a less suitable replacement job.
Policymakers need to learn the lesson of the last Great Recession, from which
many individuals, families, and communities never recovered. The response to the
last recession did not inject enough money and was not sustained enough to ensure
that individuals and communities could fully recover from the economic devastation.
This reality also underscores the ways systemic racism impacts which commu-
nities Federal and State governments invest in—during times of crisis and always.
Cities like Detroit and Flint were unable to recover from the last recession and still
have astronomical unemployment rates, and the Black unemployment rates in those
cities is 17.4 percent and 25 percent, respectively.20 When unemployment reached
14.7 percent for the broader population in April, it was rightly viewed as a national
emergency, but there are communities for whom that number is a persistent reality.
The families and communities that were most harmed in the last recession, un-
surprisingly, were disproportionately people of color and women—who already were
dealing with generational racial wealth gaps and gender wage gaps. Today, we are
in an economic crisis, with workers in a worse place economically than before. No
community, least of all Black communities and other communities of color, can af-
ford for policymakers to aim low in terms of emergency aid.
Any argument being made that is not focused on ensuring all workers have the
income needed to survive in this moment is ignoring a very important truth: Ensur-
ing people have economic security is the answer to economic stability in good times,
and to recovery after times of crisis. After all, the economy is not an entity unto
itself, but rather, is the direct result of the economic strength and security of the
people who comprise it.
EXPANDING STATE WORK-SHARING PROGRAMS CAN HELP BUSINESSES REOPEN
RESPONSIBLY, WHILE ENSURING WORKERS’ SAFETY AND ECONOMIC SECURITY
Amidst the tensions playing out between calls to reopen the economy and the
need to ensure workers are safe and healthy, we believe a program known as work-
sharing holds tremendous promise as a solution that will benefit both workers and
employers. With over 40 million workers already laid off and the underlying cause
of our economic disruption likely not remedied for the foreseeable future, we need
to reject all-or-nothing approaches to the question of economic recovery or individual
worker health.
18 Marco Caliendo, Konstantinos Tatsiramos, and Arne Uhlendorff, ‘‘Benefit Duration, Unem-
ployment Duration and Job Match Quality: A Regression-Discontinuity Approach,’’ For-
schungsinstitut zur Zukunft der Arbeit Institute for the Study of Labor, December 2009.
19 Jack Kelly, ‘‘The Coronavirus Effect: Here Are the Jobs That Will Be Added and Lost,’’
Forbes, March 19, 2020, https://www.forbes.com/sites/jackkelly/2020/03/19/the-coronavirus-
effect-here-are-the-jobs-that-will-be-added-and-lost/#267016782a1c.
20 Andre M. Perry, ‘‘Black Workers Are Being Left Behind by Full Employment,’’ The Brook-
ings Institution, June 16, 2019.
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Work-sharing programs (also known as short-time compensation) saved half a mil-
lion jobs in the Great Recession, and in 2012, Congress enacted Federal legislation
(the Layoff Prevention Act, sponsored by Senator Jack Reed) that provided incen-
tives to States to enact work-sharing as an alternative to layoffs. While work-
sharing was originally envisioned—and is still primarily used—as a voluntary layoff
alternative when employers first face a temporary financial downturn, the program
can also be a vital tool for businesses that have already laid off their workers but
need to ramp back up slowly.
Through work-sharing, employers who need to rebuild their operations gradually
can spread the impact across the workforce by substituting the number of layoffs
they would otherwise be imposing with an equivalent number of reduced work hours
spread over a larger number of employees. So, for example, an employer that has
already laid off all 20 employees but has only enough work to call back 10 could,
instead of keeping 10 workers on layoff, bring back all 20 employees half-time.
Under a work-sharing plan, all employees would receive half pay and a work-
sharing benefit that is equivalent to half a weekly UI payment (as well as any
employer-provided fringe benefits). As business continues to pick up, hours could be
increased across the workforce with corresponding increases in wages and decreases
in work-sharing payments.21
This kind of rebuilding approach brings tremendous advantages for workers and
the economy. First, the sooner that workers and their employers reconnect, the
greater the likelihood that workers will not suffer the economic harm that comes
with long-term unemployment or having to start over with new employment. Sec-
ond, businesses benefit by retaining trained employees, and if they can provide
those employees enough financial security between wages and work-sharing benefits
to keep them on board through tough times, they will come out stronger on the
other side, when customers and demand for products and services fully return.22
Third, we are looking at an economy that will not be able to sustain the levels
of employment that it did pre-COVID for a long time. Sharing the available work
over the workforce in the short-term is a common-sense solution that will benefit
all of us in the long run. Companies that have used work-sharing through down
times routinely talk of its positive impact on employee morale.
Through the CARES Act, Congress has already acted to renew incentives and pro-
vide funding to States to improve and promote work-sharing, but more needs to be
done. Only 27 States have activework-sharing laws today, and it is time to ensure
that that this voluntary program is offered as an option to employers in every State.
In the wake of an economic tsunami that has left one in four workers in the U.S.
unemployed virtually overnight, we need to update work-sharing law to streamline
its usage by employers struggling to find their footing as they come back online.
Businesses should be able to access the program quickly, and program rules should
provide employers with maximum flexibility in deploying hours reductions in lieu
of layoffs. Continuing Federal reimbursement of work-sharing benefits beyond the
end of this calendar year will be vital to bringing new businesses to the program.
Finally, more needs to be done to promote work-sharing usage by State and local
governments and nonprofits. As the next wave of financial battering comes in the
form of State and local budget cuts, government and nonprofit jobs can be preserved
through strategic hours reductions using work-sharing.
UNEMPLOYMENT BENEFITS ARE MAKING A PROFOUNDLY POSITIVE IMPACT ON
WORKERS AND FAMILIES THROUGHOUT THE COUNTRY
Though we have heard so much in the news about the administrative struggles
to get PUA and PUC up and running, it’s important to highlight that these pro-
grams have already provided an essential life line for millions of workers and their
families across the country. These benefits have prevented families from making un-
tenable choices such as going without healthy and adequate food and necessary
medications, or not paying utility bills, mortgages, rent, and health insurance pre-
miums. In a time of such anxiety and uncertainty, these benefits have given people
a measure of economic security, allaying at least some of their fears.
21 Catherine G. Abraham and Susan N. Houseman, ‘‘Since Work Is Rare, It’s Time to Share,’’
Wall Street Journal, May 11, 2020.
22 George Wentworth, Claire McKenna, and Lynn Minick, ‘‘Lessons Learned: Maximizing the
Potential of Work Sharing in the United States,’’ National Employment Law Project, October
2014.
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Additionally, these benefits have allowed people to keep spending money in their
local grocery stores, to perhaps support local restaurants with take-out orders, and
to keep contributing to the economies of their communities. As demonstrated in the
table below, should Congress fail to reauthorize PUC, an estimated $17 billion per
week will disappear from families, which means it disappears from our economy as
well. Even as we slowly reopen businesses, the withdrawal of this important source
of income support will dramatically hinder recovery for individuals, communities,
and the economy overall, making the scaling up of businesses lower under the best
of circumstances, and likely impossible for far too many.
Below is a sampling of stories from people throughout the country who are sur-
viving because of the combination of UI or PUA and the PUC benefit. NELP thanks
MomsRising, UNITE HERE Local 355, the United Steelworkers, Actor’s Equity,
SAG–AFTRA, the American Guild of Musical Artists, Business for a Fair Minimum
Wage, International Alliance of Theatrical Stage Employees, the Department of Pro-
fessional Employees, UNITE HERE Local 355, Make the Road New York, Make the
Road Nevada, Ohio Organizing Collaborative, Step Up Louisiana, and One Pennsyl-
vania for sharing these first-hand accounts with us, and we thank these workers
for allowing their stories to become part of the official record in today’s hearing.
Though the implementation of PUA and PUC was troubled, to say the least, now
that all the States have the programs up and running, this is truly the best way
to make sure we get money into the hands of people and families who desperately
need it.
• Carlos worked as a bartender at Miami International Airport for 6 years and
was laid off during the current COVID–19 pandemic. As a single father to a
4-year old daughter, caring for his parents and two chronically ill dogs, Car-
los’s monthly bills exceed $1,300. For Carlos, ‘‘$600 a week is necessary.’’ He
shares, ‘‘I worked 6 years without stopping, without taking a day off. I think
I at least deserve to be able to maintain my family during this time of crisis.
He adds, ‘‘We fought hard to receive Florida’s unemployment benefits and
we’re still fighting. So many of my coworkers haven’t received any unemploy-
ment checks from Governor DeSantis. This Federal aid is the only income
many families have.’’
• Ricardo worked as a bellman at Florida’s famed Fontainebleau Hotel for 8.5
years before being laid off in March. This June, he will lose his health insur-
ance. For Ricardo, who is diabetic, ‘‘$600 is necessary for me to survive, in-
cluding being able to pay for my medications.’’ He shares, ‘‘I have been paying
my taxes since I was 14 years old. I have been working for decades. I’ve never
collected unemployment. And this is a time we need the government to step
up and do their job. I can’t think of any other State that’s put citizens
through what Governor DeSantis has done to us here in Florida. This money
is not a luxury, it’s a necessity.’’
• Karen worked as a Player’s Club representative at Gulf stream Park Racing
and Casino in Florida for 9 years before being laid off during the current
COVID–19 pandemic. Karen is a single mother to a 9-year old daughter.
Karen needs to continue to receive $600 in Federal unemployment to keep
paying her bills. She said, ‘‘My fear is that me and my daughter will end up
homeless without this Federal aid. I waited over a month to receive Florida’s
unemployment and honestly $275 a week is just not enough. This Federal aid
is important to help us for all we do as taxpayers.’’
• Angie from Missouri writes that ‘‘I am living on unemployment so for now I’m
okay. I work for the school system as a classified employee. We are paid hour-
ly. I don’t know when or if I’m going to go back to work. My passion is work-
ing with kids but my future is uncertain. After the $600 a week pandemic
relief expires in July, I will begetting $141.00 per week. I can’t live on that.
I have a special needs son and it isn’t easy on a good day.’’
• Zinnia from Florida tells us that ‘‘My family and I were greatly impacted dur-
ing the pandemic. We were left without jobs, no income and unfortunately,
I had to wait 2 months before I could receive any unemployment benefits due
to all the issues Florida had with their system and processing claims. I’m fi-
nally receiving the benefits, but I’m not out of the woods yet. Due to the long
wait, I had to borrow money for rent and am so behind on bills. I can only
pray that the benefits be extended until we can all get back on our feet. I
have a compromised immune system and honestly too afraid of exposing my-
self too soon to the public.’’
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• Beverly from California reports that ‘‘When I was laid off from my job due
to COVID–19, as a single mother I was petrified. The added $600 in unem-
ployment benefits has been a lifeline, the difference between keeping a roof
over our heads and homelessness. With no end in sight of this pandemic, we
need the expansion of unemployment benefits to make sure no one gets left
behind in this situation we had no control over.’’
• Dawn writes that ‘‘[a]s a North Carolina worker I currently receive the lowest
rate of weekly unemployment benefits in the country. Which is less than
$200.00 per week in State unemployment benefits. Due to the cost of living
my rent payment is $875.00 plus additional fees for sewer, trash, and water.
After paying the rent my expenses are: an electric bill, Internet bill, phone
bill, auto and renters insurance, a car payment, and purchasing food. Without
the receipt of the additional weekly Pandemic Unemployment Insurance ben-
efit some of my services would be cut off. After the NC legislators cut the un-
employment benefits we could receive in 2016 I was only eligible for $25.00
per week in unemployment benefits which not even a child could make ends
meet on a payment that low.’’
• Peggy from Michigan: ‘‘Unemployment insurance has allowed me to pay my
bills and feed my family. I have not been able to work because I am a parent
monitor, which means that I monitor parental interaction with their children
under supervised visitation by order of the court system. We are not set up
to have parental visits at this time. Thank you for allowing me the ability
to maintain an important part of my life.’’
• Korry from Michigan is a U.S. veteran who lives with his wife, and their five
children. He met his wife at Panera, where they both worked, but they have
been laid since shortly after the stay-at-home order came out. Korry is col-
lecting unemployment while he stays home to take care of the kids, but his
wife, who is pregnant, got another job at Amazon to support them rather than
collect unemployment. Without the current $600 per week, Korry would be
getting less than $300 per week based on his prior earnings with Panera.
Normal State weekly benefits even when combined with Brittni’s salary
would not be enough to support their family of nearly 8. The $600 per week
makes it possible for Korry to be the children’s caretakers. The daycare they
used to rely on is no longer operating during COVID–19 and the only family
nearby are their great-grandparents, both of whom are elderly and would not
be able to watch five children under 10.
• Stephanie from Michigan and her husband have two children, ages 5 and 3.
He works from home as an IT specialist for the University of Michigan. But
Stephanie ran a home daycare where she took care of children for 8 other
families. Because of COVID–19, she was forced to shut down her daycare en-
tirely and is grateful for PUA because she does not qualify for UI as she is
self-employed. Michigan has a low maximum weekly benefit so without the
additional $600 in unemployment benefits, her family would have already de-
pleted their liquid savings and would have to borrow from retirement savings
and family members to make ends meet. Stephanie and her husband use the
$600 not just to stay afloat, but to donate to local charities caring for people
in need and to support local businesses such as grocery stores and res-
taurants doing take-out and delivery service so they can help keep their local
economy afloat.
• Casey from Michigan is a bartender for a local craft cocktail bar and was in
the first wave of people to lose their jobs due to the COVID–19 shutdown.
His last day of work was March 16th. Because he was early to start receiving
benefits, Casey did not receive the additional $600 for the first two weeks of
his unemployment. When he took account of his finances after receiving the
first check, he realized that even with his partner still working that he would
have to deplete his savings for them to get by without her shouldering most
of the burden. When he received his first check with the additional $600, he
remembers breathing a huge sigh of relief. His mental State went from crisis
management mode to a feeling of stability, since the $600 brought him much
closer to what he was making at work. The additional $600 has also allowed
him to support local businesses that are still open. Casey says he would love
to go back to work since he really enjoys the small, locally owned bar that
he works for and he’s worried that they are hurting. Whether or not he was
receiving the $600, Casey says he would go back to work. For him, the most
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important factor in his decision to go back is whether the bar can reopen safe-
ly for its workers and its customers.
• Jennifer from New York: ‘‘My husband and I are both unionized workers in
the Broadway theatre; I work on stage as a member of Actors’ Equity Associa-
tion, and he works backstage as a proud IATSE member. Like many who
work in the arts, we book jobs months, sometimes years in advance to man-
age our income and ensure we maintain health care. When the pandemic
forced theaters to close, within 24 hours we both lost not only all our current
income, but also close to $110,000 in income we were counting on for the rest
of the year. There is no end in sight right now. All of us working in the live
arts will be the last to go back to work. We are also the parents of a 19-
month-old son, for whom I am the primary provider of childcare. Rents are
high. Diapers are expensive. Utility bills are creeping up. Our mobile phones
and Internet costs are even more necessary as we search for new jobs and,
in my husband’s case, train for a career change. Without an extension of the
emergency benefits, we will be forced to give up our apartment and move in
with my parents, but even that is an expensive, complicated solution. Due to
my parents’ health conditions, we will need to spend 2 weeks in quarantine
at a hotel before we can safely join them. And when Broadway does eventu-
ally reopen, we will not be in the city to return to work. PUC is the only thing
keeping our heads above water now. We are doing everything we can to
weather this storm: staying home, not visiting grandparents, exploring new
careers and taking free online courses. It’s not enough.’’
• Ben from California is and actor with a wife, a 10-year-old son and 2 dogs,
both of whom have medical conditions which can be expensive from time to
time. He earns most of his income from self-employment, but because of re-
siduals that he earns from past work, he has just enough income to qualify
for a low UI benefit, rather than a more robust PUA benefit. ‘‘While my wife
continues to work at home (thank God!), making her salary and keeping our
health benefits, her monthly income covers about half of our monthly ex-
penses (which include a mortgage, various insurances, utilities, food, etc). So
until I get consistent UI every 2 weeks, we are dipping into our savings to
pay for life’s necessities. We also have had to curb a number of expenses and
lifestyle habits . . . not donating to charitable causes, not ordering from res-
taurants more than 2× a month, changing our cable subscription to a basic
plan, finding and using coupons for grocery store trips, and probably the
hardest one . . . keeping the AC off as much as possible despite hot temps.
So yeah, it hasn’t been easy. If the $600/week disappears before I regain em-
ployment, we will undoubtedly be forced to make some additional really dif-
ficult financial decisions about what else we’ll need to cut—and possibly have
to move out of town where the mortgages wouldn’t be as high. Bottom line
is that it’s just insane that physical work I did 3–15 years ago is preventing
me from receiving the full financial assistance Congress intended me to re-
ceive right now via the PUA.’’
• Bonnie from California is an actor who, before the pandemic, made a com-
fortable living a year, earning about $200,000 per year. But all the work she
had lined up for this year ceased and filming may not resume for a long time.
She applied for benefits and though the vast majority of her income is not
earned as an employee, she made just enough in recent years as an employee
that she was awarded $65 per week in UI, rather than the weekly maximum
of $450 per week. Though she wants Congress to remedy the penalty that
mixed-income earners are facing, she also writes that ‘‘I am grateful indeed
for the $600 the government is adding to my $65.00 U.I. compensation be-
cause it is crucial to my getting by right now. I don’t know what would hap-
pen were that to disappear at the end of July! Even with that weekly amount,
I am running up a serious credit card bill. The entire film industry is shut
down . . . with everything being pushed until ‘early next year’ at the soonest.
There will be no work for some time. We really need some help here.’’
• John, who runs a chiropractic practice in Virginia tells us that ‘‘Unemploy-
ment benefits, especially the $600 per week, helped keep my family afloat and
out of debt while I had to close down my practice. As someone who has con-
tributed to the Federal Government for years, it was nice to know that the
Federal Government was there for me when I needed help.’’
• Axel lives in Queens, NY: ‘‘I am one of those fortunate enough to receive un-
employment benefits during this pandemic. Right now, I receive $979 in
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weekly benefits, $600 of which is Pandemic Unemployment Compensation
(PUC). All of it goes towards covering only the most basic necessities for me
and my family: our rent, which is $1,500 per month, utility bills, food, medical
costs, and transportation. Everyone in my family has fallen ill to COVID–19—
my brother is still struggling to recover—and this has caused significant psy-
chological and emotional stress on top of the financial stress I feel to make
ends meet. I had an emergency operation at the beginning of the pandemic,
and I am terrified that I will be unable to pay for medical care should some-
thing else happen to me in the months to come. Without the extra $600 in
PUC, life in New York would be impossible. Even with benefits, we must rely
on food pantries to keep us from going hungry. We must extend PUC benefits
past July, because $379 is not enough.’’
• Ahmad in Pennsylvania writes: ‘‘On March 16th, I was laid off from my job
as a line cook at a Philadelphia restaurant. I’m a community college student
but I worked full-time at the restaurant. When I was working, I was able to
help my parents pay for groceries and help my mom cover the costs of start-
ing her new business. I also was trying to save up so that I could move out
of my parents’ place and afford a down payment on a house. Without the
$600, my benefits would be very low—$219/per week. Because the restaurant
industry in Philadelphia has been destroyed by this pandemic, I’m afraid I
won’t be able to find a job for a long time. If Congress cuts my benefits to
$219 per week, it would really be hard for me to help out my family. I’ve been
working so hard to build a better life for myself, but these cuts would send
me back to square one.’’
• Mary in Ohio: ‘‘On March 13, 2020, I was laid off from my job as a substitute
teacher and was not able to pay rent for 2 months. I struggled getting
through to ODJFS through phone and email with no resolution for my specific
issues. The extra weekly $600 is crucial to ensure that Ohioans can meet our
financial needs. With the $600, I can pay my rent, put food on the table, and
cover my other bills.’’
• Cindy from Ohio is self-employed and is supporting herself on PUA and PUC:
‘‘I’m a self-employed painter of 18 years finding myself as one out of the
countless 1st-time filers for unemployment. My last day of work was March
14, 2020 and as a caretaker of my compromised parents, my imperative is to
keep them safe. After Governor Mike DeWine’s request to stay at home, I
waited 10 weeks for the PUA system to be ‘‘built’’ with no income! After FI-
NALLY receiving the $600 addition in weekly ‘‘back pay’’ (which is less than
my normal income), I can make sure my overdue mortgage can be brought
close to current, that my taxes that are due in July will get paid, and that
several other bills will get partially paid. That $600 is security that I need
while trying to move forward into an unknown workscape. Due to the public
health crisis, my projected work is about 30 percent of what is normal for the
last 3 months! I HAVE to protect my parents’ health first. But without the
continued $600 benefit, we are being forced to choose between our health, the
health of our loved ones, or our jobs, when we did not choose this path! This
is unacceptable and beyond cruel. I’m certain none of our public officials
would choose to walk in our shoes, but I hope they can imagine being in
them!’’
• Katie from Ohio: ‘‘I work in education and am only getting $340 every 2
weeks. Since I am not able to pay all my bills with this amount, I am being
reported to the credit bureau and my credit score has dropped significantly.
I was told by my employer that due to the pandemic they’re making cuts and
that I will not have a job when/if school opens in the Fall. I have MS (mul-
tiple sclerosis), so for my personal health and my family’s safety, I am cur-
rently looking for a remote position. I have applied to 15 job openings, but
I have yet to receive any interviews. Ohio’s unemployment system has failed
to provide livable unemployment relief and I am struggling with paying bills.
My family and I need assistance, and that extra $600 a week would allow me
to pay my car, mortgage, medical and other bills. Please expand PUA and ex-
tend the $600 a week past July 2020.’’
• Brittany from Louisiana: ‘‘The recent payments of unemployment have been
a great help to my finances. I recently bought a car, and between that, food,
and providing for my son, the additional $600 from the CARES Act has really
helped me out. We need to extend these benefits and start paying people real
wages.’’
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• Jason from Nevada: ‘‘Receiving the $600 has helped me keep all my bills up
to date. Otherwise, I would miss payments and then would have to pay late
fees. I would go further into debt like so many people I know during this pan-
demic. These benefits have taken the place of what I would have gotten if I
was still working at the job I had before this pandemic. Without them, I
would not be able to keep up.’’
• Samantha from Nevada: ‘‘I’ve been working for MGM Resorts since 2017 and
as a union worker, I always felt secure in my workplace. Before the pandemic,
I transferred to the MGM Resort Pool and unfortunately was laid off before
I could even have my first day of work. I had enough money saved up to pay
my upcoming bills but not enough to last me through the months to come.
Thankfully with the help from unemployment benefits, I’ve had a weight lift-
ed off my shoulders from the stress of not knowing how I was going to pay
my next car payment, rent, and my other monthly bills. I’ve been able to live
with my family with one less thing to worry about through these hard times.
I strongly believe we need to keep unemployment benefits because I don’t
know how long it will be until resort pools will open back up to the public
again. Not having that income would affect me drastically.’’
• Joe from Pennsylvania: ‘‘Our company closed due to the Coronavirus. We had
65 people working, most between the ages of 30 and 63 years, who are now
on unemployment. One of my coworkers has prostate cancer and, like the rest
of us, he’ll be losing his medical insurance come July 1st. A lot of us are in
our 50s and are not yet able to go on social security, but we still have car
payments, mortgage payments, and utility bills on top of paying for our fam-
ily’s medication and food. It’s tough to get a new job when you’re in your late
50s and 60s, especially in this environment. This is why it is essential for the
benefits to continue a bit longer. We need these additional unemployment
benefits to help our families pay for necessities while we look for work.’’
• Jared from Pennsylvania: ‘‘I worked at my company for about 1 year before
COVID–19 hit and we were forced to leave our positions. While unemploy-
ment compensation from the State is helpful during this time of joblessness,
it’s not enough to cover living expenses, and the additional $600 per pay pe-
riod for unemployment is necessary because our company has shut off our
medical insurance. It’s stressful to think about how I would be able to cover
hospital expenses or prescription medications if I’m only receiving the State
unemployment compensation. The $600 makes scenarios like this a little
more manageable. I [also] have close family members who are greatly affected
by this and already have severe medical conditions that require expensive
medicines previously covered by health insurance offered by their employer.
The loss of the $600 would mean that their prescriptions cannot be purchased
because they are too costly. I ask that the additional $600 per pay period be
extended for people on unemployment compensation until the end of this
year. Not only will this provide additional funds to cover utility bills and med-
ical insurance, it will give me time to find another job should our company
shut down business permanently and not be able to offer employment.’’
• Justin from Florida: ‘‘I’m a stagehand technician/rigger and proud member of
I.A.T.S.E. Local 647 of this month, and I’ve been a stagehand technician since
I was 22 years old. Last October, for the first time in my life, I was able to
get a mortgage and purchase my very own home. Then COVID–19 appeared.
I was immediately told to stay home, with no means to pay my bills or put
food on the table. To make matters worse, I live in Florida, where the unem-
ployment program pays so little for such a short period of time, it could be
construed as a joke. I now have a mortgage to worry about and am afraid
I’ll lose this house as fast as I got it. And the real cherry on top is that with
no end insight regarding COVID itself, I don’t know when I’ll be able to re-
turn to work. I’m not sure our industry will ever truly recover from this. Even
with a vaccine, so many Americans are so fearful of coronavirus and mass
gatherings that I just don’t see the ticket sales being high enough to support
a show staying out on tour. We were the first industry to be laid off, and we’ll
be the last to return. We have been absolutely devastated. It is my hope that
Congress may understand just how unique and urgent our situation is and
come to our aid by extending the Cares Act $600 per week. To be clear, and
I feel I can speak for most of us in the entertainment industry, where most
folks deign to work, we actually dream to work. I don’t want to have to rely
on Federal assistance to scrape by. I want my job back. I love my job, and
I wouldn’t trade it for anything in the world. I thank you for your time.’’
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• Victoria from Virginia is a sole proprietor of a hair salon. She has been receiv-
ing the CARES Act unemployment insurance benefits and hopes the benefits
extended not just for herself so she can maintain her business, but for her
community and customers. As she contemplates reopening her salon, she
knows that she can only make a living if her clients have money to spend.
‘‘I get the bulk of my bookings around major events and windfalls—weddings,
proms, graduations, job interviews, church events. Those are the hard-earned
special treatments, the ones that often require months of saving and com-
promises on food or utilities. On the flipside are the windfalls. The most excit-
ing time of year is tax refund time, when people come and get their hair done
because they received their tax refunds.’’
• Sarah, a musician in New Jersey: ‘‘Our industry was among the first to lose
work and will certainly be among the last to return to work. The expansion
of the extended benefits program beyond July 31st will be essential to my fi-
nancial well-being. The additional $600 per week is the difference between
paying the rent or not paying the rent. Full stop.’’
• James, a musician in California: ‘‘Simply put, unemployment insurance with
added PUA financial assistance has kept my household afloat. Without this
assistance I would have to seriously consider abandoning the profession.’’
• Sara, a musician in New York: ‘‘The stress of this uncertainty, and the pre-
carious financial situation we find ourselves in, is amplified by a reality that
will come to pass in October: the birth of our first child, a daughter. The PUA
has been absolutely essential to our well-being since I first went on unem-
ployment in April. PUA has helped us remain solvent and provided means for
us to cover the essentials, like nourishing food for my pregnancy. The con-
tinuity or disappearance of the PUA $600 per week will single-handedly de-
termine our future.’’
• Maria, a musician in New York: ‘‘As a single mother of two, I am so grateful
that losing my job as a result of COVID–19 has not jeopardized my children’s
stable home or dinner table. Without the PUA I would not be able to pay my
rent. I would be forced to choose between buying food and paying the elec-
tricity.’’
• Laureen, a musician in Illinois: ‘‘My husband is in the severe stage of early-
onset dementia at the young age of 58. I am paying $210 a day for 24/7 live-
in care for my husband. It is alarming and stressful to have a lifetime of sav-
ings get spent so quickly. I truly need the help of the $600 PUA to continue.’’
• Melanie, a musician in Massachusetts: ‘‘My immune system is compromised,
so I am unable to easily find work. Receiving unemployment insurance has
literally saved my life. If I no longer received that amount, I would no longer
be able to afford rent, let alone groceries, or pay my bills.’’
• Anne, a musician in New York: ‘‘As the mother of a prematurely born baby
girl, I have had tremendous hurdles in providing for her. The CARES Act has
made it possible for me to continue to pay bills . . . health care and medicine,
food, diapers, infant supplemental formula, and a slew of other non-negotiable
necessities. It is the only thing keeping me afloat.’’
• Jennifer, a musician from California: ‘‘If not for PUA and PUC, I would have
become homeless in April and I would have had to file for bankruptcy.’’
• Michael, a musician from Oregon: ‘‘Our careers have been decimated. Most
of us live in large cities where classical music thrives and our rents and
monthly expenses are extremely high. Some of us have already had to leave
our homes as the costs have been prohibitive. Without the help of PUA, many
of us would not be able to pay our bills. Thank you so much for the additional
$600/month and I implore you to extend the pandemic unemployment insur-
ance past the end of July. Without your help our industry faces possible ruin.’’
HOW DO WE MOVE FORWARD?
This crisis has laid bare the shortcomings and opportunities for action to improve
our Nation’s unemployment insurance system in so many ways. Workers who have
very little waited in line for weeks for needed benefits. The inequality of access and
benefit levels is obvious. That is why we must act now to change the system—we
will never have a more important moment to get lasting and long-needed change.
Crises expose our greatest weaknesses; if we ignore the moments when systemic
flaws are laid bare, that is nothing short of political and policy failure. We must
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take advantage of the clear lessons we have learned about our UI system to estab-
lish a meaningful Federal floor, including adequate funding for States to upgrade
their IT systems and handle the current flow of applications for unemployment ben-
efits. If we fail to do so, States will face real pressure from employers to cut benefits
when State trust funds run out, and our UI system will only be further decimated
before the next crisis hits.
First, in the short term, we need to establish a way to scale up and scale down
benefits automatically as the economy calls for it, rather than rely on ad-hoc exten-
sions that could come erratically, force States to continually reprogram their sys-
tems, and end too soon and too abruptly, thereby stranding families without nec-
essary income support and damaging our country’s economic recovery. Ranking
Member Wyden has proposed a fact-based, rational way to scale benefits as health
care and economic conditions call for it. Senators Reed and Bennet have also pro-
posed a thoughtful approach to accomplish this as well. At a minimum, we must
reauthorize the full PUC, PUA, and Pandemic Emergency Unemployment Com-
pensation (PEUC) until the public health crisis ends and unemployment is back into
the single digits, and authorize additional weeks of PUA and PEUC sufficient to
meet the needs of unemployed workers and their families during what will likely
be a drawn-out recovery from this pandemic and recession.
As we look beyond just the temporary benefits we need so that we may improve
the entire UI system, it is important to consider where the program does not provide
equal and fair access to benefits. The Urban Institute found that during the last
Great Recession, Black workers were on average 13 percent less likely than white
workers to receive benefits, and Latinx workers were 4 percent less likely.23 Obvi-
ously, structural racism inherent in the occupational segregation in the U.S. plays
a role in access to those benefits, but it is also clear that there were hurdles to ben-
efit access disproportionately affecting workers of color back then that persist to this
day.
The most obvious hurdle was the move by many States to reduce the maximum
duration of benefits below 26 weeks in the aftermath of the Great Recession. Ten
States cut duration of benefits. The most recent is Alabama—last June, it cut max-
imum duration to just 14 weeks. Three States cut maximums from 26 to 20 weeks—
Michigan, Missouri, and South Carolina. Arkansas cut maximum benefit duration
to 16 weeks. Florida, Georgia, North Carolina, Kansas, and Idaho have adopted slid-
ing scales tied to State unemployment rates. Fortunately, four states—Idaho, Kan-
sas, Georgia, and Michigan—have reversed course and restored benefits to 26 weeks
of recipiency. Reducing duration is necessarily going to have a disparate impact on
communities of color until other structural reforms are implemented to get people
in affected communities back to work faster. As of the third quarter of 2019, during
a period of record low unemployment, the average duration of an unemployment
spell was 21 weeks. For white workers, a 20-week cutoff would not affect the aver-
age worker who remained unemployed for 19 weeks. However, Black workers aver-
aged 25.9 weeks in their unemployment period.24 A 26-week benefit period would
completely cover average duration for Black workers; any duration reduction there-
fore statistically harms Black workers more.
We also need to enact an important reform to the UI/PUA method of delivering
benefits to unemployed workers. PUA is available only to workers who are not eligi-
ble for UI, whether by virtue of not earning enough income to qualify, being self-
employed, or facing some other exclusion. Many workers, however, have sources of
income both as an employee and as a self-employed worker. Far too many workers,
including some featured above, earn most of their income through self-employment
but earn just enough income as an employee that they receive a minimum or near-
minimum State UI benefit. As a result, they are ineligible for PUA, and over the
course of the 39 weeks of authorized benefits, they may stand to lose literally tens
of thousands of dollars in benefits they desperately need, not just for their own fi-
nancial support, but perhaps for the financial support of their businesses as well.
This clearly unintended consequence is having a devastating effect on workers
throughout the country. We are ready to work with Congress to enact a solution
that provides workers with the relief to which they should be entitled, but also gives
State UI agencies adequate time and resources to reprogram their IT systems to im-
plement this fix.
23 Austin Nichols and Margaret Simms, ‘‘Racial and Ethnic Differences in Receipt of Unem-
ployment Insurance Benefits During the Great Recession,’’ Urban Institute, June 2012.
24 BLS Labor Force Statistics from the CPS, https://www.bls.gov/web/empsit/cpsee_e18.htm.
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Because there is so much disparity across States and populations within those
States, we are at a point where Congress should consider federalizing UI to operate
similarly to Social Security. Short of that, NELP endorses Senator Bennet’s plan for
long-term reform.
If States emerge from this recession with empty trust funds and having had to
borrow money to pay benefits, there will likely be widespread efforts to cut benefit
access and amounts going forward. Key components of effective long-term reform in-
clude the following:
• Minimum of 26 weeks of benefits.
• Benefits replace 60 percent of income for workers below the earnings limit.
• More workers should be eligible. Employers in the gig economy and low-paid
educational contract employees like adjuncts and paraeducators should be
able to access UI in every State.
• Permanent reform of Extended Benefits. During a recession, benefit weeks
should automatically be extended as the unemployment rate increases.
• Every State should provide a dependent allowance for people who have chil-
dren to care for.
• UI should be available to part-time workers in every State.
• Good cause to quit should be uniform across States, so workers fleeing domes-
tic violence, following a spouse whose job has moved, or whose work jeopard-
izes their health and safety should be able to resign and get UI.
• Work-sharing should be universal and available in every State. Employers
should have the option to spread layoffs across the work force and allow
workers to get UI to cover their lost hours rather than completely laying off
part of the workforce.
• Make the optional Alternate Base Period mandatory so workers with erratic
schedules can maximize their benefits.
PUC Amount
State IU PUA PEUC Total Paid
Alabama 190,205 0 0 190,205 $114,123,000
Alaska 48,000 0 0 48,000 $28,800,000
Arizona 217,968 0 0 217,968 $130,780,800
Arkansas 120,043 0 6,058 126,101 $75,660,600
California 2,155,310 699,745 324 2,855,379 $1,713,227,400
Colorado 265,499 101,510 0 367,009 $220,205,400
Connecticut 272,695 55,117 0 327,812 $196,687,200
Delaware 50,780 0 1,547 52,327 $31,396,200
District of Columbia 70,103 0 1,104 71,207 $42,724,200
Florida 529,384 0 0 529,384 $317,630,400
Georgia 731,762 0 0 731,762 $439,057,200
Hawaii 127,921 0 0 127,921 $76,752,600
Idaho 56,692 633 1,774 59,099 $35,459,400
Illinois 762,367 373,443 28,873 1,164,683 $698,809,800
Indiana 253,536 285,913 9,097 548,546 $329,127,600
Iowa 178,619 17,545 0 196,164 $117,698,400
Kansas 104,553 0 0 104,553 $62,731,800
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PUC Amount
State IU PUA PEUC Total Paid
Kentucky 244,342 0 0 244,342 $146,605,200
Louisiana 328,409 174,070 304 502,783 $301,669,800
Maine 138,219 135,681 70 273,970 $164,382,000
Maryland 255,017 236,342 5,575 496,934 $298,160,400
Massachusetts 594,515 1,612,010 0 2,206,525 $1,323,915,000
Michigan 985,294 2,116,842 33,561 3,135,697 $1,881,418,200
Minnesota 416,668 73,411 13,405 503,484 $302,090,400
Mississippi 184,150 0 0 184,150 $110,490,000
Missouri 255,374 83,638 7,437 346,449 $207,869,400
Montana 49,917 53,390 1,612 104,919 $62,951,400
Nebraska 61,604 20,352 10 81,966 $49,179,600
Nevada 343,030 172,346 4,745 520,121 $312,072,600
New Hampshire 109,184 0 0 109,184 $65,510,400
New Jersey 586,532 547,887 0 1,134,419 $680,651,400
New Mexico 105,568 43,236 2,595 151,399 $90,839,400
New York 1,811,012 1,111,488 53,737 2,976,237 $1,785,742,200
North Carolina 564,068 72,422 0 636,490 $381,894,000
North Dakota 31,100 7,956 3,609 42,665 $25,599,000
Ohio 636,869 615,968 11,024 1,263,861 $758,316,600
Oklahoma 139,196 0 1,732 140,928 $84,556,800
Oregon 293,081 0 0 293,081 $175,848,600
Pennsylvania 907,252 1,010,651 531 1,918,434 $1,151,060,400
Puerto Rico 194,272 388,484 2,139 584,895 $350,937,000
Rhode Island 87,966 38,972 0 126,938 $76,162,800
South Carolina 241,793 88,160 48 330,001 $198,000,600
South Dakota 22,454 4,107 100 26,661 $15,996,600
Tennessee 327,768 81,439 0 409,207 $245,524,200
Texas 1,272,557 164,386 1,080 1,438,023 $862,813,800
Utah 82,054 111,038 0 93,092 1$55,855,200
Vermont 50,285 0 0 50,285 $30,171,000
Virginia 402,926 193,684 13,825 610,435 $366,261,000
Virgin Islands 4,354 0 3,776 8,130 $4,878,000
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PUC Amount
State IU PUA PEUC Total Paid
Washington 593,287 193,276 0 786,563 $471,937,800
West Virginia 93,086 0 0 93,086 $55,851,600
Wisconsin 291,677 567 0 292,244 $175,346,400
Wyoming 17,631 5,209 0 22,840 $13,704,000
Total 18,857,948 10,790,918 209,692 29,858,558 $17,915,134,800
Source: Authors calculations, Department of Labor, Employment and Training Administration, Initial Claims
Report.
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QUESTIONS SUBMITTED FOR THE RECORD TO MICHELE EVERMORE
QUESTION SUBMITTED BY HON. RON WYDEN
WORKERS WITH WAGE AND SELF-EMPLOYMENT INCOME
Question. Workers who are eligible for regular unemployment compensation can-
not claim PUA. This has led to some workers who lost both wage income and self-
employment income only being able to claim regular unemployment compensation
even when their PUA benefit would be bigger. Can you explain the challenges this
creates for workers and any possible solutions?
Answer. The penalty being paid by many workers who earn what we call ‘‘mixed-
incomes,’’ that is people who earn some wages as an employee and some in other
forms including self-employment, is extensive and growing. In many industries, in-
cluding the performing arts for example, people earn most of their income not as
employees, but as independent contractors or otherwise self-employed people. They
may earn a little money on the side as an employee, or may get an occasional artis-
tic job as an employee, and therefore qualify for a minimum UI benefit which is
some States can be as small as $5 per week. If they weren’t eligible for that small
UI benefit, they would qualify for a much higher PUA benefit, perhaps even a max-
imum benefit. Similarly, there are self-employed people all over the country, true
entrepreneurs, who may hold part time jobs on the side to help make ends meet,
especially while building a business, who also have the bulk of their income come
from non-W–2 wages. In California alone, the State UI agency estimates that at
least 100,000 people will face this penalty. In New York, the number grows to at
least 150,000 people, likely more.
It is no exaggeration to say over the course of this year alone, mixed-income earn-
ers would have received over $10,000 more in benefits had all their income been
considered, or had they been able to receive PUA, than they will in UI. This is
money they need for rent and mortgages, food and utilities, and health insurance
premiums. This is not an inconsequential penalty and it isn’t a penalty that can be
solved simply by reauthorization of PUC because while PUC is designed to make
up for the portion of W–2 wages that aren’t replace by UI, it isn’t al all making
up for the wages that aren’t replaced for mixed-income earners.
We understand that there are considerable administrative hurdles to imple-
menting a fix for this problem. But that doesn’t mean we shouldn’t implement a fix.
Congress could mandate that if an individual has mixed income and their weekly
UI benefit is less than the minimum PUA benefit for the State, that they should
be able to collect PUA and have all their income count toward the calculation of
their benefit amount. Because this will require considerable administrative effort to
implement, States should be given adequate time to reprogram their systems, per-
haps 2 to 3 months. This will also help manage expectations from mixed-
income earners, but still let them know that relief is on the way.
QUESTIONS SUBMITTED BY HON. BENJAMIN L. CARDIN
Question. The CARES Act’s Pandemic Unemployment Assistance (PUA) program
expanded eligibility for unemployment benefits to new, previously excluded cat-
egories of workers.
Are there any other categories of workers that are still excluded from benefits?
Beyond the current crisis, how can Congress move to incentivize States to expand
their unemployment insurance systems to include the workers covered by PUA and
any other potential categories that are still excluded from State programs?
Answer. Yes, other workers who are still excluded from Pandemic Unemployment
Assistance and regular Unemployment Insurance include undocumented workers,
workers who work outside the formal economy, and new entrants who did not have
a bona fide job offer rescinded due to COVID–19, such as people just graduating
high school or college or people re-entering the workforce after incarceration. To
cover the last category of workers, I would strongly support the inclusion of a Job-
seeker’s Allowance in future stimulus measures.
One of the most important ways that States should modify their programs to
cover more workers would be to establish an inclusive definition of employer as Cali-
fornia or Washington have in place to cover the increasing number of workers in
the ‘‘gig economy.’’ There is precedent for Congress to incentivize UI system im-
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provements in States, as the Unemployment Insurance Modernization Act passed in
2009 did just that—it provided States with economic incentives to establish laws to
expand eligibility, such as adding part-time workers, adding good causes to quit,
and establishing an Alternative Base Period so workers who could not establish
earnings sufficient to qualify for unemployment benefits in the first four of the last
5 quarters of employment.
NELP’s research has also established that other barriers to access include States
increasing the amount of money workers need to earn to qualify for unemployment
insurance. Interestingly, the three States with the highest monetary eligibility re-
quirements are also States with surprisingly high numbers of workers qualifying for
PUA. Arizona, Michigan, and Ohio have the highest base period earnings require-
ments and respective continuing PUA claims of 1,416,134, 1,080,267, and 815,459
for the week ending June 6th. Congress should set a lower maximum monetary eli-
gibility requirement to deal with this.
Question. Are there any changes to the current model of collaboration between the
Federal and State governments that you think could improve the provision benefits?
Answer. In the wake of this pandemic, with all of the inequalities in the system
exposed, this is a good time to have a robust conversation about federalizing the
program and administration thereof. Short of that, the Federal Government may
need to take different approaches in different States. There are States that are
working to be more creative in finding ways to make establishing eligibility easier,
and in those cases, flexibility should be encouraged. On the other hand, the agency
should work with States with lower than average recipiency to develop an improve-
ment plan to improve access to benefits. The ETA should also report recipiency by
county and with other demographic data such as race, so that we can better under-
stand who is unable to access benefits and why.
Question. What is your assessment of how the States have handled unemployment
insurance?
Answer. Last summer, I authored a brief discussing how States were unprepared
to deal with a recession, called ‘‘Are State Unemployment Systems Still Able to
Counter Recessions?’’ Looking at the States that have struggled to provide benefits,
those States largely match up with those that I predicted to be unprepared. That
is because benefit provision is a matter of political will. States that erected barriers
to entry were caught unprepared to take on the massive amount of new claims dur-
ing the pandemic. No State has perfectly handled this unprecedented crisis, but in
States with claimant-friendly UI agencies, benefits did get to deserving workers
faster. In a couple of States in which systems were in place that created challenges
to claimants to access benefits, new administrations with a commitment to claim-
ants were even able to wrestle the system into paying appropriate benefits—Michi-
gan and Maine are good examples of this.
As a constituent and resident of the State of Maryland, I have been working with
policymakers to improve the application process here. As you may know, Maryland’s
performance in paying benefits has been largely average, but advocates are looking
to States like Rhode Island to share information about how to move roadblocks out
of the system. More efforts to improve sharing these kinds of best practices across
States would be helpful.
Question. Could you please provide an overview of ways in which State unemploy-
ment insurance policies unnecessarily keep many people from receiving benefits?
Answer. Ten States reduced the maximum benefit duration below 26 weeks,
which accounts for roughly one-quarter of the national decline in the percent of the
unemployed collecting UI. The most recent is Alabama. Last June, it cut benefits
to 14 weeks. Michigan, Missouri, and South Carolina cut maximums from 26 to 20
weeks. One State—Arkansas—cut maximum benefit duration to 16 weeks. Florida,
Georgia, North Carolina, Kansas, and Idaho have adopted sliding scales tied to
State unemployment rates.
Even after initially qualifying for benefits, the risk of disqualification for non-
compliance on a week-to-week basis has grown dramatically. More UI-eligible work-
ers than ever are being denied benefits because of stricter enforcement of a variety
of ‘‘continuing eligibility’’ requirements, especially work search. The 10 States with
the steepest increases in denials for non-separation reasons were South Carolina,
New Mexico, Florida, Mississippi, Tennessee, Massachusetts, Pennsylvania, Michi-
gan, Louisiana, and North Carolina. Five of these 10 States launched new claim fil-
ing systems in the past 5 years (New Mexico, Florida, Tennessee, Massachusetts,
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and Michigan), a factor that may be driving increases in disqualifications for process
reasons. While much attention has been paid to the antiquated COBOL systems
that most States still rely on, it is important to remember that even in some States
that have modernized their computer systems, the modernization effort came at a
time that the State was seeking to limit access to benefits.
States are imposing more onerous work search contacts and documentation re-
quirements. The 10 States with the highest rates of disqualification for able, avail-
able, and work search issues are Alaska, South Carolina, North Dakota, Utah, Ne-
braska, Idaho, Florida, New Hampshire, Ohio, and Missouri. As could be expected,
half of these States require four or five new employer contacts weekly, while nearly
all of the harshest disqualifiers have moved to systems in which work search docu-
mentation is now required to be submitted as part of each weekly or bi-weekly cer-
tification.
The focus on ‘‘program integrity’’ is both increasing denials and discouraging take-
up. The majority of overpayments, incidentally, stem from two things: work search
requirement violations (which can include making a mistake in reporting) and going
back to work and not having asking the agency to stop UI payments the first week
back.
The decline in take-up also includes denials. According to Employment and Train-
ing Administration data on erroneous denials, the denial error rate for separation
reasons in 2017 was 17.44 percent, while that error rate in 2007 was just 8 percent.
Similarly, in 2017, 17.54 percent of benefits were erroneously denied for nonsepara-
tion issues, while in 2007, the improper nonseparation denial rate was only 9.9 per-
cent. It would be helpful for the Department of Labor to examine the reasons for
this dramatic increase in agencies erroneously denying benefits.
Question. The high level of unemployment and therefore high level of disburse-
ment of benefits is applying significant pressure to State unemployment trust funds.
Could you please provide your assessment on the current condition of State unem-
ployment trust funds and in others you may know of?
How do you envision any challenges affecting future State budgets and taxes?
Is there any assistance you and states would like to see from Congress?
Answer. Eleven States have already applied for Federal loans. Surprisingly, State
trust funds were in slightly better shape entering this recession than the Great Re-
cession, but given the magnitude of this crisis, it seems unlikely that most if not
all trust funds will be exhausted. States are quickly exhausting funds.
My first suggestion would be to extend the period between the issuance of loans
and the application of interest and additional FUTA penalties during this crisis by
2 years. That would give States time and breathing room to begin to recover from
this economic crisis.
Ultimately, however, it may be the case that Federal assistance will be needed
to forgive massive trust fund balances. It is important to keep in mind that it was
the state of UI trust funds exiting the last recession that was the catalyst for the
massive wave of benefit cuts that swept States. If we exit this recession with States
with depleted trust funds and no Federal floor on benefits, we face a probable wave
of new and even more draconian cuts to access and benefit level.
PREPARED STATEMENT OF HON. CHUCK GRASSLEY,
A U.S. SENATOR FROM IOWA
I think it’s important again to note what’s going on all around us, and that is the
acknowledgment of racial injustice that has gone on for far too long in this country.
I certainly support those who are speaking out and making their voices heard in
a peaceful manner to bring about change. While change does not always come eas-
ily, I want to remind those watching this hearing today that change is possible.
In December of 2018, the First Step Act—which I introduced—became law. This
law is the most significant criminal justice reform law in a generation. A lot of peo-
ple didn’t think it was possible. But we did it by working together—it was a bipar-
tisan effort.
We’re also working together in other ways to address racial disparities, such as
in health care. The CARES Act and other COVID response efforts aim to help all,
but especially minority populations that have been hit hardest by the virus. We’ve
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knocked down financial barriers to receiving care during the pandemic and provided
support to our frontline providers to ensure access. We continue to focus attention
on the devastating effect COVID has had on nursing homes and the need to do bet-
ter for residents and staff.
The Trump administration has also announced a number of efforts to address the
disparate impact of COVID–19 on African Americans and others. I ask unanimous
consent to insert a document describing those efforts into the record. We are also
taking action beyond COVID. We’re working on a bipartisan effort to tackle the
tragic issue of maternal mortality and the need to improve outcomes for moms and
babies.
All Americans want lower prescription drug costs, but our efforts are especially
important as minorities suffer from high rates of common diseases such as diabetes
and hypertension. We’re exploring improvements for those with kidney disease, pa-
tients in need of organ transplants, and more.
We’re also in the middle of a transformation of our child welfare system. We know
that too many children end up in foster care, and that black children are overrepre-
sented in this system. Thanks to our bipartisan efforts, States are now transforming
the way they operate to keep more kids safely at home instead of placing them in
foster care.
There is obviously much more to be done, and I look forward to working with my
colleagues on both sides of the isle to continue these efforts.
Now I’d like to shift my remarks to focus on the topic of our hearing today. As
a result of COVID–19 and related stay-at-home orders, millions of Americans across
the country have lost work.
Congress passed the CARES Act to provide help to those affected in many dif-
ferent ways, including by temporarily expanding unemployment insurance, or UI.
These increased UI benefits have played an important role in helping those who lost
a job or who couldn’t work as a result of the pandemic. Given the need to act quickly
to reduce the spread of COVID–19, providing extra help through the unemployment
system made sense as a way to reduce the economic impact of stay-at-home orders.
But now we’re facing a much different situation than we were in mid-March.
States are reopening, employment recently turned positive, and we need to shift our
focus to helping people safely return to work, making sure businesses are able to
come back quickly and put the country back on a path to economic growth. We’ve
also learned a few things since the CARES Act became law.
The CARES Act provides an additional $600 per week to those receiving UI—rep-
resenting the gap between the U.S. average weekly wage and the average weekly
UI benefit. One thing we’ve learned is how poorly targeted the additional $600 per
week payments are, as it appears most recipients are being paid more on UI than
they were when working. This discourages people from returning to work or taking
a new job, delaying the recovery.
Recent research published by the University of Chicago estimates more than two-
thirds of UI recipients may receive benefits that exceed lost earnings, with more
than 20 percent potentially getting double what they used to earn—as long as they
don’t work. Some will say this is just an academic paper, and that these extra pay-
ments aren’t really an issue today.
Those folks haven’t been reading the many letters I get from Iowans each day,
and I’m sure every member on this committee is hearing from businesses having
a hard time bringing people back to work or from hard-working constituents earning
less than others they know who are getting unemployment.
Let me share a few stories from the letters I’ve received.
LETTER 1
My daughter went back to work voluntarily because she wanted to help ensure
the company would still be around after COVID–19. Many of her co-workers chose
to stay home and, due to the $600 extra per week, are making more than she is.
This isn’t right.
LETTER 2
Senator Grassley, I am a small business owner who is in desperate need for addi-
tional employees, yet I receive very few applications when I post jobs. The issue is
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the additional unemployment. With the additional $600 per week, my potential em-
ployees make more on unemployment than they would working.
LETTER 3
We are trying to hire back laid-off COVID–19-related employees (or anyone else
too) for $15/hour and we find that they are receiving the equivalent of $20/hour in
unemployment benefits. Suddenly the government became our competitor. How
could that happen?
These letters represent a small sample of those who write in daily with concerns
about the additional $600 payment. Based on these letters and others I’m sure we’ve
all received, you’d think everyone would agree we need to find a better way to help
those who have lost income. But you’d be wrong.
Despite mounting evidence of the problems these extra payments are causing, the
House passed a bill recently to extend them—not just for a month or two, but for
another 6 months, through January 2021. Given this, I asked the Congressional
Budget Office what impact these additional payments might have if continued.
Here’s what they said: roughly five of every six recipients would receive benefits that
exceeded the weekly amounts they could expect to earn from work during those 6
months.
Employment would probably be lower in the second half of 2020 than it would
be if the increase was not extended; in calendar year 2021, employment would be
lower than it would be without the extension. That doesn’t sound like a recipe for
economic growth, especially given last week’s jobs report, which shows people are
returning to their jobs and that millions more expect to return soon.
I know everyone is focused on these extra $600 checks. But let me remind every-
one of the other CARES Act policies that continue past July. First, the CARES Act
allows those out of work as a direct result of COVID–19 to get UI benefits through
December. This includes people who are infected or caring for someone infected,
those who can’t go to work because their workplace is closed due to COVID–19, and
those who rely on day care that’s not available as a result of the pandemic.
Second, individuals will get an additional 13 weeks of unemployment benefits if
they’re still unemployed after State benefits run out. And in States where unem-
ployment rates remain high, further weeks of benefits will also be available. And
most importantly, the CARES Act provides funding for what are called ‘‘work shar-
ing’’ programs.
Under these programs, instead of laying off employees, businesses with reduced
hours can pay employees a partial UI check to offset lost income. States can also
use it to bring back workers on a part-time basis if they can’t fully reopen yet. And
don’t forget, UI isn’t the only game in town here.
The CARES Act included many policies to help those affected by the pandemic,
including the employee retention tax credit, the Paycheck Protection Program, direct
payments to individuals, and other policies designed to help businesses reopen and
people to return to work. The UI system will continue to play an important role in
addressing the impacts of the pandemic. However, our efforts must be coordinated
to help workers and businesses in a way that is most productive.
I look forward to hearing from our witnesses today to learn what’s worked, what
hasn’t, and discuss how we can make sure our efforts in Congress can best support
a strong economic recovery.
HHS Initiatives to Address the Disparate Impact of COVID–19 on African
Americans and Other Racial and Ethnic Minorities
PRESIDENT TRUMP IS COMMITTED to equipping racial, ethnic, and under-
served communities with the health-care resources needed to combat the COVID–
19 pandemic. The information below outlines some of the immediate steps underway
to improve prevention, testing, and treatment of COVID–19 in minority populations
and reduce racial and ethnic disparities.
The administration recognizes that effectively addressing the underlying issue of
overall poorer health status in some racial, ethnic, and other underserved commu-
nities requires both short- and long-term strategies. Broader initiatives that address
both economic opportunity and health-care disparities are critical and the adminis-
tration has multiple such initiatives underway, including the creation of Oppor-
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tunity Zones, the White House Council on Eliminating Barriers to Affordable Hous-
ing, and HHS’s targeted efforts on chronic underlying health conditions such as dia-
betes, hypertension, maternal morbidity, and tobacco use, all of which are more
prevalent among some minorities. This fact sheet is focused on the immediate steps
the U.S. Department of Health and Human Services (HHS) has taken to address
the disparate impact of COVID–19 on African Americans and other racial and eth-
nic minorities.
Improving our Understanding of COVID–19’s Impact on Minorities
Reliable and timely data is critical to identify the populations most vulnerable to
COVID–19 or any other infectious disease. Currently, however, only a small propor-
tion of data reported to the Centers for Disease Control and Prevention (CDC) in-
cludes information on a patient’s race or ethnicity. Efforts are ongoing to improve
completeness of reporting from public health departments and laboratories, such as
developing modernized systems to enable complete and timely reporting that will be
used for COVID–19 but will be adaptable to any specific health issue in the future.
The CDC continues to collaborate with hospitals, academic institutions and State,
local, territorial, and tribal public health partners to gather and report more racial/
ethnic data. These collaborations will allow CDC to get more complete data on race/
ethnicity, reflected in preliminary data and can inform and improve clinical manage-
ment of patients, allocation of resources, and targeted public health information.
CDC Is Strengthening Data Collection and Reporting on Racial and Ethnic Minority
Populations: The CDC is publishing and updating daily available race/ethnicity data
received through case-based reporting from public health departments on the CDC
website. HHS has standardized reporting to ensure that public health officials have
access to comprehensive and nearly real-time data to inform decision making in
their response to COVID–19. Laboratory testing data, in conjunction with case re-
ports and other data, also provide vital guidance for mitigation and control activities
and is a critical piece to better understanding the impact on socially vulnerable pop-
ulations.
CDC’s COVID–NET Is Publishing Data on Hospitalizations by Race and Ethnicity:
The COVID–NET surveillance system collects data from a network of over 250
acute-care hospitals in 14 states and publishes COVID–19-associated hospitalization
rates on a weekly basis. Data are also displayed by age, gender, and underlying con-
dition. From March 1 to May 16, 2020, 82 percent (18,136) of laboratory-confirmed
COVID–19-associated hospitalizations reported to COVID–NET included data on
race/ethnicity.
CDC Shows Higher Hospitalization of African Americans for COVID–19: In March
2020, the CDC out-lined characteristics and clinical outcomes of hospitalized
COVID–19 patients in Georgia, documenting that African American patients were
overrepresented in hospital admissions relative to other racial groups.
CDC Is Using Surveillance and Epidemiology to Assess Risk Factors: CDC is comple-
menting its work to gather more real-time demographic data by using surveillance
networks and epidemiologic investigations to better understand risk factors for se-
vere COVID–19 disease. These surveillance networks and investigations will allow
CDC to gather and analyze data over time to build an evidence base about COVID–
19 and how demographics like race/ethnicity, age, sex, occupation and others may
increase a person’s risk.
CDC Is Using Electronic Health Records: CDC is actively working with multiple
vendors and aggregators of electronic health records data (EHR). EHR data are a
rich, timely source of detailed clinical and demographic data that can provide in-
sight into COVID–19 and its impact on our communities and families. Further,
these data can help us understand and address the impact of COVID–19 on minor-
ity and vulnerable communities.
Making Testing More Accessible and Affordable
Expanding Testing at Federally Qualified Health Centers (FQHCs): In May, $583
million was awarded to 1,385 FQHCs, many of which are located in medically un-
derserved communities and are often the main source of affordable and accessible
health care in those communities. Over 22 percent of people served by FQHCs are
African American.
A large majority (91 percent) of FQHCs are testing for COVID–19: These funds will
support and expand that effort. In addition to the ongoing health center program
funding, the administration has invested a total of $2 billion in community health
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centers to respond to COVID–19, ensuring that the 28 million served by FQHCs in
a given year have access to the care and testing they need.
Getting Testing at Community-Based Retail Testing Sites: HHS supports public-
private partnerships that established COVID–19 testing locations by CVS, Rite Aid,
Walgreens, Walmart, Kroger, and Health Mart to accelerate testing for more Ameri-
cans in communities across the country. The partnerships provide Americans with
faster, less invasive, and more convenient testing; protect health-care personnel by
eliminating direct contact with symptomatic individuals; and have expanded rap-
idly to areas that are under-tested and at highest risk of COVID–19. Approximately
70 percent of these sites are located in areas with high social vulnerability, accord-
ing to the CDC.
Helping States Protect Vulnerable Populations: The CDC awarded $186 million from
the Coronavirus Preparedness and Response Supplemental Appropriations Act and
an additional $631 million from the CARES Act to state and local jurisdictions to
support contact tracing, public health surveillance, and testing, all of which are fun-
damental to protecting vulnerable populations, particularly as communities take
steps to reopen. In addition, from the funds appropriated by the Paycheck Protection
Program and Health Care Enhancement Act, the CDC has awarded $10.25 billion
to States to increase testing in 64 State and local jurisdictions, and the Indian
Health Service (IHS) will be allocating $750 million to increase testing.
Making Treatment More Accessible and Affordable
Paying for Care of Uninsured Individuals: HHS is using a portion of the $175 billion
Provider Relief Fund to pay for COVID–19-related care of uninsured Americans.
Doctors, hospitals, and other providers who have provided testing or treatment for
uninsured individuals with a COVID–19 diagnosis can request reimbursement
through the program and will be reimbursed generally at Medicare rates, subject
to available funding.
Protecting Patients From Debt Collectors: HHS also is protecting uninsured individ-
uals coping with COVID–19 by prohibiting providers from seeking to collect out-of-
pocket payments from a patient that are greater than what the patient would have
otherwise been required to pay if the care had been provided by an in-network pro-
vider. This guarantees that uninsured individuals will not have hospitals or other
health-care providers who receive funds from the Provider Relief Fund attempting
to collect additional sums for the care provided to support COVID–19 treatment and
recovery.
Strengthening Access to Treatments for Substance Use Disorders and Serious Mental
Illnesses: Ensuring consistent and ongoing treatment for substance use disorders
and serious mental illness is important, particularly as the pandemic has added sig-
nificant new stressors that may be felt more acutely by the physically and finan-
cially vulnerable. The Substance Abuse and Mental Health Administration
(SAMHSA) released $110 million to State, local, and tribal governments to continue
to expand access to appropriate treatments. Whether for preexisting mental health
conditions or for mental health challenges arising during this emergency, making
sure there are enough resources for communities is an essential role for which
States can use this funding.
Supporting Hospitals That Serve Low-Income Communities: As elective procedures
were canceled, the continued financial viability of some hospitals has been threat-
ened—especially those that were already operating on thin margins because they
serve rural populations or care for a disproportionately high number of Medicaid,
Medicare, and uninsured patients. The Health Resources and Services Administra-
tion (HRSA)’s Federal Office of Rural Health Policy awarded $150 million to assist
hospitals funded through the Small Rural Hospital Improvement Program (SHIP)
to assist capacity building in small hospitals to help them provide services to fight
COVID–19. Because of the importance of these rural communities, HHS further al-
located $10 billion to support rural providers and targeted an additional $2 billion
to hospitals with a disproportionate share of uncompensated care and seeing 100 or
more COVID–19 patients.
Tailored Guidance for Individuals and Communities Most at Risk
CDC Offers Guidance for At-Risk Populations: Through data collected by doctors and
epidemiologists across the country, we know that people with underlying health con-
ditions are at elevated risk for complications from COVID–19. The CDC has pub-
lished information for people who need to take extra precautions. Conditions like
diabetes, hypertension, cardiovascular disease, asthma, cancer, and other chronic
health conditions that are prevalent at higher rates in some minority communities
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can elevate the risk for complications due to COVID–19. The published information
offers guidance on how to protect those most vulnerable populations and important
information about reducing the risk of severe illness from COVID–19 infection.
Expanding Telehealth Options to Ensure Access to Needed Care
Expanding Access to Telehealth Services: At-risk populations can face additional
challenges accessing health care, including transportation and a higher risk for in-
fection. The Federal Government, particularly the Centers for Medicare and Med-
icaid Services (CMS), has taken steps to make accessing care through telehealth
services easier. For example, CMS is helping people enrolled in Medicare to receive
medical care using telecommunications technology. CMS also announced a waiver
allowing doctors to provide telehealth and other services using communications tech-
nology wherever the patient is located, including at home and outside of designated
rural areas, even across State lines. The types of telehealth that can be offered can
also be flexible. Typically, devices must be equipped with audio and video capability
to provide telehealth services. Now, some telehealth visits can be billed for audio-
only encounters. The HHS Office for Civil Rights (OCR) also issued a Notification
of Enforcement Discretion to empower covered health-care providers to use widely
available communications applications without the risk of penalties imposed by OCR
for violations of Health Insurance Portability and Accountability Act of 1996
(HIPAA) rules for the good faith provision of telehealth services.
Rural Health Clinic (RHC) and FQHC Flexibilities: RHCs and FQHCs are essential
parts of the health-care system, particularly for underserved communities and the
uninsured. To expand upon flexibilities to increase access to care, CMS released in-
formation for RHCs and FQHCs on Telehealth and Virtual Communications Flexi-
bilities during COVID–19. Using telehealth protects patients at highest risk from
potential exposure to COVID–19, allows for the provision of health care to manage
both chronic and acute health issues, and also helps those who may have transpor-
tation challenges in getting to their provider.
Expanding Funding for Telehealth Programs: HHS, through HRSA, has awarded
money through several different programs to expand telehealth availability. First,
HRSA awarded $11.5 million through Telehealth Resource Centers. HRSA also
awarded $20 million to increase telehealth access and infrastructure for providers
and families to help prevent and respond to COVID–19.
Telehealth for Medicaid Substance Use Disorder Services: CMS released an Informa-
tional Bulletin to States that identifies opportunities for telehealth delivery methods
to increase access to Medicaid services for substance use disorder.
Strengthening Outreach and Effective Communication on COVID–19 to Mi-
nority Communities
Improving Outreach and Communication on COVID–19 to Minority Communities:
HHS’s Office of Minority Health announced a competitive funding opportunity to in-
vest up to $40 million for the development and coordination of a strategic network
of national, State, territorial, tribal, and local organizations to deliver important
COVID–19-related information to racial and ethnic minority, rural and socially dis-
advantaged communities hardest hit by the pandemic. In addition, the award will
support linkages to COVID–19 testing, vaccination, other healthcare services and
social services in communities highly impacted by or at greater risk for COVID–19.
Enforcing Civil Rights Laws During the COVID–19 National Public Health Emer-
gency: In March 2020, OCR issued a bulletin to ensure that entities covered by civil
rights authorities, including section 1557 of the Affordable Care Act, are aware that
their obligations under laws and regulations that prohibit discrimination on the
basis of race, color, national origin, disability, age, sex, religion and exercise of con-
science in HHS-funded programs, are not suspended in the provision of health-care
services during COVID–19.
Ensuring Access to Language Assistance Services During the COVID–19 National
Public Health Emergency: In May 2020, OCR issued a bulletin to covered health en-
tities to ensure they continue to serve individuals with limited English proficiency
(LEP) during the COVID–19 emergency. Under regulations implementing section
1557 of the Affordable Care Act, recipients, including hospitals and other health-
care providers, must take reasonable steps to provide meaningful access to individ-
uals with LEP eligible to be served or likely to be encountered in their health pro-
grams and activities.
National Network to Eliminate Disparities (NNED) in Behavioral Health: SAMHSA
continues to operate the NNED in Behavioral Health, which is a network of over
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1,100 community-based organizations across the country serving primarily ethnic
minority populations. The NNED provides training and informational resources.
During the COVID–19 pandemic, the NNED has accelerated the development and
release of informational materials, including CARES Act provisions, to these com-
munities. It has hosted virtual webinars and roundtables focusing on strategies to
address mental health and substance use issues exacerbated by the pandemic in mi-
nority communities.
Multilingual COVID–19 Information: The Food and Drug Administration (FDA) has
increased outreach by developing and disseminating COVID–19 health education
materials for consumers in multiple languages. The agency’s official COVID–19
webpage has been translated into Spanish and includes the FDA COVID–19 Fre-
quently Asked Questions (available in English and Spanish). The FDA has also cre-
ated a COVID–19 Multilingual Resources webpage that features a growing collec-
tion of educational materials in Spanish, Simplified Chinese, Korean, Vietnamese,
Tagalog, among other languages. To further enhance outreach and dissemination,
the FDA launched a COVID–19 Bilingual (English/Spanish) Social Media Toolkit
that features consumer friendly messages and culturally appropriate graphics.
PREPARED STATEMENT OF LES NEILLY, PRESIDENT,
NEILLY CANVAS GOODS COMPANY
Good afternoon, Chairman Grassley, Senator Wyden, and the other distinguished
members of the Senate Finance Committee.
It is an honor and a privilege for me to represent small business owners across
our great country, and to express my experiences regarding the extra $600 per week
pandemic unemployment compensation enacted as part of the CARES Act. I know
I am not alone as countless other small business owners have had similar experi-
ences. My name is Les Neilly, president and controlling owner of Neilly Canvas
Goods Company, a fourth-generation family business that manufactures tarpaulins
(tarps) for trucking and industrial use and we also make, install, and service com-
mercial and residential awnings in the fabled Strip District in Pittsburgh, PA.
I got thrown into the business at the age of 20 upon the sudden and untimely
death of my father, Harry Neilly, at the age of 47 on May 11, 1976. I helped my
mother, Faye Neilly Renz (later remarried) run the business until her retirement
in 2013 at age 81 after she had a minor stroke which caused her to lose her periph-
eral vision to the left in both eyes. She failed the mandatory eye test required by
the State of Pennsylvania that all stroke victims must take, lost her driver’s license,
and immediately declared, ‘‘I retire.’’
My brother Drew and I have been running the business ever since and became
the owners when our mother signed the business over to us effective January 1,
2019. We have nine full-time employees and two part-time employees between our
two locations. We have one full-time employee in our satellite location in Dundalk,
MD outside of Baltimore.
We offer our employees medical coverage. We pay about 60 percent of the pre-
mium and the employees pay the remaining 40 percent. We provide vision coverage
for all our employees, and we offer dental insurance as an option the employees can
take as a payroll deduction. We also offer AFLAC insurance products as a payroll
deduction.
We provide three paid personal days per year and paid vacation of 1 to 3 weeks
earned depending on the amount of seniority. We pay the six standard holidays:
New Year’s Day, Memorial Day, Independence Day, Labor Day, Thanksgiving, and
Christmas.
We also offer a SIMPLE IRA retirement plan for all who would like to participate.
The employees can contribute any amount they choose up to the maximum limit as
legislated. Neilly Canvas matches up to 3 percent of the amount the employee puts
into the SIMPLE IRA plan.
Our employees make between $14.00 and $21.25 per hour, in addition to the bene-
fits described above. We also pay time and one-half for all hours worked over 40
hours per week. With the passage of the CARES Act, the extra $600 per week of
unemployment compensation amounts to $15.00 per hour based on a 40 hour work
week. The pandemic unemployment compensation alone pays our lowest-paid em-
ployee more than they make working a 40 hour work week, and all they had to do
was sit at home and do nothing.
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Pennsylvania Governor Wolf announced the shutdown of all non-essential busi-
nesses on Thursday, March 19th, effective immediately. Since we make tarps for the
trucking industry, which is an essential industry, we were able to continue to oper-
ate. However, due to the lack of orders from our customers, we laid everyone off
effective Monday, March 23rd, announced at the end of the day on Friday, March
20th. Drew and I went to work every day to answer the phones and make the small
orders that came in.
By the end of the second week of the employees being laid off, we had enough
orders to call two people back to work for Monday, April 6th. We received some ad-
ditional orders that week and called two more people back starting on Thursday,
April 9th. We continued to operate with four employees in Pittsburgh and the one
employee in Dundalk, MD for the next 3 weeks.
On the third week back to work, Friday, April 24th was payday. We pay our em-
ployees bi-weekly, with a one week lag from the end of the pay period until the em-
ployees get paid for the previous two weeks worked on the following Friday.
Just before noon on April 24th, one of the employees completed an order and
brought it up to my office. They asked to see their pay stub, as all of our employees
have direct deposit. I handed it to them, and they opened the envelope and looked
at it, then started complaining to me and asked me why they were working and the
employees at home were not. They then stated that their co-workers who were still
at home laid off were making more money than those employees who were working,
and that wasn’t fair. They told me that they and their spouse were going back on
unemployment, which I missed hearing during our conversation, and they didn’t
show up for work on Monday, April 27th, or Tuesday, April 28th.
Immediately after the first employee left, a second employee came into my office
with the same complaint, saying they were missing out on a lot of money by work-
ing and not being laid off. They asked if it was possible to have a rotating schedule
with the employees who were still laid off so everyone could participate in getting
the extra $600 per week instead of their co-workers who were laid off the entire
time. They stated they knew I was trying to run a business, and understood that
I had to make tough decisions, but they were missing out on the extra $600 per
week the Federal Government mandated for the laid-off workers every week, and
they wanted to share in the ‘‘pot of gold.’’
We applied for the Paycheck Protection Program loan through a small community
bank that we had worked with previously. We received immediate approval and the
money was deposited in our payroll account about a week later, on Tuesday, April
28th.
Once the PPP money hit our account, I called all the employees who were laid
off and told them to report to work on Wednesday, April 29th, because we received
the PPP money. The remaining laid-off employees reported for work on Wednesday,
April 29th, including the married couple who declared on Friday, April 24th, they
were going back on unemployment.
When the married couple checked into getting paid for a partial week of unem-
ployment, they discovered they were ineligible for two days of unemployment and
a partial payment of the extra $600. Since Congress legislated the extra $600 per
week in unemployment compensation, the married couple figured they could just
put themselves back on unemployment. It cost them two days of wages. That was
another negative ramification of this provision.
I held a meeting with all employees first thing on Wednesday, April 29th. I ex-
plained the PPP loan and our requirements as an employer. We are responsible for
getting everyone back to work who was employed previously, and the company must
use at least 75 percent of the PPP money for payroll and medical benefits, and 25
percent of the PPP money for a few other expenses to be eligible for loan forgive-
ness. We also instituted paying every employee a $20.00 per day bonus for each day
they worked through the end of June, retroactive to when we called back the first
two employees. We did this as an attempt to ease the resentment of the people who
worked versus the laid-off employees. Since everyone was called back to work, ev-
erything now seems to be okay regarding employee attitudes and morale.
May I suggest, as a business owner and someone who, like many other small busi-
ness owners who have experienced similar situations as I did regarding employees
who were working being resentful that they were not receiving the extra $600 per
week unemployment compensation like their co-workers who continued to be laid
off, DO NOT pay someone more money than they make in a 40-hour work week.
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Pay the laid-off workers the full amount they earn in a 40-hour work week to make
them whole, but nothing extra. Paying someone laid off more than they make in a
week for unemployment compensation is rewarding them for being laid off and pe-
nalizing an employee who is helping the company survive and move forward because
they are working.
Owning a small business, or any size business, is hard enough on a daily basis
without having to deal with situations created by Congress that put business own-
ers in a position to mitigate resentments between employees. Employees who are
working to help keep the business afloat feel frustrated and angry that their laid-
off co-workers are reaping ‘‘rewards’’ bestowed upon them by elected representa-
tives, many of which have never owned a business to understand the ramifications
of policy decisions and the potential precarious situation it puts business owners in.
Further, I am concerned that small business owners who survive this historic
downturn will be saddled with high unemployment taxes as a result of this policy.
I worry that this $600 per week incentive will entice employees to remain on an
already overburdened unemployment system rather than return to work.
Thank you for allowing me to express my experiences regarding the extra $600
per week Federal pandemic unemployment compensation. I appreciate the oppor-
tunity to appear in front of the Senate Finance Committee representing small busi-
ness owners, and I hope you consider my testimony when contemplating future leg-
islation to extend the CARES Act unemployment compensation and the amount paid
to laid-off workers on a weekly basis.
QUESTIONS SUBMITTED FOR THE RECORD TO LES NEILLY
QUESTIONS SUBMITTED BY HON. PATRICK J. TOOMEY
Question. Many employers across Pennsylvania and across America are facing
similar circumstances in which employees are discouraged from returning to work
because of distorted government incentives. As you know, approximately two-thirds
of Americans on UI are earning more on unemployment than they previously were
while working, meaning that many small businesses across America will be faced
with this same difficult situation as you were. The loss of a job is not merely the
loss of a paycheck, but is also a loss of routine, purpose, and connection with others.
Do you believe that long-term unemployment could have negative effects on Amer-
icans’ well-being and mental health?
Answer. I do believe that long-term unemployment has a negative effect on the
American people, as we have seen a rise in suicides, depression, overdoses, and do-
mestic violence since the Wuhan virus led to the shutdown of much of the economy
and businesses. I cite the article from The Washington Post from May 4, 2020. This
is the link to the article, https://www.washingtonpost.com/health/2020/05/04/
mental-health-coronavirus/. When people aren’t working and they are at home, they
have more time to think and dwell on the negatives, questioning their worth, they
feel they are letting their families down, and it could lead to a tragic outcome for
the individual and have a direct effect on their family unit.
Question. Do you believe that the extra $600 UI benefit encourages workers to
stay on UI for a longer period of time?
Answer. Yes, I believe the extra $600 per week UI benefit has a negative effect
on the unemployment situation. I feel it encourages employees to want to stay on
unemployment because in about 70 percent of the time, the laid off worker makes
more money with the extra $600 UI than if they were working and getting their
regular paycheck for a week. As I mentioned in my written and oral testimony, it
also creates animosity and resentment from the employees who have been called
back to work to help the company while their co-workers who are still laid off are
making more money sitting at home not helping the company move forward. Is that
fair to the employee working, I think not, and it created an awkward situation for
me to be in when our employees complained to me about the scenario described
above. I was trying to run a business and make decisions to help keep it afloat
under the strained circumstances caused by the shutdown, and I also had to deal
with employee unrest caused by our Federal elected officials giving laid off workers
an extra $600 per week UI.
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PREPARED STATEMENT OF JOSÉ JAVIER RODRÍGUEZ,
STATE SENATOR, FLORIDA SENATE
Chairman Grassley, Ranking Member Wyden, and honorable committee members,
the following is my testimony submitted for your consideration in my capacity as
a State legislator serving in the Florida Senate who has advocated for out-of-work
constituents.
Unemployment systems, when they work, give workers, their communities and of-
tentimes even employers an economic bridge over troubled water. In these unprece-
dented times, with the CARES Act 1 you have done a great deal of good. For that,
I thank you on behalf of the constituents that I serve back home in Florida.
Florida entered this economic crisis with one of the (if not the) least prepared un-
employment systems. None of its flaws were hidden.
There is no State that currently provides a fewer number of weeks. Florida is
near the bottom in State benefit amounts, capped at $275 per week. Florida also
has major gaps in eligibility rules; and because of those rules, last year only 11 per-
cent of out-of-work Floridians were able to collect unemployment, lower than all but
one other State. Added to that, the application and payments system is infamous
for its failures, as well as for how persistent those failures are, having endured un-
changed through several gubernatorial terms, successive audits and prior Federal
intervention. Even before COVID–19, Florida was not meeting DOL 2 metrics on
promptly paying benefits.
I serve a half-million residents of Miami-Dade County in the Florida Senate. We
live and breathe trade, tourism, and hospitality.
The CARES Act has lifted many of my constituents when Florida’s system alone
would not have. The PEUC program 3 adds 13 weeks to our paltry 12 weeks. Last
week our first constituents got on it; without it they would have been cut off without
having yet found work again.
The PUC program 4 adds $600 a week until July 31st. Its design is simple. It goes
right where it’s needed: to out-of-work Americans who spend it in their communities
on necessities. It is the easiest program to administer, and that is a significant ben-
efit in States like Florida with so many problems getting benefits paid.
Ricardo, 56, worked as a bellman at the Fontainebleau Hotel for 81⁄2 years before
his layoff in March. A diabetic, he loses his health insurance this month. He wants
to get back to work but his industry has not returned. He wanted me to tell you
the added ‘‘$600 is necessary for me to survive, including being able to pay for my
medications. I have been paying my taxes since I was 14 years old. I have been
working for decades. I’ve never collected unemployment. This money is not a luxury,
it’s a necessity.’’
Karen, 30, worked in marketing at Gulfstream Park Racing and Casino for 9
years before being laid-off during the pandemic. She hopes to return and is looking
for work in the meantime. A single mother to a 9-year-old daughter, she needs the
$600 added benefit to keep paying her bills. She wanted me to tell you ‘‘[m]y fear
is that me and my daughter will end up homeless without this. I waited over a
month to receive Florida’s unemployment and honestly $275 a week is just not
enough. This Federal aid is important to help us for all we do as taxpayers.’’
Randi, 47, is the mother of an 8-year old boy and 5-year old girl. A recruiter for
over 20 years, she owned her own business for the last 4. She had a thriving busi-
ness until the pandemic and after an ‘‘arduous’’ application process she was able to
file on March 22nd; but only just received her first payment last week. She needs
the economy to pick back up to get back to work and wanted me to tell you
‘‘[u]nfortunately this $600 has become vital to me and my family. We are relying
on that money for basic needs, like food, utilities, etc., as well as finally being able
to buy my daughter a toy. Seems simple, but we’ve been in quarantine since March
15th and I haven’t been able to buy my children anything.’’
1 The Coronavirus Aid, Relief, and Economic Security Act, Public Law No. 116–136 (March
27, 2020).
2 U.S. Department of Labor.
3 Pandemic Emergency Unemployment Compensation or ‘‘PEUC’’ was created by section 2107
of the CARES Act.
4 Federal Pandemic Unemployment Compensation or ‘‘PUC’’ was created by section 2104 of
the CARES Act.
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With the CARES Act, you also shored up a highly successful layoff aversion pro-
gram called Short Time Compensation, or STC. Businesses want to do the right
thing and often need help, like Bernie, a small business owner we assisted. He em-
ployed 17 people before the crisis and will avoid layoffs by implementing a work-
share program with an STC.
Unemployment is a Federal/State partnership. Oversight of the administration of
our unemployment systems is on your side of the deal. Despite the successes of your
programs, that oversight is sorely needed.
On top of design flaws coming into the crisis, Florida’s system was, and continues
to be, slow, unreliable and inept in its response to the crisis in general; and in its
deployment of CARES Act programs specifically. Other State agencies in Florida
have been able to deploy Federal flexibility and resources effectively; but not the De-
partment of Economic Opportunity, or DEO, who administers our unemployment
programs.
For hundreds of thousands of Floridians the system was effectively down, inoper-
able and inaccessible, for at least the first half of the crisis, punctuated by unmet
ever-changing goals and seemingly-never-ending mishaps. So bad was it that Flor-
ida earned the distinction of being the only State in the Union paying out less than
it received during the period. Florida’s employers have dutifully paid taxes to fund
a system we all needed to function; but it did not.
Leah, 63, worked part-time for an airline to pay the bills. A recent survivor of
lung cancer whose job could not be performed remotely, she was considered ‘‘com-
promised’’ and became unemployed on March 20th. She could not apply because the
system crashed daily for weeks. After DEO, out of sheer desperation, created a
paper application, she mailed one in on April 13th. The first day she was ‘‘in the
system’’ was May 3rd. Were it not for assistance from our office she would not have
been able to adjust the date of her claim and would have lost over a month of bene-
fits.
The ordeal for many is like the ancient military punishment of running the gaunt-
let. Unlike Leah, Randi, Karen, and Ricardo, thousands have not made it through
the gauntlet and are left in limbo for weeks and months. No response. No reasons
given. No assistance from DEO. More than half speak credibly of threatened or cer-
tain eviction once a moratorium is lifted. Many ask about food assistance, going
hungry for the first time in their adult lives. Savings decimated, retirement plans
a memory, others worry for their high school graduates whose futures they are less
certain to support. They include a worker furloughed from a department store, an-
other laid off after 20 years in the restaurant industry; single parents with young
children and caretakers of children with disabilities or frail parents.
Florida’s failures have worked a special hardship on people, adding needless anx-
iety and uncertainty to economic pain. There’s a bipartisan group of legislators
whose offices field a bulk of the calls. Each of us has a list we manage of critical
cases to informally bump up to DEO and finally get them paid. The lists have dif-
ferent names but internally we called ours the ‘‘exigent circumstances’’ list. Appli-
cants get on whose live circumstances, including those who depend on them, are es-
pecially difficult without income. Applicants also get on—and these are real exam-
ples—if we hear one say ‘‘I’m at the end of the road;’’ a middle-aged man say ‘‘I’m
struggling to maintain a positive attitude and my wife is afraid that this could be
the death of me—please help sir, I’m desperate;’’ a young man say he fears ‘‘some-
thing very bad’’ will happen to him if he cannot get back on his feet; or that a moth-
er of a 2-year-old is at the ‘‘end of [her] rope.’’ We err on the side of caution in alert-
ing the appropriate people, of course, before adding them to the list.
The DEO has been so inconsistent and unreliable in deploying assistance—having
yet to put in place a system where the majority of call-takers are both trained and
have authority to address callers’ issues—and has done such a poor job commu-
nicating its last-minute and ever-changing rules around CARES Act programs, that
networks of legislators, applicants, and journalists dispense the latest advice with
greater efficiency than DEO. The best tips on making it through the system are ef-
fectively crowdsourced.
Florida remains an outlier in deploying the CARES Act. In Florida, of those
deemed ineligible for traditional unemployment only about one-fourth end up quali-
fying for the COVID–19 catch-all program in the CARES Act, the PUA program,5
5 Pandemic Unemployment Assistance or ‘‘PUA’’ was created by section 2102 of the CARES
Act.
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that includes coverage for independent contractors, the self-employed and others
who normally would not be eligible. That rate is far below that of other States. It
remains unclear why, although Florida’s late start—creating a PUA application 5
weeks after the CARES Act was passed—may account for part of the explanation.
One of the latest issues to surface is that it appears DEO is awarding many appli-
cants the minimum level of benefits under the PUA as a default without advising
them of the need to request a ‘‘monetary determination’’ to adjust their benefits up
to the level they are entitled to receive. Such a self-inflicted wound further deprives
the State of Florida access to our own tax dollars via the CARES Act.
In other States, individuals exhausting traditional benefits are transitioned onto
PEUC’s additional weeks as automatically as possible; but not in Florida. Despite
early promises to make it seamless, DEO created a PEUC application for those who
have exhausted traditional benefits, increasing the likelihood that many of those ap-
plicants will never get onto PEUC.
Finally, it appears that the State of Florida has only paid out about half of the
$600 weekly benefits available to Floridians under the simplest program to admin-
ister: the PUC. This comes more than two months since the CARES Act was signed
into law.
The health of Florida’s unemployment trust fund is an illusion that relies on the
Nation’s stingiest benefit levels and on an architecture so cumbersome and inacces-
sible for so long that it seems that way by design. Florida’s experience should serve
as a lesson to other States. The economic crisis may tempt others to do what Florida
did in the wake of the last economic crisis: shrink, starve and ignore its unemploy-
ment system. If they do, it will be a State legislator from their State delivering
these remarks next time.
Continued Federal attention is warranted in the form of Federal oversight of
States’ administration of unemployment systems to ensure full and fair access to
benefits, along with resources for them to modernize their infrastructure. In addi-
tion, CARES Act programs ought to remain in place until a recovery has reached
all major sectors of our economy. Otherwise, for communities like mine I fear it will
set us back in our path to recovery.
PREPARED STATEMENT OF SCOTT B. SANDERS, EXECUTIVE DIRECTOR,
NATIONAL ASSOCIATION OF STATE WORKFORCE AGENCIES
Chairman Grassley, Ranking Member Wyden, and members of the committee, on
behalf of the National Association of State Workforce Agencies (NASWA), I thank
you for the opportunity to testify and submit written testimony to discuss the efforts
made by our members to provide essential unemployment insurance benefits to
workers who have lost their jobs because of and during the COVID–19 pandemic.
The members of our Association are State leaders of the publicly funded workforce
development system including the unemployment insurance (UI) program. NASWA
serves as an advocate for State workforce programs and policies, a liaison to Federal
workforce system partners, and a forum for the exchange of information and prac-
tices. NASWA is a private, non-profit corporation, governed by a Board of Directors
elected from the Administrators of the State workforce agencies. We are nonpartisan
and our membership includes all 50 States, the District of Columbia, Guam, Puerto
Rico, and the Virgin Islands.
Our dedicated members have been working tirelessly to implement the new unem-
ployment insurance programs under the CARES Act which was signed by the Presi-
dent on March 27, 2020, just over 2 months ago. The new Federal Pandemic Unem-
ployment Compensation (FPUC), the additional $600 to be made with other UI pay-
ments, was implemented by all States by the end of April. The new Pandemic Un-
employment Assistance program (PUA) requires State UI programs to pay self-
employed individuals on a State-wide basis which has never been done before in any
State. Our information is that 38 States and the District of Columbia paid PUA by
the end of April and all States by the end of May.
Claims both in the regular programs and the new UI programs have increased
drastically. In February 2020, the average number of weekly payments was 2.1 mil-
lion. By May 2020, the average number of weekly payments skyrocketed to 29.4 mil-
lion. In contrast, during the Great Recession, the peak was just 11.7 million (See
Figure 1). No entity, public or private, would reasonably have contingency plans in
place for this scenario to which States have responded, yet our member agencies
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have continued to work through these overwhelming workloads tirelessly, and with
great dedication. Against this backdrop, I will highlight three of the primary chal-
lenges that States are experiencing during this UI crisis: Promoting Integrity, Trust
Fund Solvency, and Administrative Funding (to handle the increased volume, in-
cluding the area of information technology (IT) systems).
1. PROMOTING INTEGRITY
Our members work hard to assure the integrity of the unemployment insurance
program. An important part of integrity is making sure that key program compo-
nents are easy for claimants to understand and for agencies to administer.
NASWA, in partnership with the U.S. Department of Labor (USDOL), developed
the UI Integrity Center in 2015 which has allowed States to share best practices,
assisted States in reducing improper payments, created and utilized State intensive
services teams, the national integrity academy, the integrity knowledge exchange
and more recently, the integrity data hub (IDH).
As a result of the large number of regular UI State and PUA claims, States are
seeing a rise in fraudulent activity. There are four significant factors that have con-
tributed to the increase. First, despite rules allowing States 21 days to make pay-
ment, there is intense public pressure to issue payments quickly. Second, the large
number of incidents over the past few years where massive amounts of stolen per-
sonal identifying information has occurred. Third, the lack of individual employment
data for States to verify PUA claims. Finally, the ability of claimants to self-certify
eligibility for a PUA claim.
As States rapidly adjust to these new and increasing threats, the IDH is playing
an integral role. The IDH is an innovative data and information sharing system
that for the first time allows States to immediately compare mass volumes of claims
with each other. The IDH allows for use of a suspicious actor repository, suspicious
email domains, multi-State cross matching, monitoring foreign and suspicious IP ad-
dresses, and fraud alerting. In addition, the IDH harnesses the power of the inves-
tigative work of all States for the benefit of each individual State as they report
their findings. States are acting quickly to utilize the IDH, and as they increasingly
begin using this system, the national fraud schemes we have seen recently will be
detected in all States as soon as they are detected in one State.
These cross State collaborative efforts will continue to enhance NASWA and its
members’ ability to promote nationwide efforts on the integrity of all UI claims.
2. SOLVENCY OF STATE UNEMPLOYMENT INSURANCE (UI) TRUST FUNDS
Recessions offer significant challenges to maintaining adequate State UI trust
funds due to increased benefit outlays, extended durations of claims, and declines
in taxable payrolls resulting in decreased UI revenues. The crisis currently facing
many State UI trust funds is unlike anything in the history of unemployment insur-
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ance. During the Great Recession, 36 States depleted their trust funds leading to-
ward the ultimate cumulative borrowing of $51.2 billion from Federal general reve-
nues to finance regular UI benefits.
As a result of the economic impact of the pandemic, trust fund balances are begin-
ning to rapidly deplete. At the end of 2019, the total trust fund balances in all
States totaled $75.7 billion. This amount has dropped to $52.2 billion as of May 31,
2020. Since March 31, 2020, eight States have seen their trust fund balance decline
by more than 50 percent and another 21 States have seen trust fund balance reduc-
tions ranging from 25 percent to 50 percent.
Adding to this concern, States have already collected approximately 65 percent of
their tax revenue for 2020. With the dramatic increase in weekly claimants, the out-
flow of benefits will far exceed the deposits, exacerbating the declining trust fund
balances.
To determine UI tax rates for employers in 2021, the level of the State’s trust
fund is a key variable in setting the applicable tax rate. This determination is usu-
ally done between July to September, so the status of each State’s trust fund in the
next few months will have significant bearing on next year’s tax rate. With dras-
tically lower balances, we can expect significant increases in UI tax rates in most
States, which will hamper businesses as they try to bounce back economically and
generally hinder our economic recovery.
There are two options for Congress to consider in averting this impending trust
fund crisis. First, Congress could enact legislation to forgive trust fund loans made
to States this year or next. Providing loan forgiveness would help ensure employers
avoid layoffs that would otherwise occur, due to an increase in employer UI taxes.
Another option would be for Congress to direct a Federal payment to State UI
trust funds, which would provide immediate support. Funds could be distributed to
the States by using the formula process as done with administrative funding or a
Reed Act (Pub. L. 83–567) distribution—this approach was utilized to address a
rapid increase in unemployment after the 9–11 attack (Pub. L. 107–147 Section
209).
3. ADMINISTRATIVE FUNDING INCLUDING NEED FOR FUNDING FOR IT SYSTEMS
In 2010, the week ending January 2nd, was the peak week of claims payments
during the 24 months (May 2008 to April 2010) of the Great Recession (Figure 2).
States paid a total of 12.1 million claimants with roughly 6.0 million in regular
State UI claims, along with 5.6 million claimants in Emergency Unemployment
Compensation (EUC), a new program at the time. In addition, States had to add
an additional $25 Federal Additional Compensation (FAC) to each claim.
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For comparison, last year for the week ending May 11, 2019, States paid a total
of 1.6 million claimants. State workforce agencies’ staffing levels reflected these
lower claim levels. These reduced staffing levels were also a result of flat lined fund-
ing prior to the pandemic.
In sharp contrast, the week ending May 16, 2020, States paid a total of 30.0 mil-
lion claimants with roughly 18.9 million in regular State UI claims, along with 10.7
million claimants in Federal Pandemic Unemployment Assistance (PUA), a new na-
tional program. In addition, States were asked to add the FPUC $600 to each claim.
These phenomenal increases in claims explain some of the extraordinary challenges
States have faced in processing and paying UI claims during the pandemic.
Through this crisis and the rising number of claimants and new programs, States
have made significant changes in the way they operate their UI programs. States
have waived work search and other requirements to ensure that individuals who
have lost their jobs are not penalized by the pandemic. States have mobilized new
call centers; hired, borrowed, and outsourced staff; and purchased new and /or modi-
fied existing IT systems. While the additional $1 billion funding provided to the
States in the Families First Coronavirus Act has assisted States to meet the chal-
lenges of the CARES Act, there is more that needs to be done to manage the contin-
ued downturn and future recessions.
UI Administrative funding continues to decline in real dollars relative to the
growth in the number of claimants covered in the program. The administrative
funding factors used to determine the actual costs of providing adequate funding
levels for State operations remain largely unchanged since the mid-1980s. An exam-
ple of this steady erosion in the funding is evident by a specific line in UI appropria-
tion language which is particularly critical now, ‘‘an additional $28.6 million shall
be available for obligation for every 100,000 increase in the AWIU level,’’ a dollar
amount which has remained unchanged since the mid-1980’s. A simple inflation ad-
justment to the dollars per 100,000 claim increase would almost double the amount
of marginal funding available to States to administer the program during the cur-
rent COVID–19 period.
Since the early 2000s States have been required to annually report to the USDOL
an estimate of the funding levels they need to run an effective program. Because
of budget and appropriation limits (outside of State control), the estimated funding
levels have never been achieved, forcing States to constantly understaff and under
resource their operations. This year-to-year underfunding has cumulatively affected
States’ abilities to make capital investments, specifically in IT resources.
As Congress addresses the immediate need to provide additional funding for State
UI operations, NASWA also recommends updating the basic methodology of the ad-
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ministrative UI funding process to ensure a strong UI system that will meet today’s
needs as well as the needs of potential further recessions.
In closing, as Congress considers extending or adding new programs, NASWA and
our member States look forward to working with you to ensure that integrity is
maintained and that any extensions or new programs for claimants are delivered
in an efficient and timely manner.
Thank you for providing this opportunity to testify on the three important issues
of Promoting Integrity, Trust Fund Solvency and Administrative UI Funding.
NASWA looks forward to continuing to work with the committee to address the
needs of our member States, job seekers, and employers during these challenging
times.
QUESTIONS SUBMITTED FOR THE RECORD TO SCOTT B. SANDERS
QUESTION SUBMITTED BY HON. JOHN THUNE
Question. Unemployment offices in States across the Nation continue to be over-
whelmed with unemployment claims, even as the number of unemployment claims
level off. In addition, States’ unemployment systems are dated. These two factors
likely make additional changes to unemployment programs potentially overly bur-
densome on unemployment agencies.
Can you speak to the general capacities of State unemployment systems and to
what degree they may be able to accommodate further programmatic changes in
terms of the administration of unemployment compensation?
Answer. The challenges States faced in implementing the CARES Act programs
were driven by several factors:
• Staffing and resources were at the lowest level in decades, due to historically
low unemployment rates before the pandemic.
• The sudden increase in demand was unlike any other ever in the history of
the UI program.
• The CARES Act created three new programs, all of which were immediately
effective. And given the lead time for USDOL to issue guidance, essentially
retroactively.
• Annual appropriations for UI Administrative funding have been in long term
decline since the 1980s, resulting in inadequate investments in the mod-
ernization of UI information technology systems.
If States were asked to implement further programmatic changes, similar chal-
lenges would result, but Congress could help minimize those struggles by:
• Enacting legislation with a prospective implementation date, providing States
with an adequate lead time before any changes are effective.
• Designing the legislation to meet policy goals with minimal change to existing
programmatic features and without implementing additional new programs.
• Providing a significant new infusion of UI Administrative funding in the next
stimulus package.
QUESTIONS SUBMITTED BY HON. PATRICK J. TOOMEY
Question. In Pennsylvania, the State unemployment agency has discussed the dif-
ficulties of administering the PUA system in particular. In addition to the initial
lack of guidance, this program is particularly ripe for fraud, given that claimants
can self-certify their own eligibility and that they don’t have to provide up-front evi-
dence of prior income.
Are the problems with administering PUA in particular due to primarily the in-
herent structure of the program (for example, the fact that it is self-certifying), or
could they be largely resolved by a modernized IT system?
Answer. There is an inherent conflict in the necessity to pay PUA benefits quickly
and the ability of States to validate information provided by claimants. With the
regular State UI program, States have access to employee wage records submitted
by employers to validate earnings. States have also developed processes and other
informational channels, such as separation notices to employers and the Directory
of New Hires, to validate a claim. Wage records and many of the other resources
used to validate regular UI claimants do not exist for self-employed PUA claimants.
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This is true whether a State has a modernized system or not.
Question. I understand that NASWA has set up an Integrity Data Hub, to ‘‘allow
participating UI agencies to crossmatch UI claims against a database of information
associated with potentially fraudulent claims or overpayments.’’
Do you believe that States cross-checking benefit claims with this database could
effectively reduce improper payment rates?
What other steps can States take to prevent large-scale fraud, to ensure that
funds go to where they are most needed?
Answer. NASWA’s Integrity Data Hub is a proven solution in helping States iden-
tify and prevent fraudulent benefit payments. Even with the information from the
Integrity Data Hub, States must have the necessary trained staff to act on the
crossmatches and other information they receive from the system. If all States were
fully participating in the Integrity Data Hub and acting on the information pro-
vided, we believe it would provide significant reductions in UI fraud.
The large-scale fraud occurring in the UI and PUA program is mainly due to iden-
tity theft. Some steps States can take are:
• Discontinue direct deposit and require claimants to receive a State issued
debit card. This is not a popular option but a significant portion of UI fraud
is occurring through direct deposit.
• Invest in identity verification tools—The Integrity Data Hub will begin pro-
viding identity verification for all participating States in July through a
NASWA partnership with Experian. There is no cost to States to participate.
• There are many Federal agencies (IRS, SSA, HHS, FEMA) that all have data
on prior fraudulent activity in their programs, yet few if any of those agencies
share that information. For example, the IRS maintains data on bank ac-
counts that have been used to receive known fraudulent tax returns. Making
these bank account numbers available to other agencies for real time
crossmatching would thwart the efforts of fraudsters identified by the IRS
from exploiting other Federal programs as well. This could be done without
sharing the heavily protected PII of tax payers. Federal legislation that re-
quires these agencies to share specific and relevant data, similar to how the
Integrity Data Hub functions for State UI agencies, is a much needed step
in fraud prevention.
QUESTIONS SUBMITTED BY HON. TODD YOUNG
UI SYSTEMS
Question. Secretary Scalia spoke at length in his testimony about how ‘‘one of the
greatest challenges in the UI system is the information technology infrastructure
used by States to administer their programs’’—which was primarily why the $600
‘‘plus up’’ in the CARES Act was set at a flat rate. But, these system challenges
aren’t new—these same system issues occurred back during the Great Recession.
Ms. Townsend, you also describe the complexities with Iowa’s legacy system in your
testimony.
What system changes do you think would help States be better prepared for the
long term in case we ever face a situation similar to COVID–19 again?
Answer. The information technology infrastructure challenges States have faced
during COVID–19, and during the Great Recession, are the result of a decades-long
underinvestment in the UI program. Since the early 2000s, States have been re-
quired to report annually to DOL an estimate, using a DOL-developed model, of the
funding levels necessary to run an effective program. Due to Federal budget and ap-
propriation limits, those funding levels have never been achieved, forcing States to
constantly understaff and under-resource their operations. This chronic under-
funding has cumulatively affected States’ ability to make capital investments, in-
cluding information technology.
With adequate investment, State UI information technology systems could be
modernized, componentized, shared, cloud-hosted, and scaled for future events.
These systems would have two critical features often lacking today: flexible func-
tionality to allow States to implement quickly new programs that Congress inevi-
tably enacts with no advance implementation timeline in response to economic
events; and scalability to allow for rapid increases in workload.
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WORK SEARCH REQUIREMENT
Question. Most States, including Indiana, waived job search requirements in order
to encourage people to stay home and prevent further spread of the virus. But, now
as States start to re-open, employers are recalling their workers or hiring additional
staff to get their businesses up and running—and are having difficulty doing so be-
cause of the additional UI plus-up.
At what point will be it reasonable for workers to be expected to search for work
as a condition of receiving unemployment?
How will that happen?
Answer. States are having discussions now about when and how to reintroduce
work search requirements. The reinstatement of work search requirements will vary
State by State; most States waived work search requirements by executive order.
$600/UI SYSTEMS—FUTURE LEGISLATION
Question. Some recent proposals in the Senate have included triggers and other
mechanisms to continue the $600 plus-up post-July. Based off what was described
in many of your testimonies about the complexities surrounding the rigidity and age
of State UI systems.
Is it even possible for States to implement these types of proposals?
If so, how long would claimants have to wait until those States get those systems
up and running?
Answer. States will face challenges in implementing a modified Federal Pandemic
Unemployment Compensation (FPUC) program that differs significantly from the
existing FPUC program created by the CARES Act. The length of time to implement
will depend on the factors involved with the new method.
Proposals that aim at tailoring the ‘‘plus-up’’ to individuals’ earnings will prove
challenging. There are two main factors—availability of data, and individualized cal-
culations. State UI programs base eligibility calculations on quarterly wage records
that are reported by employers well after the quarter has ended—thus there is a
lag in data. The data is an aggregate wage total for the quarter—not hourly and
not weekly. Requiring States to gather new data from workers or employers will
substantially slow implementation as compared to a system based on information
already within the agency. Any program changes involving individualized calcula-
tions will also require programming and testing.
The current FPUC program is also payable to recipients of Pandemic Unemploy-
ment Assistance (PUA). The rubric and data available for PUA implementation vary
significantly from regular UI, with many claimants eligible for minimum benefits
without proof of earnings. New processes would need to be adopted and capacity cre-
ated to receive and analyze earnings data for self-employed or gig workers.
If Congress chooses to implement further programmatic changes, we suggest also
including the following measures to smooth its implementation:
• Enact legislation with a prospective implementation date, providing States
with an adequate lead time before any changes are effective.
• Design the legislation to meet policy goals with minimal change to existing
programmatic features and without implementing additional new programs.
• Provide a significant new infusion of UI Administrative funding in the next
stimulus package.
QUESTIONS SUBMITTED BY HON. RON WYDEN
STATE IT INFRASTRUCTURE
Question. We know that in the years leading up to this crisis, many States under-
invested in their UI systems. It is my understanding that most States need more
than just IT patches. They need complete overhauls of their systems. Is that some-
thing they will be able to accomplish while they are flooded with an unprecedented
number of claims?
Looking to the future, what do States need from the Department of Labor and
from Congress to modernize their systems to more efficiently administer benefits?
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Is it worth considering whether it would be more efficient to have the Department
of Labor develop a modern benefits administration system that all of the States
could interface with to administer benefits? If so, what features should such a sys-
tem have?
Answer. While many States have invested State revenue and other funds in their
UI operations, State UI systems are predominantly federally funded. The informa-
tion technology infrastructure challenges States have faced during COVID–19, and
during the Great Recession, are the result of a decades-long underinvestment in the
UI program. Since the early 2000s, States have been required to report annually
to the USDOL an estimate, using a USDOL-developed model, of the funding levels
necessary to run an effective program. Due to Federal budget and appropriation lim-
its, those funding levels have never been achieved, forcing States to constantly
understaff and under-resource their operations. This chronic underfunding has cu-
mulatively affected States’ ability to make capital investments, including informa-
tion technology.
With adequate investment, State UI information technology systems could be
modernized, componentized, shared, cloud-hosted, and scaled for future events.
These systems would have two critical features often lacking today: flexible func-
tionality to allow States to implement quickly new programs that Congress inevi-
tably enacts with no advance implementation timeline in response to economic
events; and scalability to allow for rapid increases in workload.
Many States have modernized their UI information technology, but many more
States still face that effort. UI system modernization is challenging even when there
is not the largest workload in the history of the program. States need an investment
concomitant with the cumulative, decades-long underfunding.
Building a federalized benefits administration system for the UI program would
be a very significant challenge for the USDOL to undertake, given the fundamental
nature of the State-Federal partnership inherent in the UI program. Simply put, the
variation in State laws is so vast that trying to build a single system to handle 53
different sets of rules would preclude any timely implementation of such a system.
EXTENDING FEDERAL PANDEMIC UNEMPLOYMENT COMPENSATION
Question. There has been a lot of debate about what is going to happen to the
$600 Federal Pandemic Unemployment Compensation after it expires on July 31st.
I’m concerned that if Congress waits until the eleventh hour to decide what’s going
to happen on August 1st, it will put States in a really difficult situation, as they’ll
have to make changes to their systems overnight.
How important is it for States to have certainty about what is going to happen
after the end of July? Are there going to be additional delays in processing claims
and getting benefits out if Congress waits until the last minute to decide what to
do?
Answer. If Congress acts to extend the FPUC program after July 31st, and that
action makes changes to the program—even if those changes seem insignificant—
there will be a delay affecting millions of claimants. We suggest, regardless of what
policy changes Congress chooses to make, if FPUC or FPUC-like payments are to
be made after July 31st, Congress should make the new or changed program effec-
tive at some future date, to allow States time to implement the changes, with FPUC
as originally set forth in the CARES Act extended from August 1st to that new ef-
fective date.
WORKERS WITH WAGE AND SELF-EMPLOYMENT INCOME
Question. Workers who are eligible for regular unemployment compensation can-
not claim PUA. This has led to some workers who lost both wage income and self-
employment income only being able to claim regular unemployment compensation
even when their PUA benefit would be bigger. Would it be administratively feasible
to allow claimants to claim the greater of their UI and PUA benefits, or to have
PUA make up the difference between the regular UI benefit amount and the PUA
benefit amount? Why or why not?
Answer. States would face a significant administrative challenge to allow workers
to choose between PUA and UI, or to augment UI with PUA. Setting aside the fact
that calculating both benefit amounts for each claimant would be an enormous ef-
fort, the necessity to contact each individual, provide the choice, register the work-
er’s choice, and effect that choice would cause gridlock in State UI customer service
channels—whether online or by telephone.
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QUESTIONS SUBMITTED BY HON. MICHAEL F. BENNET
Question. This crisis has shown how painfully out-of-date our unemployment in-
surance system is. We have States tweeting out desperate calls for people who can
program in a coding language that is practically dead. According to a recent Bloom-
berg article, about one-third of people who are eligible have not yet received their
benefits.1
Please provide separate answers to each of the following questions.
How much administrative funding would Congress need to appropriate to build
a 21st-century, state-of-the-art unemployment insurance system?
Answer. During the hearing I shared that NASWA is advocating for an additional
infusion of administrative funding in the amount of $500 million to $1 billion annu-
ally. We have also supported a structural shift in the structure of the administrative
funding system for UI. Because of budget and appropriation limits, outside of State
control, estimated funding needs have never been achieved forcing States to con-
stantly under resource their operations. This year-to-year underfunding has a cumu-
lative effect, which has seriously reduced States’ ability to make capital invest-
ments, specifically in IT resources.
We would need additional information on building a state-of-the-art UI system to
calculate the estimated cost on either a State-by-State basis or a national system
and rules for adoption.
Question. Are you aware of any States that by the end of July 2020 will be pre-
pared to—instead of administering a flat additional benefit like the $600—replace
100 percent of wages for all workers who continue to be unemployed or remain on
furlough, given the ongoing health risks, lack of child care, and lack of available
jobs? How many States would be able to administer such a wage replacement re-
gime?
Answer. Our Association does not have information on the ability of each indi-
vidual State to adjust their systems in this way. We do know, however, that the
majority of our members have expressed that such a change would be extremely
challenging.
Question. How much money and time would it take for every State to have a sys-
tem that could handle adjusting wage replacement rates, rather than adding a fixed
payment like the $600 top-up?
Answer. We do not have information on the cost of such a change or the time for
each State to make these adjustments. It would be significant.
Question. In other words, if we extended a flat benefit beyond July to allow for
additional time for States to upgrade their systems, how long should we extend that
flat benefit to ensure that States have enough time to transition to a wage replace-
ment regime?
Answer. We do not have data in response to this request. If the calculation of
wage replacement involved data already available to the State workforce agency,
then that would be preferred over a calculation that would require information not
on hand. The current FPUC program is also payable to recipients of Pandemic Un-
employment Assistance (PUA). The rubric and data available for PUA implementa-
tion vary significantly from UI and would provide an additional challenge to States.
PREPARED STATEMENT OF HON. EUGENE SCALIA,
SECRETARY, DEPARTMENT OF LABOR
Chairman Grassley, Ranking Member Wyden, and members of the committee,
thank you for the invitation to testify today.
Although last week’s jobs report for May was extremely encouraging, we know
that the coronavirus has had an immense impact on American workers. Fortunately,
President Trump and this Congress responded swiftly, first with the Families First
Coronavirus Response Act (FFCRA) and then—less than two weeks later—with the
Coronavirus Aid, Relief, and Economic Security (CARES) Act. The CARES Act cre-
ated both a temporary $600 weekly unemployment insurance benefit on top of the
1 https://www.bloomberg.com/news/articles/2020-06-02/one-third-of-america-s-record-unem-
ployment-payout-hasn-t-arrived.
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benefit provided by the States, and a new unemployment benefit available to inde-
pendent contractors and the self-employed. FFCRA created a $1 billion fund to as-
sist States with emergency UI program administration.
These two enhancements—the CARES Act benefit, and FFCRA’s assistance to the
States—have made an immeasurable difference in the lives of countless Americans
put out of work by the public health measures necessitated by the virus. Moreover,
these enhancements were accompanied by other path-breaking programs passed by
Congress and signed into law by President Trump: the first Federal paid sick leave
benefit for the private sector, the Paycheck Protection Program to help small busi-
nesses contend with shutdowns and keep employees on payroll, and direct $1,200
Economic Impact Payments for individuals and families. These efforts have helped
to sustain American workers and position the country for a vibrant economic recov-
ery.
I am proud of the efforts of the staff at the U.S. Department of Labor to imple-
ment the UI provisions of FFCRA and the CARES Act, and welcome the opportunity
to speak to the committee about the steps we have taken and the path ahead.
OVERVIEW OF THE UNEMPLOYMENT INSURANCE SYSTEM
The Nation’s unemployment system is a Federal-State partnership designed to
provide benefits to wage-earning workers who face unemployment through no fault
of their own. The system provides direct benefits to cover workers’ basic financial
needs, and requires that the recipients be able and available for work, and seeking
work, during the period of unemployment. Ordinarily the benefits are funded almost
entirely by State taxes on employers, and are tied to workers’ previous wages and
attachment to the labor force.
Each party to this Federal-State partnership has distinct and complementary re-
sponsibilities. States are responsible for ensuring that their unemployment com-
pensation laws conform to the requirements of Federal law; State laws vary widely
within those Federal parameters. It is the States that administer the program, on
a State-by-State basis, and States are responsible for maintaining the solvency of
their UI trust funds. The Federal Government is responsible for verifying that State
laws and operations conform to Federal law, for calculating and providing funding
for State program administration, and for maintaining the Federal UI trust fund.
One of the greatest challenges in the UI system is the information technology in-
frastructure used by States to administer their programs. Fifty-one different sys-
tems are used by the States; the average age of these systems is 28 years. Many
States’ systems are more than 40 years old. These cumbersome, outdated systems
inhibit the collaboration and data-sharing associated with sophisticated program
management. Although some States have made the investment needed to maintain
their systems, few have been able to implement much-needed overhauls, and even
fewer have installed new and more nimble systems.
As members of this committee are aware, the rigidity of these systems was a prin-
cipal reason that in the CARES Act, the $600 ‘‘plus-up’’ was set at a flat rate, with-
out regard to a worker’s prior income. The computer systems’ age and rigidity are
also a principal reason many States were delayed in beginning to deliver all the
CARES Act benefits.
THE LABOR DEPARTMENT’S ASSISTANCE WITH UNEMPLOYMENT
INSURANCE DURING THE PANDEMIC
In late February of this year—less than 4 months ago—few of us were focused
on the unemployment insurance system. The unemployment rate was tied with a
50-year low, and more than 450,000 jobs had been created in the first 2 months of
the year. More than 7 million jobs had been created since President Trump took of-
fice. But in February, the Labor Department’s Employment Training Administration
(ETA) was already in discussions with the States of Washington and Maine on
measures those States could take to address challenges presented by COVID–19. In
the ensuing weeks, ETA (and other components within the Department) were in-
tensely engaged on a range of tasks to help American workers obtain unemployment
benefits:
• On March 12th, the Department issued Unemployment Insurance Program
Letter (UIPL) No. 10–20, outlining flexibilities the States had to respond to
COVID–19 impacts. This document—which was issued before the paid leave
provisions in FFCRA were enacted—outlined ways that UI benefits could le-
gitimately be paid to workers kept out of work by their illness or the illness
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of a family member. For example, the Department clarified how States could
interpret the ‘‘able to work’’ requirement in a manner that allowed workers
affected by COVID–19 to remain eligible for benefits. Five days after issuing
this innovative guidance document, the Department held an explanatory
webinar for State agencies—800 State workforce leaders participated.
• On March 22nd, UIPL No. 13–20 provided guidance on the additional flexi-
bilities granted in FFCRA. Among other things, States were provided the op-
tion to ‘‘non-charge’’ employers for unemployment related to COVID–19, since
the pandemic had not been caused by individual employers. To date, all 53
States and Territories have taken advantage of at least one of the flexibilities
in this document.
FFCRA implementation. With the passage of FFCRA on March 18th, the Depart-
ment received new resources to support States’ unemployment response. The same
day the law was enacted, the Department relaxed some reporting requirements.
Four days later, the Department published a UIPL guidance document telling
States how to access FFCRA’s emergency administrative funding. As soon as States
certified that they had met the conditions established by Congress in FFCRA, the
Department quickly provided the States’ respective allotments from the $1 billion
in UI administrative funding provided by the Act.
Satisfying the statutory conditions in FFCRA was not always an easy process for
States—for some, it required special legislation—but by April 23rd, all States had
received their first emergency grant allotment, and by May 15th, all States had re-
ceived both allotments. These FFCRA funds have been instrumental in enabling
States to add staff quickly and to address technology problems exacerbated by the
immense surge in COVID–19-related claims.
CARES Act implementation. President Trump signed the CARES Act on Friday,
March 27th. By the next day, the Department had obtained signed agreements to
participate in the Act’s programs from all States and Territories with UI programs.
Because the effective date of certain CARES benefits hinges on the date of the
State’s agreement, this quick coordination with the States helped ensure maximum
coverage for eligible workers.
In the weeks following, ETA continued to work as swiftly as possible to position
States to make UI payments to the millions of workers displaced by COVID–19:
• On April 4th, the Department issued the first guidance document on imple-
mentation of the $600 ‘‘plus-up’’ payment.
• The first States began issuing the $600 benefit payments on April 5th and
6th.
• By April 7th, the Department and the U.S. Treasury had established all the
proper funding channels for States to draw down funds to provide CARES
benefits.
• As of April 28th, all States were paying the CARES Act $600 increase in un-
employment benefits. And as of June 5th, all but one State is paying benefits
under the Pandemic Unemployment Assistance (PUA) programs for inde-
pendent contractors and the self-employed. The program for those who have
exhausted other benefits—Pandemic Emergency Unemployment Compensa-
tion (PEUC)—has been implemented by 38 States.
Labor Department staff have worked tirelessly since mid-March to assist States
in understanding the CARES Act programs and in making benefit payments to eligi-
ble recipients. In nine weeks between mid-March and mid-May, the Department
issued 19 separate UIPL guidance documents directly related to COVID–19. By
comparison, in 2019 the Department issued a grand total of 19 UIPLs the entire
year—and of course, the 2020 UIPLs to date concerned novel and often complex
issues.
The Office of Unemployment Insurance has hosted fourteen webinars to provide
direct implementation support to State unemployment insurance directors. Often,
hundreds of State officials participated. On these calls, Department staff provided
guidance on needed adjustments to State laws, best practices for implementing
COVID flexibilities, and measures to protect program integrity. We will continue to
host webinars as new guidance is published.
In addition to the webinars, Assistant Secretary for Employment and Training
John Pallasch has convened State workforce agency leadership and UI directors
multiple times to discuss program integrity, innovations in identifying and stopping
fraud, and to respond to questions raised by State officials. I have joined the Assist-
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ant Secretary’s calls with State UI directors twice, in addition to arranging calls
with more than 20 Governors since mid-March to discuss challenges and questions
they were confronting, and to let them know of the resources the Department was
providing. Last week I sent a letter to all Governors reminding them of our shared,
Federal-State responsibility for program integrity. And last month, the Department
Inspector General and I sent a joint message to all Labor Department personnel un-
derscoring the importance of ethical and responsible conduct, particularly in connec-
tion with the large new CARES programs.
Altogether, Labor Department staff and I have addressed State, territory, local
and tribal workforce leaders, the National Governors Association, the National Asso-
ciation of Counties, chambers of commerce, employers, trade associations, mayors,
city and municipal employees, State legislators, and county commissioners among
others. Department staff have also spent countless hours collaborating and problem-
solving with the Department’s Office of the Inspector General, U.S. Treasury, Small
Business Administration, the Office of Management and Budget, and other Federal
agencies. And of course, my staff and I have spoken periodically with members of
this committee and your staff regarding CARES and FFCRA implementation.
Payments by the States. We have also done what we can to assist States with their
dated computer technology, enlisting the Department’s Chief Information Officer
and the U.S. Digital Service to provide IT support to individual States. (The USDS
is a team of technologists in the Executive Office of the President that provides tar-
geted support across the Federal Government.) To date, more than ten States have
followed up with the Department and USDS on this offer of assistance. Projects
have included updating public-facing website design, resolving technical database
configuration problems, and identifying ways to use automation to handle massive
claims volume.
The Department also swiftly addressed an IT challenge that arose on the Federal
side, when the gigantic surge in claims caused difficulties with the Interstate Con-
nection (ICON) network, a national data system used by States to process claims.
The Department funded and executed the necessary system upgrades over the week-
end of April 4th and 5th, just days after the system difficulties were identified.
Since the upgrades, ICON has handled the increased traffic with no system per-
formance problems.
For all the efforts of staff at the Department and in State UI offices across the
country, we are acutely aware that the States’ difficulty in timely processing claims
and providing CARES Act benefits has caused frustration and hardship for count-
less Americans unexpectedly forced to rely on the UI system. No system could have
been fully prepared for unemployment filings that for 2 weeks in a row, were nearly
10 times higher than the previous all-time high. State unemployment offices were
lightly staffed, as befitted a period that had been characterized by record low unem-
ployment, yet suddenly had to respond to simultaneous challenges: unprecedented
volume and implementation of entirely new programs. The information available to
the Department does indicate that by the end of May, States had turned the corner
in addressing their backlog of claims. We will continue to do everything within our
capacity to assist this. The experience of the last few weeks has also confirmed be-
yond doubt the need to modernize the information technology systems States use
to pay unemployment benefits.
ENSURING PROGRAM INTEGRITY
Guarding against fraud is essential to the unemployment insurance system. UI
fraud takes many forms. Employers sometimes establish fictitious accounts to en-
able fraudulent claims against the accounts, or take actions to avoid tax liability.
Claimants sometimes falsely certify their availability or ability to work under State
law, refuse offers of suitable employment while continuing to certify eligibility, or
collect full benefits without accurately reporting wages or other income. And we are
seeing networks (including domestic and foreign transnational organizations) engage
in systematic fraud using false and stolen information and unwitting and witting
third parties.
Fraud in the UI system has been of concern to the Department and to Congress
for many years. Both the Improper Payments Elimination and Recovery Act
(IPERA) of 2010 and its successor, the Payment Integrity Information Act of 2019,
require that covered agencies and programs maintain an annual improper payment
rate of 10 percent or less. Lowering the improper payment rate has required ongo-
ing commitment and partnership between the Department and the States, with par-
ticular attention to eleven States that have had especially high rates of improper
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payments. For the first time in 9 years, the national improper payment rate was
under 10 percent for the four quarters ending December 31, 2019.
The circumstances since March of this year, however, have presented a substan-
tially heightened risk of fraud and improper payments. The Labor Department,
States, employers, and claimants will all have important roles in ensuring that bil-
lions of American taxpayer dollars are not now lost through fraud, waste, or mis-
management.
State implementation. As the CARES Act has been implemented, the Department
has become aware of practices in some States that are virtually certain to result
in substantial improper payments. One State had omitted any requirement that
PUA recipients attest how they meet the COVID–19 eligibility requirements, and
had set a flat rate for PUA weekly payments without regard to previous earnings.
Several States asked to waive, and one did briefly waive, the requirement that
claimants provide weekly or bi-weekly certification of their eligibility for unemploy-
ment; this makes it highly likely that as some claimants returned to work, they
would continue receiving State UI benefits and the $600 Federal ‘‘plus-up’’ without
reporting their reemployment and weekly earnings.
As these changes, proposed or implemented, became known to the Department,
we promptly contacted the States and engaged them in vigorous discussions to en-
sure adherence to the laws’ requirements. Where appropriate, we have required cor-
rective action plans, including retroactive correction, and have provided ongoing
technical assistance to State UI staff. The OIG’s advisory report—‘‘CARES Act: Ini-
tial Areas of Concern Regarding Implementation of Unemployment Insurance Provi-
sions’’—has also been useful in highlighting to the States some of these pro-
grammatic concerns.
Third party fraud. A number of States are facing challenges from sophisticated
domestic and international fraud rings that attack States’ online systems to illegally
claim benefits using stolen or synthetic identities and using technology, including
‘‘bots,’’ to rapidly file hundreds of claims. The Department is working with the
States, the Department’s Inspector General’s Office, and the States through the UI
Integrity Center of Excellence to repel these attacks. We have provided the OIG ac-
cess to critical State UI data, including fraud alerts from States through the Integ-
rity Center’s Integrity Data Hub, and are working to identify and share best prac-
tices with the States. New functionality has been added to ICON to enable States
to do the same cross-matching for the CARES Act UI programs that is done for reg-
ular UI programs. The Department has also launched a UI fraud page on its
website to encourage the public to report fraud.
Work search requirements. Some observers, and some members of this committee,
have expressed concern that the generous $600 CARES Act benefit may deter recipi-
ents’ return to work as businesses reopen. Recent analyses, including by the Univer-
sity of Chicago and by this administration, found that more than two-thirds of work-
ers will receive unemployment benefits greater than their prior weekly wages, and
that approximately 20 percent of unemployed workers will receive benefits double
their pre-layoff wages. This is consistent with data in the Congressional Budget Of-
fice report sent to Chairman Grassley last week.
Federal and State unemployment laws contain numerous requirements, including
some described above, squarely calculated to ensure that claimants choose work
over unemployment benefits. It is a cornerstone of the system that workers who
refuse offers of suitable employment without good cause are ineligible to receive un-
employment compensation—and an offer to return to a job that a worker left weeks
ago would typically be an offer of suitable employment. Throughout its administra-
tion of the CARES Act programs, the Department has underscored these require-
ments in its discussions and communications with the States, including in a letter
I sent the Governors last week.
Of course, the very reason for these firm legal requirements is that, while most
workers prefer work, there will always be some who will not energetically seek em-
ployment when unemployment benefits are available. The greater the unemploy-
ment benefit, the greater the incentive for that handful of workers to remain out
of the workforce. For these reasons, and as our economy re-opens, it will be critical
for States to use all tools at their disposal to help workers make the transition from
unemployment back into the workplace. This includes making clear to employers
how to submit documentation if they believe a UI claimant has refused an offer of
suitable work, and how to verify each week that PUA recipients continue to be un-
employed due to at least one statutory COVID–19 criterion.
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The CARES Act unemployment benefit was an extraordinary benefit for the ex-
traordinary situation that American workers began to confront in March. Through
shut-down and stay-at-home orders, governments across the country were tempo-
rarily closing businesses and barring millions of workers from gainful employment.
The $600 CARES plus-up was intended to make these workers whole, as near as
was possible given the very substantial limitations of the State UI systems de-
scribed above. (During the ‘‘Great Recession,’’ a Federal plus-up was provided of $25
per week.) The CARES benefits were intended to be temporary, and will expire at
the end of next month, by which point we expect the economy to be deep into the
process of reopening, with shut-down orders ended and—Friday’s jobs report con-
firms—millions of Americans freed to return to work. Unemployment benefits will
still be needed past that date, of course. But the circumstances that originally called
for the $600 plus-up will have changed; policy will need to change as well.
SUPPORTING WORKERS IN THEIR RETURN TO WORK
The subject of this hearing is unemployment insurance, but of course, unemploy-
ment insurance is never the most preferred outcome. Our first goal for workers is
work—good jobs. And the first prerequisite for that is a thriving business base.
Our economy was achieving both those goals at a spectacular pace before the
coronavirus. Unemployment was at a 50-year low, jobs were being created at a far
higher rate than projected, and wages were rising, particularly for lower-wage work-
ers. As businesses thrived and the stock market soared in 2019 and earlier this
year, the benefits to workers grew deeper and broader, with ever-lower unemploy-
ment and increased opportunities for populations that historically have difficulty in
the job market, including Americans with disabilities and those without a high
school degree.
Our recent strong economy means that now, unlike any other economic downturn
in the country’s history, we have the good fortune of not having to reconsider or jet-
tison the economic policies that preceded the downturn. The policies were working—
phenomenally. The problem was a virus, not economic policy.
Accordingly, as we consider now how to help workers, we should pursue the meas-
ures the Trump administration already was using successfully to lift Americans out
of unemployment. Chief among these are tax relief and eliminating unnecessary reg-
ulatory burdens. These were the cornerstones of an economic program that, while
disputed at the time it was adopted, led to the undeniably exceptional job market
we enjoyed until March. Similar measures to spur investment and job growth
should be part of any stimulus plan going forward. That is why, last month, the
President signed his Executive Order on Regulatory Relief to Support Economic Re-
covery.
As we speak of returning workers to work, job training and State workforce devel-
opment systems are also naturally part of the discussion. Here again, lessons
learned from our recent booming economy should guide us.
One such lesson is the effectiveness of involving business in providing worker
training. The men and women running businesses know better than educators or
the government what skills will be most needed in the workforce; the more that
businesses help guide the training we provide workers, the more likely that training
is to lead to valuable, long-term employment. That is the reason for the success of
the apprenticeship training model, which enjoys exceptional bipartisan support. Ap-
prenticeships allow employers’ anticipated needs to steer the investments made in
worker training, with the result that workers acquire skills for which there is imme-
diate demand.
For similar reasons, it makes sense to give businesses a role in determining the
shape that apprenticeship programs take. The Department’s Registered Apprentice-
ship Program has been effective at supporting apprenticeships in certain industries,
such as construction. But workers in other sectors—like advanced manufacturing
and cybersecurity—can also benefit from alternative apprenticeship models that pro-
vide high-quality work-based training. That is the purpose of the rule the Labor De-
partment adopted in March for ‘‘Industry Recognized Apprenticeship Programs,’’
which gives businesses and business groups, educators, labor unions, and others the
ability to recognize apprenticeship programs that do not necessarily conform to all
the criteria of the Department’s registered program, but which effectively equip
workers with the skills in demand at the growing edge of our economy. These pro-
grams can be an attractive option for unemployed workers reentering the workforce;
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113
they warrant congressional support alongside DOL’s Registered Apprenticeship Pro-
gram.
Another lesson of recent years that should guide investment in worker training
is the convergence of the roles played by our workforce and educational systems in
preparing Americans for productive careers. In helping unemployed Americans re-
turn to work, the different components of the public workforce system should act
in coordination and partnership—as One Workforce. The entire lifecycle of an Amer-
ican worker’s needs—from career search to unemployment insurance to training in
new skills—should be supported by an integrated service delivery system. The need
now is great for States to think about how to consolidate, integrate, and mobilize
the disparate pieces of their workforce investments into a coherent workforce con-
tinuum. Any new Federal funding should recognize the value of this approach.
CONCLUSION
One of the hallmarks of our Nation’s experience with the coronavirus has been
rapid change. Initially, that meant rapid deterioration—in a single month we went
from record-low unemployment to record-high unemployment filings. But now, as
the May jobs reports illustrates, the rapidity of that change can be change for good.
The Department of Labor remains focused on helping deliver CARES benefits to eli-
gible workers. At the same time, we will work intensely with States to help workers
make the transition from unemployment back to the workforce and toward the vi-
brant economy we enjoyed just weeks ago.
QUESTIONS SUBMITTED FOR THE RECORD TO HON. EUGENE SCALIA
QUESTIONS SUBMITTED BY HON. PAT ROBERTS
Question. Are there better ways to help people get back into the workforce other
than extending the additional $600 provision that was included in the CARES Act?
Answer. Congress passed the Coronavirus Aid, Relief, and Economic Security
(CARES) Act as the U.S. economy was shutting down. The $600 weekly payment
was an important, extraordinary measure to support workers who in many in-
stances were being prohibited from earning a living as a result of necessary public
health measures put in place by States and locales. A study by the University of
Chicago indicates that more than two-thirds of workers receiving benefits under the
CARES Act have seen their wages replaced at rates above 100 percent, with some
low-wage workers experiencing replacement rates above 200 percent (https://
bfi.uchicago.edu/working-paper/2020-62/). The Congressional Budget Office, in re-
sponse to a query by Chairman Grassley, has reported that if the $600 plus-up were
continued past July, five-sixths of the covered workers would receive higher pay-
ments through unemployment than by working, resulting in a more elevated unem-
ployment rate than would occur otherwise. Given these circumstances, Congress’s
decision to sunset the $600 plus-up at the end of the month was appropriate. Unem-
ployment benefits will continue to be important after July, but as the economy re-
opens and jobs return, it will be appropriate to take a different approach than taken
in March as the economy was closing. The Department is available to work with
Congress to fashion the approach that best support workers and economic growth.
Question. Do you believe that extending the $600 provision would incentivize peo-
ple to remain unemployed due to their UI checks being higher than a previous pay-
check?
Answer. Most Americans would prefer to have a job than to be dependent on un-
employment benefits. As the Department has repeatedly emphasized in guidance,
moreover, failure to accept suitable employment when offered, including when an
employer has called a worker to return, typically should result in the worker being
determined ineligible for future benefits. That said, studies of unemployment insur-
ance benefits indicate that some number of workers do elect to remain on unemploy-
ment, even when suitable work does become available. This disincentive to work
must be kept in mind when structuring an unemployment program, and individuals
should not receive more in unemployment benefits than they were paid while work-
ing. The Department is available to work with Congress on potential strategies.
Question. Which job sector has been the hardest hit, to date, since the start of
this pandemic?
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Answer. Total nonfarm employment declined by a net 14,661,000 employees be-
tween February and June 2020. Among the major industry sectors, the leisure and
hospitality sector has lost 4,827,000 jobs over that same period. Within this sector,
food services and drinking places lost a net 3,131,000 jobs, arts, entertainment, and
recreation lost a net of 909,000 jobs, and accommodation lost a net of 786,000 jobs.
Professional and business services lost a net of 1,830,000 jobs. Within this major
sector, administrative and waste management services lost a net of 1,299,000 jobs.
Education and health-care services lost a net of 1,814,000 jobs, with a net loss of
904,000 jobs in health care, many as a result of postponement of elective surgery
and non-COVID–19-related dental and medical appointments. Within government,
State and local governments lost a net of 1,487,000. Retail trade lost a net of
1,273,000 jobs. Manufacturing lost a net of 757,000 jobs, of which 489,000 were lost
in durable goods manufacturing. Other services lost a net of 752,000 jobs.
QUESTIONS SUBMITTED BY HON. JOHN THUNE
Question. South Dakota has taken proactive steps to inform the public about cir-
cumstances in which an individual will lose his or her unemployment benefits for
refusing an offer to return to work. Are there specific steps the Department of Labor
may take over the coming weeks and months to help States educate the public
about what circumstances make an individual ineligible UI benefits, as well as in-
forming the public about other Federal programs that are available to assist individ-
uals still facing financial hardship?
Answer. The Department has issued extensive guidance on Unemployment Insur-
ance (UI) programs under the CARES Act, as well as news releases, fact sheets, and
‘‘frequently asked questions’’ documents that can be found at https://www.dol.gov/
coronavirus/unemployment-insurance. The Department’s guidance and technical as-
sistance have also encouraged States, in turn, to employ a variety of forms of com-
munication to further public understanding eligibility requirements and the proc-
esses for filing UI claims, which to a large degree are determined by State law and
practice. The Department will continue remain in communication with States on
these issues over the coming weeks.
Question. My office has heard that self-employed individuals that have mixed
earnings (self-employed income and are on an employer’s payroll) could be disquali-
fied from the Pandemic Unemployment Assistance program. Is this interpretation
correct even if an individual primarily relies on the selfemployment income?
Answer. An individual should not automatically be denied Pandemic Unemploy-
ment Assistance (PUA) under the CARES Act simply because she has W–2 income.
If an individual has sufficient covered employment (i.e., W–2 income) to qualify for
regular unemployment compensation and meets the other eligibility requirements,
then she is eligible for regular unemployment benefits and not eligible to receive
PUA. The monetary requirements for regular unemployment compensation depend
on State law.
If the individual is ineligible for regular unemployment benefits and is unem-
ployed, partially unemployed, or unable or unavailable to work due to a listed
COVID–19-related reason under the CARES Act, then she may be eligible for PUA.
PUA eligibility includes both covered employment and noncovered employment (e.g.,
self-employment).
QUESTION SUBMITTED BY HON. RICHARD BURR
Question. Some military veterans and reservists, who are the head of their house-
holds, lost their jobs due to COVID. Some States restrict veterans from applying for
and collecting unemployment while also using the Post-9/11 GI Bill, considering the
GI Bill pays out a housing allowance and a small stipend. For families that rely
solely on the income and benefits of the veteran/reservist, losing a civilian job still
significantly impacts their financial well-being. Will DOL consider releasing guid-
ance to State unemployment offices encouraging them waive this restriction until
the national emergency is lifted?
Answer. The Department has not learned of any States disqualifying ex-service
members or reservists from receiving UI benefits because of receipt of Post-9/11 GI
Bill education benefits. In receiving follow-up information from Senator Burr’s office,
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the Department understands the question to involve reservists and National
Guardsmen who have lost their civilian employment.
The Department does not have authority to waive the statutory provisions of the
National Defense Authorization Act of 2016 (NDAA). However, it published Unem-
ployment Insurance Program Letter 1416 (https://wdr.doleta.gov/directives/
corr_doc.cfm?DOCN=9737) to discuss the provisions of the NDAA. This guidance
noted that the Department is coordinating with the Department of Veterans Affairs
(VA) regarding procedures to facilitate the necessary information exchange between
the VA and the States to address Post-9/11 GI Bill education benefits that may af-
fect Unemployment Compensation for Ex-Service Members (UCX) claimants. The
Department of Labor plans to issue future guidance regarding State responsibilities
to address Post-9/11 GI Bill education benefits for affected UCX and UI claimants.
States have been advised that until the Department publishes additional guidance
on this matter, they are to process UCX and UI benefits in accordance with normal
procedures. The Department continues to work with the Department of Defense and
the VA to develop guidance on this matter.
The Department has reached out to North Carolina to ensure the State is han-
dling such claims appropriately.
QUESTIONS SUBMITTED BY HON. PATRICK J. TOOMEY
Question. Each State unemployment system requires that, in order to be eligible
for benefits, claimants must be ‘‘able, available, and actively searching for work’’—
and are ineligible for benefits if they refuse an offer of suitable employment, includ-
ing returning to their previous job.
Can States decline to investigate or pursue reported cases of UI fraud?
Answer. No. The Department issued guidance under Unemployment Insurance
Program Letter (UIPL) 23–20 (https://wdr.doleta.gov/directives/corr_doc.cfm?DO
CN=4621), which reiterated that the same tools used to investigate and pursue
fraud under the regular unemployment compensation program also apply to the
CARES Act programs. The Department is authorized to take additional action with
States, including requiring corrective action plans or, in egregious cases, severing
CARES Act agreements in response to unaddressed program integrity problems.
Question. To what extent are States able to waive or provide their own modified
guidance regarding the requirements that claimants must be able, available, and ac-
tively searching for work?
Answer. Section 303 of the Social Security Act requires that an individual col-
lecting unemployment benefits be able, available, and actively searching for work.
Prior to enactment of the Families First Coronavirus Response Act (FFCRA) and
the CARES Act, the Department issued guidance under UIPL 10–20 (https://
wdr.doleta.gov/directives/corr_doc.cfm?DOCN=8893) regarding the significant flexi-
bilities permissible under existing Federal law for the requirement that an indi-
vidual be able and available to work in the context of the COVID–19 pandemic. Ac-
commodations are allowable for individuals who have not withdrawn from the labor
market or who are on temporary lay-off from an employer. The Department is re-
viewing the guidance in UIPL 10–20 in light of changing conditions to determine
whether States should begin more rigorously enforcing the work search require-
ments.
FFCRA provides States the ability to modify or suspend the requirement to ac-
tively seek work in response to the spread of COVID–19. In fact, a modification or
suspension of the work search requirements for individuals ‘‘directly impacted by
COVID–19 due to an illness in the workplace or direction from a public health offi-
cial to isolate or quarantine’’ is a required condition for States to receive Allotment
II of the emergency administrative grants made available under the FFCRA. Addi-
tionally, the Pandemic Emergency Unemployment Compensation (PEUC) program
under the CARES Act requires that States provide flexibility for individuals col-
lecting PEUC ‘‘in cases of individuals unable to search for work because of COVID–
19, including because of illness, quarantine, or movement restriction.’’ The FFCRA
statute does not provide a specific ending date for this flexibility but rather ties it
to COVID–19 impacts. The Department believes that these flexibilities should be
phased out as States’ economies reopen and the effects of COVID–19 recede.
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Question. To what extent do States have discretion to define ‘‘suitable employ-
ment’’? For example, if an employee is offered their exact previous job at the same
wage but at temporarily reduced hours, can a State determine that the job no longer
constitutes ‘‘suitable employment’’?
Answer. The Federal Unemployment Tax Act establishes baseline criteria for a
State to use in determining the suitability of work, including that work is unsuit-
able ‘‘if the wages, hours, or other conditions of the work offered are substantially
less favorable to the individual than those prevailing for similar work in the local-
ity.’’ Against this backdrop, States have significant flexibility in determining the
suitability of employment. In the question posed, it is not clear by how much hours
are reduced, and precisely how long the ‘‘temporary’’ reduction lasts. If the reduction
and duration are both minor, then it would not appear the ‘‘substantially less favor-
able’’ requirement is met.
QUESTIONS SUBMITTED BY HON. STEVE DAINES
Question. Here in the Senate, I called early on for unemployment to be as close
as possible to full wage replacement. Thousands of Montanans lives were upended
through no fault of their own and ensuring they were able to make ends meet until
the risk had passed was critical for our economy. As with any emergency program
of such magnitude, there is potential for waste, fraud, and abuse.
To that end, how is the Department working with States to ensure the integrity
of our unemployment system?
Answer. The Department is vigorously working with States, the Department’s Of-
fice of Inspector General (OIG), and law enforcement to combat the increase in
fraud resulting, in part, from the added benefits provided under the CARES Act and
the significant increase in volume of claims. As professional criminals have started
to target State UI systems, the Department has required States to implement for
CARES Act programs the same mandatory program integrity tools used for the reg-
ular UI program. In addition, the Department published UI Program Letter 23–20
(https://wdr.doleta.gov/directives/corr_doc.cfm?DOCN=4621) with more specific
guidance on requirements for ensuring that payments can only be made to eligible
individuals.
The Department also has taken the following actions to help combat fraud related
to the CARES Act programs:
• I sent a letter in early June to all governors stressing the importance of pro-
gram integrity requirements; the letter also identified some best practices to
prevent fraud.
• The Department’s Employment and Training Administration (ETA), which
oversees UI programs, has been working closely with the OIG’s Office of In-
vestigations, Labor Racketeering and Fraud to ensure States’ cooperation
with program integrity efforts, as well as to communicate fraud schemes in
real time, work to secure State data, and provide to States effective fraud pre-
vention and detection strategies.
• The Department has refocused the resources of the UI Integrity Center to
provide tools and resources for States to combat fraud in the context of
COVID–19 and the CARES Act.
• ETA and OIG staff have weekly calls, hosted by the Integrity Center, with
State officials to share and communicate fraud prevention strategies.
• The Center’s Integrity Data Hub is a multi-State data analysis tool that al-
lows participating UI agencies to cross-match UI claims against a database
associated with potentially fraudulent claims or overpayments. The Hub cur-
rently includes:
» A suspicious actor repository to enable States to submit known fraud
data elements that will enable them to cross-match those elements to de-
tect multi-State fraud;
» Suspicious Internet Protocol (IP) addresses;
» Multi-State claims data;
» A fraud alert system; and
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» Beginning in July 2020, an identity verification tool for use at the front
end of a claim for all States.
Question. While changes to unemployment insurance were a critical piece of the
CARES Act, other programs such as the Paycheck Protection Program were instru-
mental in ensuring that our small businesses survive, so that once we get through
the pandemic, workers have a job to return to.
We all want to get people back to work but I hear from small businesses that re-
hiring can be a challenge after they get the PPP loan. What are the barriers that
you most frequently hear about and what policy changes would you suggest if Con-
gress writes additional legislation?
Answer. The Department has heard reports that the amount provided by the Fed-
eral Pandemic Unemployment Compensation benefit has deterred some recipients
from returning to work. States should continue to encourage employers to report in-
dividuals who refuse to return to suitable work in order to receive unemployment
benefits.
As the economy reopens and many more jobs become available, it will be even
more important to have policies that promote work. The Department is available to
work with Congress on potential strategies.
Question. The suddenness of this crisis led to many States unemployment infra-
structure to be overwhelmed, including Montana’s, and we provided $1 billion dol-
lars in administrative funding in the Families First Coronavirus Response Act. Nev-
ertheless, those in need of unemployment insurance were met by jammed phone
lines and crashing websites.
Do you believe more needs to be done in regards to making sure unemployment
agencies are adequately staffed and technologically up to date, and would you rec-
ommend additional funding or legislative changes?
Answer. The administrative funding model for the regular UI program creates a
particular challenge for States because the additional funding needed to cover in-
creases in workload is disbursed after the increase in work: States receive additional
funding on a quarterly basis if their workload exceeds what was projected for base-
level funding. Due to the record-low unemployment prior to the COVID–19 pan-
demic, State staffing and funding levels were also quite low, which slowed the mod-
ernization of information technology systems and other infrastructure, such as call
center operations.
The Department agrees that current funding for the UI program should be recon-
sidered. We are ready to work with Congress on aspects of potential reforms.
Question. I would like to also discuss the process of getting the CARES Act provi-
sions up and running in States. While Congress acted swiftly to pass this sweeping
legislation, there were noticeable delays in States getting these critical enhanced
benefits to recipients.
Can you speak about what may have caused some of these delays and what les-
sons have been learned so that should we have another crisis, those in need aren’t
waiting several weeks to get the benefits they need?
Answer. The Department is aware of the hardship faced by many Americans be-
cause of delayed payments. Unfortunately, States varied significantly in their capac-
ity to ramp up the new programs made available under the CARES Act, with delays
in some States arising from several different factors, including the complication aris-
ing from implementing new programs, antiquated information technology systems,
and historic volumes of initial claims. The Department is ready to work with Con-
gress on potential solutions.
Question. While expanding unemployment was necessary, I have concerns that
about long-term unemployment leading to skill-erosion and make it more difficult
for some workers to reenter the workforce.
Is this something the Labor Department is following, and how can we work with
you to ensure workers are in the best possible position to reenter the workforce?
Answer. As cities and States re-open, the Department’s top priority is to get
Americans safely back to work. In June 2020, the unemployment rate declined by
2.2 percentage points, to 11.1 percent, and the number of unemployed persons fell
by 3.2 million, to 17.8 million. However, the Department recognizes that the pros-
pect of long-term unemployment remains a significant concern for many Americans.
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In May 2020, there were 1.4 million individuals who reported long-term unemployed
(LTU)—those jobless for 27 weeks or more.
Key tools used by the Department to serve the chronically unemployed include the
Wagner-Peyser Employment Service and the formula grants made available under
the Workforce Innovation and Opportunity Act (WIOA). At this point in Fiscal Year
2020, the Department has provided approximately $4.3 billion to States through the
WIOA and Wagner-Peyser Employment Service. LTU individuals are eligible to re-
ceive reemployment services through the Wagner-Peyser Employment Service and
to receive reemployment and training services through the WIOA Adult formula
program. Job search services are provided through online job banks and other vir-
tual tools and through a network of approximately 2,370 American Job Centers,
which offer in-person services for all components of the workforce cycle: recruiting,
training, retraining, and transitioning workers.
As the economy continues to reopen, the Department is ready to work with Con-
gress, in consultation with the States, on the best strategies to enable and incenti-
vize Americans to return to the workforce with the skills necessary to succeed.
QUESTION SUBMITTED BY HON. TODD YOUNG
UI SYSTEMS
Question. You spoke at length in your testimony about how ‘‘one of the greatest
challenges in the UI system is the information technology infrastructure used by
States to administer their programs’’—which was primarily why the $600 ‘‘plus-up’’
in the CARES Act was set at a flat rate. But, these system challenges aren’t new—
these same system issues occurred back during the Great Recession.
What system changes do you think would help States be better prepared for the
long term in case we ever face a situation similar to COVID–19 again?
Answer. The Department recognizes the need to fund and modernize State UI in-
formation technology (IT) systems.
The COVID–19 pandemic has highlighted the unreliablity of State UI IT sys-
tems—something the Department worked to educate Congress about during the
drafting of the CARES Act. The UI program is structured as a Federal-State part-
nership based on Federal law but administered by States under State law. This
structure makes the program unique among the country’s benefit programs in that
States have significant flexibility to establish eligibility provisions, benefit duration
and levels, and taxing structures to pay for benefits.
While State flexibility is important, this structure and the variance in State laws
and processes make it more difficult to develop efficient administrative processes
and to implement technologies that will work across the 53 different States and ter-
ritories operating UI programs.
The Department believes there is opportunity for modernization across States and
would welcome the opportunity to work with Congress and States to that end.
QUESTIONS SUBMITTED BY HON. RON WYDEN
WORKER SAFETY
Question. At the hearing, we discussed how to protect workers who turn down a
job offer because of risks to their health or safety from losing their Unemployment
Insurance or Pandemic Unemployment Assistance benefit. I also sent you a letter
on this issue, along with 21 of my colleagues, on May 19th, and I have yet to receive
a response. Based on our conversation at the hearing and your failure to respond
to the letter, I remain concerned that the Department of Labor is not taking its re-
sponsibility to protect workers seriously, and that people across the country will con-
tinue to be forced to choose between their health and their income.
Please provide a response to our letter in writing, including responses to the ques-
tions in the letter, a summary of any related guidance the Department has issued,
and the Department’s plan for issuing additional guidance on this topic that puts
worker health and safety first.
Answer. The Department responded to your letter on July 24, 2020.
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As the economy reopens, one of the Department’s top priorities is ensuring that
workers are returning to safe workplaces. Under the PUA program, an individual
is eligible for benefits if he is otherwise able to work and available for work within
the meaning of applicable State law, unless he is unemployed, partially unemployed,
or unable or unavailable to work because of one of the COVID–19-related reasons
outlined in Section 2102(a)(3)(A)(ii)(I) of the CARES Act.
An individual is considered available for work under State law if he is available
for work that is suitable for him. Many State laws provide that work is unsuitable
if it exposes an individual to safety risks. If an individual receiving PUA is offered
work that unreasonably exposes him to COVID–19, the State providing those bene-
fits could conclude that the work is not suitable, if permitted under the State’s suit-
able work provisions. The individual would still be considered available to work and
potentially eligible for PUA, provided the other eligibility requirements are met.
Likewise, if an individual were to turn down work that would be considered suitable
under State law but turned the work down for one of the COVID–19-related reasons
in Section 2102(a)(3)(A)(ii)(I) of the CARES Act, the individual would still be eligible
for PUA.
PUA ELIGIBILITY FOR WORKERS WITH IMMUNOCOMPROMISED
INDIVIDUALS IN THEIR HOUSEHOLD
Question. In my May 19th letter, I also asked you to clarify that someone may
claim PUA if they are advised by a health-care provider to stay home because a
member of their household is immunocompromised or at heightened risk from
COVID–19.
Will the Department issue guidance clarifying that such individuals are eligible
for PUA? If you disagree that such individuals are generally eligible for PUA under
current law, please inform Congress of any necessary technical changes to the law
that would ensure they are eligible.
Answer. On April 27, 2020, the Department published guidance on how an indi-
vidual could make a claim for PUA if she was advised by a health-care provider to
stay home because a member of her household is immunocompromised or at height-
ened risk from COVID–19. Specifically, this clarification was provided in Question
41 in Attachment I to Unemployment Insurance Program Letter 16–20, Change 1,
(https://wdr.doleta.gov/directives/corr_doc.cfm?DOCN=5899).
Section 2102(a)(3)(A)(ii)(I)(ff) of the CARES Act provides that an individual ‘‘who
is unable to reach the place of employment because the individual has been advised
by a health-care provider to self-quarantine due to concerns related to COVID–19’’
may be eligible for PUA, provided she meets the other eligibility requirements. This
assessment of eligibility does not require a specific underlying reason for the health-
care provider’s advice to self-quarantine due to concerns related to COVID–19.
PUA ELIGIBILITY FOR CHILD CARE PROVIDERS
Question. I have heard from self-employed child care providers in 41 States who
have been rejected for PUA even after losing most of their business. This has been
a particular problem for providers who have faced a significant drop in income but
are not working fewer hours. For example, if a child care provider cared for 10 chil-
dren before the pandemic but now only cares for one, the provider will have experi-
enced a significant drop in work and income, but still may work the same number
of hours. In some States, claimants have been told they do not qualify for PUA sim-
ply because they have not experienced a reduction in hours. Lost income should be
sufficient to qualify the individual for PUA, but there appears to be significant con-
fusion in many States about how to process these types of claims.
Other child care providers have been told that they were ineligible for PUA be-
cause they reported that they are not looking for work. A child care provider who
is still watching a few children is not necessarily able to look for a new job. In this
context, as long as the provider is willing to accept more children into care (while
still meeting relevant social distancing and public health requirements), they should
be considered to meet work search requirements.
Will you provide clarifying guidance to States on how to treat situations like those
described above? If you disagree that child care providers in situations like these
are generally eligible for PUA under current law, please inform Congress of any nec-
essary technical changes to the law that would ensure they are eligible.
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Answer. One of the qualifying conditions for an individual to receive PUA is that
he is unemployed, partially unemployed, or unable or unavailable to work for a
COVID–19 related reason listed in the CARES Act.
The PUA program under the CARES Act is largely modeled after the Disaster Un-
employment Assistance (DUA) program and relies on the DUA regulatory frame-
work where the CARES Act is silent. DUA regulations provide that a self-employed
individual performing less than the customary full-time services is considered par-
tially unemployed.
Child care providers in the situation you describe may be considered to be par-
tially unemployed under the DUA regulations. Further, under the eligibility criteria
the Department added pursuant to the authority in CARES Act Section
2102(a)(3)(A)(ii)(I)(kk), self-employed workers who have sustained a significant dimi-
nution of their customary full-time services because of COVID–19 may be eligible
for PUA where they are forced to suspend the provision of services, though their
benefit amount may be reduced because of income. The Department has aimed to
make clear that this also applies to those who do not suspend the provision of serv-
ices, and additional clarifying guidance will be issued to States in the near future.
With respect to your question regarding work search efforts, the Social Security
Act requires that an individual collecting unemployment benefits actively search for
work. However, the State has considerable discretion to determine the types of suit-
able work that individuals must seek. Additionally, FFCRA provides States with the
ability to modify or suspend the requirement to actively seek work in response to
the spread of COVID–19.
PUA ELIGIBILITY FOR SELF-EMPLOYED INDIVIDUALS WHO WORK FROM HOME
Question. There has been some confusion about whether self-employed individuals
who work from home (e.g., freelance writers) qualify for PUA. It appears that some
States are saying that an individual cannot qualify for PUA if they are able to
telework, but based on the law and the guidance the Department has already
issued, a self-employed individual who would usually work from home but is no
longer getting paid for any work would be eligible for PUA. You indicated that you
agreed with this perspective in your response to a similar question from Senator
Warner during the hearing.
Will you provide additional guidance to States to ensure that they are admin-
istering PUA correctly for self-employed individuals who usually work from home?
If you disagree that such individuals are generally eligible for PUA under current
law, please inform Congress of any necessary technical changes to the law that
would ensure they are eligible.
Answer. Section 2102(a)(3)(B) of the CARES Act provides that an individual who
has the ability to telework with pay is not covered under PUA. However, in the sce-
nario presented, if the individual has experienced a significant diminution of free-
lancing work because of the COVID–19 pandemic, regardless of her ability to
telework, and provided the individual meets the other eligibility requirements, she
could be eligible for PUA under the criteria the Department issued under Section
2102(a)(3)(A)(ii)(I)(kk) of the CARES Act and in the Department’s subsequent guid-
ance.
WORKERS WITH WAGE AND SELF-EMPLOYMENT INCOME
Question. There have been a lot of questions and confusion about workers that
have both wage and self-employment income. I have heard stories of workers being
denied PUA if they continue to have any W–2 income at all, even if the majority
of their income is generally self-employment income from a job they have lost. For
example, a musician may continue to earn a minimal amount through a part-time
W–2 job, but because they are no longer performing, they have lost the vast major-
ity of their self-employment income. While eligibility will depend on an individual’s
specific circumstances and State laws, I have heard a number of concerning reports
that people are being automatically denied PUA if they have any W–2 income—even
if they don’t qualify for regular unemployment compensation—despite the fact that
the vast majority of their income has been lost.
Can you provide additional guidance to States for how claims should be processed
for workers with both wage and self-employment income, to ensure that these work-
ers receive PUA when they are eligible for it?
Answer. An individual should not automatically be denied PUA, as authorized
under the CARES Act, simply because he has W–2 income. If an individual has suf-
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ficient covered employment (i.e., W–2 income) to qualify for regular unemployment
compensation and meets the other eligibility requirements, then he is eligible for
regular unemployment benefits and not eligible to receive PUA. The monetary re-
quirements for regular unemployment compensation depend on State law.
If the individual is ineligible for regular unemployment benefits and is unem-
ployed, partially unemployed, or unable or unavailable to work due to a listed
COVID–19-related reason under the CARES Act, he may be eligible for PUA. PUA
eligibility includes both covered employment and non-covered employment (e.g., self-
employment).
STATE TECHNOLOGY
Question. We know that almost every State workforce agency has sorely outdated
technology, and all State systems need upgrades. We also know that it will be hard
for States to make all of the necessary upgrades while they are buried in millions
of unemployment claims. Have any States made successful IT transformations dur-
ing this pandemic that allow them to process significantly more claims?
Looking ahead, rather than having each State develop their own technology, is it
worth considering whether it would be more efficient to have the Department of
Labor develop a modern benefits administration system that all of the States could
interface with to administer benefits? If so, what features should such a system
have, and what can Congress do to initiate or speed up this process?
Answer. The Department recognizes the need to modernize State UI IT systems.
The COVID–19 pandemic has highlighted the unreliablity of State UI IT sys-
tems—something the Department worked to educate Congress about during the
drafting of the CARES Act. The UI program is structured as a Federal-State part-
nership based on Federal law but administered by States under State law. This
structure makes the program unique among the country’s benefit programs in that
States have significant flexibility to establish eligibility provisions, benefit duration
and levels, and taxing structures to pay for benefits.
While State flexibility is important, this structure and the variance in State laws
and processes make it more difficult to develop efficient administrative processes
and to implement technologies that will work across the 53 different States and ter-
ritories operating UI programs.
Despite these challenges, the Department believes it is feasible to implement mod-
ernization across States and would welcome the opportunity to work with Congress
and States to that end.
UI DATA
Question. The Department of Labor and the States have struggled to accurately
track data on the number of regular UI and PUA claims processed and paid. Right
now, it seems that no one can report with certainty how many people have received
a check and how many are still waiting for the benefits they are owed. How can
data collection and reporting be improved? What resources would the Department
and the States need from Congress to make these improvements?
Answer. The recent increase in unemployment claims processed by the State un-
employment insurance agencies is unparalleled. Prior to this increase, claims had
been at their lowest levels in 50 years. With the pandemic, States faced massive
claims volumes and the responsibility to implement significant new Federal pro-
grams. During this ramp up, States prioritized paying claims over reporting. Adding
to the workload, the PUA program is structured to require a determination of ineli-
gibility for regular UI.
Even though the Department provided guidance to States clarifying that it was
unnecessary to process a regular UI claim to determine eligibility for PUA—and
strongly discouraged States from doing so—many nevertheless mandated this extra
step. The Department advised States that PUA applications should not be counted
as initial claims. Because of the staggering workload and the overlap of the two pro-
grams, States struggled to process and report in a timely and accurate manner.
The Department does not currently collect data related to the number of pending
claims to be processed, although data on claims filed, claims paid, and the timeli-
ness of payment is collected. The Department will consider the need for additional
data.
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Funding for unemployment insurance administration is closely tied to unemploy-
ment claims levels. The recent increase in claims has resulted in an increase of ad-
ministrative funding to State agencies that should allow for increased staffing, tech-
nology capacity, and improved data collection and reporting. The Department be-
lieves that any system-wide technology enhancement should ensure more accurate,
timely, and simple reporting. The Department is ready to work with Congress on
potential strategies.
MISMANAGEMENT AND LACK OF OVERSIGHT OF
FLORIDA’S UNEMPLOYMENT INSURANCE PROGRAM
Question. The Department of Labor’s Office of Inspector General recently put out
an advisory report with regard to the implementation of unemployment insurance
provisions in the CARES Act. One area it identified of particular concern was State
preparedness, particularly staffing and system capabilities.
It seems that no State has failed worse in this regard than the State of Florida.
The State of Florida’s Auditor General warned over four reports between 2015 and
2019 that the State’s unemployment system had widespread systemic flaws that
were not being addressed and would likely fail in the event of increased claims.
That is exactly what has happened. As claims ramped up and the system was
plagued with crashes and glitches, Florida was the only State in the country that
saw its unemployment trust fund grow in March and April.
Do you believe the State of Florida’s unemployment program was adequately pre-
pared for this economic crisis? Will you request that the Office of Inspector General
open a review of the failures and lack of preparedness of Florida’s unemployment
program?
Answer. Florida, and many other States, have faced challenges in the administra-
tion of their unemployment systems due to an unprecedented volume of claims and
the State’s information technology support system. The Department has offered
Florida, as well as weaknesses in other States, technical assistance to address these
challenges; Florida has accepted this assistance and has committed to remedy its
IT problems. The Department has been and will remain focused on helping Florida
and any other State or territory facing administration challenges improve its ability
to administer UI programs according to Federal law.
The Department will cooperate with the Office of Inspector General should it de-
cide to open an investigation.
100-PERCENT WAGE REPLACEMENT
Question. When we negotiated the CARES Act, we agreed, based on input from
the Department of Labor and from State workforce agencies, that State workforce
agencies would be unable to implement a policy that provided a benefit equal to
100-percent wage replacement on an individual basis. My recent conversations with
State workforce agencies have indicated that States are still unable to implement
such a policy without significant delays and complications. What is the Department
of Labor’s current position on this issue? Are States able to calculate 100-percent
wage replacement on an individual basis without unreasonable delays? If you be-
lieve such a policy is administratively feasible, please provide detail as to how you
came to this conclusion and which States you talked to in evaluating the issue.
Answer. The Department has been in ongoing conversations with States regarding
various proposed changes to CARES Act UI programs, and surveyed all the States
on their capacity to implement a wage replacement structure. Although the time the
States reported they would need to do so varied widely. We believe that all States
have the ability to implement such a program within a few months at most.
QUESTIONS SUBMITTED BY HON. MARIA CANTWELL
Question. Washington State has four Department of Labor Job Corps Centers that
employ approximately 130 people and serve hundreds of students a year. These
Centers not only provide critical job training and careers to students, they also pre-
pare students to meet the needs of local communities and Washington State. For
example, in 2018 Washington State Job Corps Centers provided 119,539 hours of
needed fire support.
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It is important the Job Centers continue to train students and be a resource, how-
ever, we must ensure employees and students are able to return to the Job Centers
safely during the COVID–19 pandemic.
Has the Employment and Training Administration’s Office of Job Corps in the
U.S. Department of Labor issued COVID–19 guidance for the reopening of Job
Corps Centers?
Can the Department of Labor provide this guidance?
Answer. The safety and health of Job Corps students is the top priority of the Of-
fice of Job Corps (OJC). On March 17, 2020, the Department announced a tem-
porary pause in Job Corps Center operations in order to protect students from
coronavirus, and a mandatory spring break for all Job Corps centers was initiated.
On April 24th, Job Corps issued Program Information Notice 19–17 to contractors
regarding a transition to virtual operations and moving students from the COVID–
19 ‘‘paid leave status’’ used for spring break to a ‘‘present for duty status,’’ with stu-
dents participating virtually in various aspects of the program. All centers imple-
mented distance learning programs, which were in place by May 11, 2020.
The Department is now developing additional guidance to facilitate centers, fur-
ther reopening. OJC will provide a copy of the updated guidance to the Senate Fi-
nance Committee when it is released to the Job Corps Center operators.
Question. How has the Department of Labor worked with local communities and
States to adhere to State and county reopening plans?
Answer. To keep Job Corps Centers and students safe as they resume physical
operations, the Department’s guidance will reflect consideration of guidance from
the CDC and Occupational Safety and Health Administration, as well as other ex-
perts and authorities. Center operators will be required to work within State and
local guidelines as they plan for center reopenings; all reopening plans will be re-
viewed by the OJC national office.
Question. How has the Employment and Training Administration communicated
this guidance to Job Corps Center administrators and students?
Answer. OJC has been working with Job Corps Center operators since students
left campus to identify and implement the steps needed to bring students back to
the centers. OJC has been in constant contact with center operators in order to de-
velop guidance to safely return, house, educate, and support students at the centers.
In addition, center operators are authorized to procure products for the safety of the
students and to make physical changes at centers to support resumption of physical
operations.
QUESTIONS SUBMITTED BY HON. ROBERT MENENDEZ
Question. Recent jobs reports indicate that State and local governments have shed
more jobs in one month than in the entirety of the Great Recession. Projections by
Moody’s show that every State in the Nation has already, or will soon have historic
budget shortfalls. If Congress does not act soon to help State and local governments,
they are going to have to cut essential services businesses rely on, layoff or furlough
public safety and emergency health personnel, or raise taxes. This will make it
harder for businesses to reopen, drag the recession even deeper and make it more
difficult to dig our way out of this hole.
Prominent economists, like Glenn Hubbard, have called on Congress to provide
$1 trillion in additional aid to States and cities. Mark Zandi predicted there would
be 3 million State and local job losses in the next year alone, if Congress fails to
act. Glenn Hubbard said ‘‘I can’t imagine a successful (relief) package without
that. . . . This is about as close to a no-brainer that you could do as possible.’’
Do you agree with these economists that assistance to State and local govern-
ments is essential in the next economic package?
Answer. The Department worked swiftly to implement the provisions of FFCRA,
which provided $1 billion in administrative funding to State UI agencies. This as-
sistance was critical to enabling them to address the unprecedented number of UI
claims that resulted from the COVID–19 pandemic. The CARES Act provided $345
million in funding for Dislocated Worker Grants. To date, the Department has obli-
gated initial funding increments for 57 grants totaling more than $248 million,
which is in excess of two-thirds of the funding provided under the CARES Act.
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Funds will be used for disaster-relief cleanup and humanitarian assistance for the
communities identified by the applicants as significantly affected by COVID–19, and
for employment and training activities.
As the country continues to re-open and Americans return to their jobs, the De-
partment is available to work with Congress on potential strategies to address the
challenges faced by State and local governments.
Question. As you know, a majority of States are in need of modernizing their sys-
tems. These system modernizations are multi-year complex processes that require
a permanent funding stream.
Is the Department of Labor considering plans for a uniform Federal solution for
Unemployment Insurance modernization?
Answer. The Department recognizes the need to modernize State UI IT systems.
The COVID–19 pandemic has highlighted the unreliablity of State UI IT sys-
tems—something the Department worked to educate Congress about during the
drafting of the CARES Act. The UI program is structured as a Federal-State part-
nership based on Federal law but administered by States under State law. This
structure makes the program unique among the country’s benefit programs in that
States have significant flexibility to establish eligibility provisions, benefit duration
and levels, and taxing structures to pay for benefits.
The Department has been in ongoing conversations with States regarding various
proposed changes to CARES Act UI programs, and surveyed all the States on their
capacity to implement a wage replacement structure. Although the time the States
reported they would need to do so varied widely. We believe that all States have
the ability to implement such a program within a few months at most.
Question. The CARES Act enhanced and expanded unemployment to help workers
make ends meet during these uncertain times. Specifically, Pandemic Unemploy-
ment Assistance (PUA) has been a critical lifeline for independent contractors, gig
workers, and the self-employed. However, some home-based self-employed child care
workers have faced challenges accessing PUA.
Is the Department of Labor considering any technical changes to PUA to ensure
that self-employed family child care home-based providers can access either full un-
employment benefits or partial unemployment compensation?
Answer. One of the qualifying conditions for an individual to receive PUA is that
she be unemployed, partially unemployed, or unable or unavailable to work for a
COVID–19 related reason listed in the CARES Act.
The PUA program under the CARES Act is largely modeled after the DUA pro-
gram and relies on the DUA regulatory framework where the CARES Act is silent.
DUA regulations provide that a self-employed individual performing less than the
customary full-time services is considered partially unemployed.
Child care providers in the situation you describe may be considered to be par-
tially unemployed under the DUA regulations. Further, under the eligibility criteria
the Department added pursuant to the authority in CARES Act Section
2102(a)(3)(A)(ii)(I)(kk), self-employed workers who have sustained a significant dimi-
nution of their customary full-time services because of COVID–19 may be eligible
for PUA where they are forced to suspend the provision of services, though their
benefit amount may be reduced because of income. The Department has aimed to
make clear that this also applies to those who do not suspend the provision of serv-
ices, and additional clarifying guidance will be issued to States in the near future.
QUESTIONS SUBMITTED BY HON. BENJAMIN L. CARDIN
Question. Can you elaborate on the nature of the problems faced by the Interstate
Connection Network (ICON) earlier in 2020?
Answer. The Interstate Connection Network (ICON) is a secure, national tele-
communications network through which States exchange UI claims-related data and
other data. It operates as an information gateway, providing more than 30 applica-
tions that enable the exchange of information among States and Federal agencies
to determine eligibility for unemployment benefits; the applications include cross-
matches with the Social Security Administration to verify claimants’ Social Security
numbers.
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Similar to State systems strained by high volumes of UI claims, ICON experi-
enced performance and capacity issues in late March 2020. The Department worked
quickly with the National Association of State Workforce Agencies (NASWA) and
funded an upgrade for ICON to a more powerful mainframe that immediately took
care of most of the difficulties States were experiencing—these were resolved in
early April 2020.
Some States, however, had problems with their own systems being able to submit
data to ICON for processing and receiving data back into their own systems.
NASWA and the vendor worked with the individual States facing these problems
to identify solutions and make accommodations where feasible.
Question. When were these problems present, and when were they resolved?
Answer. Since April 5th, ICON has had no further performance problems. When
the Department has learned of difficulties, it has worked with NASWA and the ven-
dor to provide information technology support to gain insight on the source of the
problem and resolve it.
Question. Are there any notable administrative requirements for States that Con-
gress can relax or streamline at least for the duration of this crisis?
Answer. The Department continues to work with States as they provide benefits
and monitor and correct fraudulent activity. The Department will use these experi-
ences to consider possible legislative actions and will share any proposals as they
are developed by the administration. The Department will work with Congress to
explore opportunities to make the unemployment insurance program more efficient,
streamlined, and responsive to administrators and participants in the program.
Question. Are there any changes to the current model of collaboration between the
Federal and State governments that you think could improve the provision benefits?
Answer. The variation across State UI programs can make it challenging to imple-
ment nationwide programs and enhancements, such as a modernization of State UI
information technology systems. The Department will work with Congress and the
States to explore strategies to address these challenges.
QUESTIONS SUBMITTED BY HON. SHERROD BROWN
Question. According to the Department of Labor website, OSHA has received
nearly 5,000 complaints from workers for worker safety concern related to COVID–
19. At the hearing, you mentioned that OSHA is pursuing a number of investiga-
tions related to COVID–19 complaints.
How many on-site, in-person inspections has OSHA completed in response to
workers’ COVID–19 complaints as of June 15th? How many have resulted in any
sort of citation of the employer for failing to protect workers? Please provide a list
of all on-site, in-person inspections conducted as a result of a worker complaint and
the outcome of those inspections.
Answer. The Occupational Safety and Health Administration’s (OSHA) data sys-
tem does not currently distinguish between on-site and remote inspections, and
therefore the requested list cannot be generated. OSHA conducted a total of 772
COVID-related inspections from February 2, 2020 through July 30th. OSHA inves-
tigates every Federal complaint and referral and has responded to 8,464 complaints
and referrals as of July 30th. As of July 30th, four COVID–19-related citations have
been issued. One citation was issued on May 18th, and three were issued on July
13th. The majority of inspections are still open at this time. OSHA is working expe-
ditiously to complete them.
Question. I wrote you a letter dated April 9, 2020 urging DOL to issue guidance
instructing States on how to allow employers to submit employee information
through the WARN system or its equivalent to speed up the unemployment insur-
ance application process. In your recent response, you stated that ‘‘the majority of
States have standard UI program processes in place for employers to provide em-
ployees’ separation information to the State in a single communication.’’
Please provide a list of the States who do not currently have a process in place
for employers to provide employees’ separation information in a single communica-
tion.
Answer. This question refers to two different processes. One is the Worker Adjust-
ment and Retraining Notification (WARN) Act process. The other is the systems
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some State UI agencies, like Georgia’s, have to allow employers to submit lists of
employees in a single file for unemployment compensation determination.
Under the WARN Act, employers are required to notify State and local govern-
ments when making a qualifying layoff or worksite closing in order to trigger rapid
response services. The Department does not collect information on State practices
to enable employers to provide separation information on multiple individuals at the
same time, but is aware anecdotally that most States implement this practice to ex-
pedite claims processing. Therefore, the Department is unable to provide the list re-
quested.
Question. In its June 4, 2020 response to Chairman Grassley, the Congressional
Budget Office found that the temporary increase of $600 per week in unemployment
benefits has increased unemployment recipients’ spending on food, housing, and
other goods and services such that it is closer to what they spent when they were
employed. That is why the CBO found that ‘‘an extension of the additional benefits
would boost the overall demand for goods and services, which would tend to increase
output and employment.’’
Do you agree with CBO that the additional $600 in weekly unemployment bene-
fits has had a stimulative effect on the economy?
Answer. Congress passed the CARES Act as the U.S. economy was shutting down.
The $600 weekly payment was an important, extraordinary measure to support
workers who in many instances were being prohibited from earning a living as a
result of necessary public health measures put in place by States and locales. A
study by the University of Chicago indicates that more than two-thirds of workers
receiving benefits under the CARES Act have seen their wages replaced at rates
above 100 percent, with some low-wage workers experiencing replacement rates
above 200 percent (https://bfi.uchicago.edu/working-paper/2020-62/). The Con-
gressional Budget Office, in response to a query by Chairman Grassley, has reported
that if the $600 plus-up were continued past July, five-sixths of the covered workers
would receive higher payments through unemployment than by working, resulting
in a more elevated unemployment rate than would occur otherwise. Given these cir-
cumstances, Congress’s decision to sunset the $600 plus-up at the end of the month
was appropriate. Unemployment benefits will continue to be important after July,
but as the economy re-opens and jobs return, it will be appropriate to take a dif-
ferent approach than taken in March as the economy was closing. The Department
is available to work with Congress to fashion the approach that best support work-
ers and economic growth.
QUESTIONS SUBMITTED BY HON. MICHAEL F. BENNET
Question. This crisis has had different effects on different communities. When it
comes to the economic costs, black and Hispanic workers are far more likely to re-
port having lost a job or income than white workers. Even though unemployment
decreased overall in May, unemployment for black workers went up and unemploy-
ment rates for black and Hispanic workers remained very high.
We need more specific data to understand how we got here, and to create a more
equitable system for black and Hispanic workers, who are experiencing severe eco-
nomic conditions during this crisis.
Recently, your agency began include beneficiaries of Federal unemployment bene-
fits in its weekly claims reports. However, they continue to be omitted from the De-
partment’s monthly report, which includes important information on characteristics
of recipients, such as race and gender. This seems like important data to have.
Will you commit to providing States with guidance for reporting characteristics
of workers receiving benefits through Federal programs and reporting this data each
month for the duration of these programs?
Answer. Demographic data related to unemployment insurance programs can be
valuable in analyzing the effect COVID–19 job and income loss has had on African-
American and Hispanic workers. The Department has not historically required
State reporting on claimant demographics for temporary programs that require
swift implementation, given the urgent need to provide benefits to eligible individ-
uals. The Department will consider the feasibility of requiring reporting on claimant
demographics for the CARES Act programs.
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Question. With more timely data on the full set of claimants, policymakers and
researchers could get a better picture of the unemployment situation across different
communities, especially our black and Hispanic workers.
Will you commit to providing States with guidance for reporting initial claims and
continuing claims data by race in weekly unemployment data releases?
Answer. As noted, the Department has not historically required State reporting
on claimant demographics for temporary programs that require swift implementa-
tion, given the urgent need to provide benefits to eligible individuals. The Depart-
ment will consider the feasibility of requiring reporting on claimant demographics
for the CARES Act programs.
Question. I’d like to ask about the guidance issued by the Department of Labor
on health and safety standards and people returning to work, particularly a regula-
tion that States that ‘‘a position shall not be deemed to be suitable for an individual
if the circumstances present any unusual risk to the health, safety, or morals of the
individual.’’
Your agency has issued conflicting and unclear guidance here. My home State of
Colorado has clarified that workers receiving unemployment benefits who live with
older and immunocompromised people should not be required to return to work
under the ‘‘suitable work’’ rules, but that’s not been adopted across the country.
I read about a woman named Tania Goolsbee, a maid whose husband has COPD
and chronic emphysema. She’s worried about going back to work when the risk of
COVID–19 is still high. As she said, ‘‘If I were to bring [coronavirus] home to my
husband, it would kill him.’’1
Wouldn’t you agree that, because she can’t control the circumstances of her work-
place, she is facing an unusual risk?
Answer. The Department’s guidance on this issue is not conflicting. A State has
significant flexibility in determining the suitability of employment and defining
terms such as ‘‘unusual risk.’’ The Federal Unemployment Tax Act provides baseline
Federal criteria for a State to use in determining the suitability of work, including
that work is unsuitable ‘‘if the wages, hours, or other conditions of the work offered
are substantially less favorable to the individual than those prevailing for similar
work in the locality.’’ The Department’s regulations allow States discretion to define
availability, as long as the definition excludes full withdrawal from the labor mar-
ket. On March 12, 2020, the Department published Unemployment Insurance Pro-
gram Letter 10–20 (https://wdr.doleta.gov/directives/attach/UIPL/UIPL_10-
20_Acc.pdf), which provided States guidance in the flexibilities available to them in
interpreting suitable work in the COVID–19 context. In assessing whether someone
has good cause to not return to work or refuse suitable work, it is not sufficient for
the individual to have a generalized fear of the virus; States must determine if there
is a factual basis for the individual to believe that it is not safe to return to work
or accept suitable work.
Question. Will you commit to publishing new guidance and FAQs to provide clar-
ity on the standards for when workers remain eligible for State or Federal unem-
ployment benefits if they leave work or refuse to work due to legitimate COVID–
19 health and safety concerns?
Answer. One of the Department’s top priorities is to ensure that workers are re-
turning to safe workplaces. The Department has already provided guidance on this
issue.
The Department’s guidance in UI Program Letter 16–20, Change 1, Question 50,
addresses the issue under the PUA program. An individual is eligible for benefits
if he is otherwise able to work and available for work within the meaning of applica-
ble State law, but is unemployed, partially unemployed, or unable or unavailable
to work because of one of the COVID–19-related reasons outlined in Section
2102(a)(3)(A)(ii)(I) of the CARES Act. An individual who does not go to work due
to general concerns about exposure to COVID–19, and who does not meet any of
the other COVID–19 related criteria for PUA, is not eligible for PUA because a gen-
eral concern about exposure to COVID–19 is not one of the reasons listed in section
2102(a)(3)(A)(ii)(I) of the CARES Act.
1 https://whyy.org/articles/coronavirus-unemployment-benefits-are-high-putting-workers-and-
employers-at-odds/.
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With regard to the regular UI program, an individual is considered available for
work under State law if he is available for work that is suitable for him. Many State
laws provide that work is unsuitable if it exposes an individual to safety risks. If
an individual receiving benefits is offered work that unreasonably exposes him to
COVID–19, the State providing those benefits could conclude that the work is not
suitable, if permitted under the State’s suitable work provisions. We note that it
would not be appropriate for a State to determine that work is unsuitable simply
because of a worker’s generalized fear of COVID–19. The determination would need
to be based on facts about that particular workplace indicating that there is a rea-
sonable ground to believe that the individual is at risk of contracting the virus at
that workplace.
Question. Only 214,016 workers out of the 29.5 million claiming unemployment
benefits are benefiting from workshare programs. Roughly half of States still have
not adopted workshare programs. These programs allow employers to keep workers
on payroll at a reduced schedule. They allow workers to keep their benefits, like
health insurance, and most of their wages. And, the Federal Government will pay
up to 100 percent of their unemployment benefits. The CARES Act provided funding
for grants to States to establish or improve their workshare programs.
What is your agency doing to increase take-up of these programs among States
who have not yet adopted them?
Answer. The Short-Time Compensation (STC) program—also known as ‘‘work-
sharing’’ or ‘‘shared work’’—is a lay-off aversion program in which an employer,
under a State-approved plan, reduces the hours for a group of workers in lieu of
layoffs, and these workers in turn receive a reduced unemployment benefit payment.
Although the STC program can be operationally challenging for States to imple-
ment, the Department considers the STC program to be valuable for employers,
workers, and the economy—it saves jobs, keeps workers employed, and helps em-
ployers maintain their skilled workers.
The Department is working to expand the use of the STC program, within the
scope of current law, in ways that support the re-opening of State and local econo-
mies. Businesses that temporarily closed may use the STC program to bring back
most or all of their employees in a reduced capacity when they reopen if social
distancing measures, a decline in business, or other factors prevent operation at full
staffing levels.
The Department has provided guidance to States on the provisions of the CARES
Act related to the 100 percent Federal reimbursement of STC benefits through De-
cember 2020 and the available grants for implementation and expansion of State
STC programs and employer outreach. The Department is also providing technical
assistance to all States considering creation of a new STC program and is rolling
out a multi-pronged strategy to promote the adoption of STC programs in States
without them and the expansion of programs in States where they already exist.
Question. What are you doing to distribute these funds quickly so that States can
establish and improve these important programs that help workers and employers?
Answer. The Department has provided guidance to States on the STC provisions
in the CARES Act related to 100-percent reimbursement of benefits through Decem-
ber 2020 in addition to available grants for implementation and expansion of State
STC programs and employer outreach. The Department is also providing technical
assistance to any State considering creating a new STC program. In addition, the
Department is rolling out a multi-pronged strategy to promote State adoption of
STC, to expand STC programs in States that already have programs, and to encour-
age States to apply for the available grants as soon as feasible.
QUESTIONS SUBMITTED BY HON. ROBERT P. CASEY, JR.
Question. Can you provide a detailed list of all of the specific steps the Depart-
ment of Labor has taken thus far to promote and assist the creation and usage of
short-time compensation programs, also known as workshare programs?
Answer. The STC program—also known as ‘‘work-sharing’’ or ‘‘shared work’’—is
a lay-off aversion program in which an employer, under a State-approved plan, re-
duces the hours for a group of workers in lieu of layoffs, and these workers in turn
receive a reduced unemployment benefit payment. The Department considers the
STC program to be valuable for employers, workers, and the economy—it saves jobs,
keeps workers employed, and helps employers maintain their skilled workers.
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The Department is working to expand the use of the STC program, within the
scope of current law, in ways that support the reopening of State and local econo-
mies. Businesses that temporarily closed may use the STC program to bring back
most or all of their employees in a reduced capacity when they reopen if social
distancing measures, a decline in business, or other factors prevent operation at full
staffing levels.
The Department has provided guidance to States on the provisions of the CARES
Act related to the 100 percent Federal reimbursement of STC benefits through De-
cember 2020 and the available grants for implementation and expansion of State
STC programs and employer outreach. The Department is also actively providing
technical assistance to all States considering creation of a new STC program and
is also in the process of rolling out a multi-pronged strategy to promote the adoption
of STC programs in States without them and the expansion of programs in States
where they already exist.
Question. What additional specific steps does the Department of Labor intend to
take to promote and assist the creation and usage of workshare programs and what
does the agency view as the most significant ongoing challenges preventing greater
utilization of such programs?
Answer. The Department has provided guidance to States on the STC provisions
in the CARES Act related to 100 percent reimbursement of benefits through Decem-
ber 2020 in addition to available grants for implementation and expansion of State
STC programs and employer outreach. The Department is also providing technical
assistance to any State considering creation of a new STC program. In addition, the
Department is rolling out a multi-pronged strategy to promote State adoption of
STC, to expand STC programs in States that already have programs, and to encour-
age States to apply for the available grants as soon as feasible.
Question. Workers with disabilities often have the slowest return to work after
an economic downturn. The employment-to-population ratio for people with disabil-
ities after the Great Recession never returned to pre-recession levels. The May 2020
employment-to-population ratio for persons with disabilities ages 16 to 64 was 27.7
percent, down from 30.7 percent a year prior. What will the Department of Labor
do to ensure those workers with disabilities who have lost their jobs during this
pandemic are included in efforts to help workers return to work so that people with
disabilities do not experience the same slow return to employment they experienced
after the Great Recession?
Answer. The Department seeks to respond to the needs of workers with disabil-
ities and ensure that they can safely return to work.
Persons with disabilities experienced a slower economic recovery after the Great
Recession than persons without disabilities. Importantly, persons with disabilities
achieved significant employment gains from 2014 until March 2020 (pre-COVID–
19). According to the Current Population Survey (CPS), between 2009 and 2019, the
Employment-Population Ratio (proportion of the population employed) of working
age persons with disabilities reached a low of 26 percent in 2014, yet increased
steadily to 30.9 percent in 2019. The Unemployment Rate of working-age persons
with disabilities peaked in June 2011 at 18.6 percent and then fell gradually to 6.4
percent in May 2019, the lowest level on record since these data became available
in 2008.
In recent years, the Department’s Office of Disability Employment Policy (ODEP)
has implemented a number of initiatives designed to improve the employment out-
comes of individuals with disabilities. In partnership with the Department’s Bureau
of Labor Statistics and Chief Evaluation Office, ODEP has taken steps to collect ad-
ditional data on the employment of individuals with disabilities, such as adding a
Disability Supplement survey to the Current Population Survey. These efforts will
allow for a better understanding of the employment challenges experienced by indi-
viduals with disabilities.
ODEP and the Department’s Employment and Training Administration have
worked with the States for several years as they have established policies and prac-
tices to better serve individuals with disabilities, including through the Disability
Employment Initiative in which the Department awarded grants totaling approxi-
mately $139 million to 55 projects in 30 States over 8 years.
As a result of the COVID–19 pandemic, the Department bolstered the resources
provided to workers with disabilities, and the Department strengthened the re-
sources provided to employers to help them retain workers with disabilities. During
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the COVID–19 pandemic, the Department also increased the technical assistance
provided on reasonable accommodations, including those related to communicable
diseases and self-disclosure. ODEP is also working with States to help them im-
prove employment outcomes for individuals with disabilities as businesses reopen.
Additionally, the Occupational Safety and Health Administration issued guidance to
assist employers reopening non-essential businesses and their employees returning
to work (https://www.osha.gov/Publications/OSHA4045.pdf).
Question. As noted in the May 19th letter addressed to you and signed by 22 Sen-
ators, the CARES Act states that Disaster Unemployment Assistance (DUA) regula-
tions apply to Pandemic Unemployment Assistance (PUA). Section 625.13(b)(2) of
the regulations for DUA states that ‘‘a position shall not be deemed to be suitable
for an individual if the circumstances present any unusual risk to the health, safety,
or morals of the individual. . . .’’ Is it the position of the Department of Labor that
employers failing to take appropriate precautions to protect employees from
COVID–19 presents such a risk to the health and safety of workers? If so, why has
the agency not provided guidance clarifying what safety guidance must be imple-
mented by employers before their offers of employment to PUA recipients are
deemed suitable?
Answer. One of the Department’s top priorities is to ensure that workers are re-
turning to safe workplaces. OHSA has issued return to work guidance to provide
clarity to employers regarding the steps they can take to keep their workplaces safe
from COVID–19 (https://www.osha.gov/Publications/OSHA4045.pdf).
PUA eligibility, as it broadly relates to the ‘‘available for work’’ criterion and,
more specifically, to suitability, remains a matter of State law. The DUA regulations
generally apply to the PUA program. However, the DUA regulations do not apply
when they conflict with the CARES Act. Under the PUA program, an individual is
eligible for benefits if he is otherwise able to work and available for work within
the meaning of applicable State law, unless he is unemployed, partially unemployed,
or unable or unavailable to work because of one of the COVID–19-related reasons
outlined in section 2102(a)(3)(A)(ii)(I) of the CARES Act.
An individual is considered available for work under State law if he is available
for work that is suitable for him. Many State laws provide that work is unsuitable
if it exposes an individual to safety risks. If an individual receiving PUA is offered
work that unreasonably exposes him to COVID–19, the State providing those bene-
fits could conclude that the work is not suitable, if permitted under the State’s suit-
able work provisions. The individual would still be considered available to work and
potentially eligible for PUA, provided the other eligibility requirements are met.
Likewise, if an individual were to turn down work that would be considered suitable
under State law but turned the work down for one of the COVID–19-related reasons
in section 2102(a)(3)(A)(ii)(I) of the CARES Act, the individual would still be eligible
for PUA.
Question. Please provide detailed data on the following:
The number of COVID–19 safety and health complaints OSHA has received each
week since January 1, 2020, including weekly national totals and weekly State to-
tals.
Answer. The table below provides the number of COVID–19 safety and health
complaints OSHA has received per week since January 1, 2020 (Federal OSHA
only).
Number of Complaints
January All 1
February 2/2 to 2/8 1
2/9 to 2/15 4
2/16 to 2/22 3
2/23 to 2/29 4
March 3/1 to 3/7 32
3/8 to 3/14 86
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Number of Complaints
3/15 to 3/21 500
3/22 to 3/28 503
April 3/29 to 4/4 488
4/5 to 4/11 458
4/12 to 4/18 433
4/19 to 4/25 477
May 4/26 to 5/2 438
5/3 to 5/9 400
5/10 to 5/16 382
5/17 to 5/23 343
5/24 to 5/30 288
June 5/31 to 6/6 279
6/7 to 6/13 289
6/14 to 6/20 305
6/21 to 6/27 283
July 6/28 to 7/4 279
7/5 to 7/11 361
7/12 to 7/18 356
7/19 to 7/25 299
7/26 to 7/30 185
Total 7,477
Question. The number of COVID–19 whistleblower complaints OSHA has received
each week since January 1, 2020, including weekly national totals and weekly State
totals.
Answer. The table below provides the number of COVID–19 whistleblower com-
plaints OSHA has received per week from January 1, 2020 * through the week start-
ing July 30th. It includes weekly nationwide totals and weekly State plan referral
totals.
Week Total COVID–19 WB State Plan COVID–19 WB Federal OSHA COVID–19
Starting Complaints, Nationwide Complaint Referrals WB Complaints
2/3/2020 0 0 0
2/10/2020 0 0 0
2/17/2020 1 0 1
2/24/2020 1 0 1
* OSHA data collection began as of February 1, 2020, and the first whistleblower complaint
was received the week of February 17, 2020.
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Week Total COVID–19 WB State Plan COVID–19 WB Federal OSHA COVID–19
Starting Complaints, Nationwide Complaint Referrals WB Complaints
3/2/2020 0 0 0
3/9/2020 5 4 1
3/16/2020 20 13 7
3/23/2020 89 32 57
3/30/2020 140 32 108
4/6/2020 175 30 145
4/13/2020 176 41 135
4/20/2020 166 42 124
4/27/2020 139 31 108
5/4/2020 162 34 128
5/11/2020 127 27 100
5/18/2020 143 18 125
5/25/2020 94 24 70
6/1/2020 141 22 119
6/8/2020 117 25 92
6/15/2020 94 38 56
6/22/2020 89 25 64
6/29/2020 92 12 80
7/6/2020 121 26 95
7/13/2020 110 36 74
7/20/2020 67 5 62
7/27/2020 17 1 16
Totals 2,286 518 1,764
Question. The total number of COVID–19-related inspections OSHA has com-
pleted each week since January 1, 2020, including weekly national totals and week-
ly State totals.
Answer. The table below provides the total number of COVID–19-related inspec-
tions OSHA has opened each week since January 1, 2020 (Federal OSHA).
Number of Inspections
February 2/2 to 2/8 0
2/9 to 2/15 0
2/16 to 2/22 1
2/23 to 2/29 0
March 3/1 to 3/7 1
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Number of Inspections
3/8 to 3/14 2
3/15 to 3/21 0
3/22 to 3/28 1
April 3/29 to 4/4 11
4/5 to 4/11 19
4/12 to 4/18 43
4/19 to 4/25 54
May 4/26 to 5/2 79
5/3 to 5/9 68
5/10 to 5/16 70
5/17 to 5/23 67
5/24 to 5/30 42
June 5/31 to 6/6 57
6/7 to 6/13 51
6/14 to 6/20 42
6/21 to 6/27 37
July 6/28 to 7/4 23
7/5 to 7/11 32
7/12 to 7/18 30
7/19 to 7/25 27
7/26 to 7/30 15
Total 772
Question. The average amount of time between when OSHA received a COVID–
19-related complaint and when an inspection occurred, when one did occur, since
January 1, 2020.
Answer. The average time between OSHA receiving a COVID–19-related com-
plaint and conducting an inspection is 3.3 days.
Question. The number of COVID–19-related complaints closed by OSHA each
week since January 1, 2020, including weekly national totals and weekly State to-
tals, as well as information on how many complaints were closed with and without
an inspection having occurred.
Answer. As of July 30, OSHA has received a total of 7,477 complaints, both formal
and nonformal, since January 1, 2020. Of those, 5,931 are now closed. Weekly data
can be found on OSHA’s website at: https://www.osha.gov/foia/archived-covid-19-
data.
Question. The number of citations OSHA has issued in response to COVID–19-
related complaints each week since January 1, 2020.
Answer. As of July 30th, four COVID–19-related citations have been issued. One
citation was issued on May 18th, and three citations were issued on July 13th.
Question. The number of total inspections OSHA has conducted per month since
January 1, 2019.
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Answer. The table below provides the number of total inspections OSHA has con-
ducted per month since January 1, 2019.
2019 Number of Inspections
January 2,880
February 3,043
March 3,336
April 3,537
May 3,158
June 3,175
July 3,428
August 3,444
September 2,783
October 3,378
November 2,663
December 2,237
Total 37,062
2020 Number of Inspections
January 2,660
February 2,440
March 1,780
April 538
May 888
June 1,642
July 1–30 1,214
Total 11,162
QUESTIONS SUBMITTED BY HON. MARK R. WARNER
Question. Secretary Scalia, as we discussed at the June 9th hearing, for a number
of years, I have been calling on Congress to set up a national impact evaluation
fund for States, cities, and non-profits to experiment with portable benefits innova-
tion for independent workers to make sure that every worker in America has access
to a safety net.
This is important for our economy as a whole—economists have found that access
to portable benefits like health care increases business creation. We need that kind
of innovation for worker benefits because this patchwork system of benefits we have
doesn’t go away after this crisis.
I hope you can agree that in a 21st-century economy we shouldn’t need an act
of Congress to shore up our safety net for American workers in the next economic
downturn?
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Answer. Access to affordable health insurance and retirement savings programs—
which are often tied to employment—is important for American workers and their
families, and is a priority for the administration and the Department. Working with
the Department of Health and Human Services and the Department of the Treas-
ury, the Department of Labor has taken three regulatory actions to provide greater
choice and affordability in health coverage for American workers.
The Health Reimbursement Arrangements (HRAs) rule will allow workers to shop
for plans in the individual market and select coverage that best meets their needs.
Individual coverage HRAs are designed to give working Americans and their fami-
lies greater control over their health care by providing an additional way for em-
ployers to finance health insurance. Under the rule, employers will be able to use
individual coverage HRAs to provide their workers with tax-preferred funds to pay
for the cost of health insurance coverage that workers purchase in the individual
market, subject to certain conditions. This option gives workers greater choice in
coverage, increases the portability of their coverage, and generally improves their
economic well-being.
Association Health Plans (AHPs) will allow small businesses, including self-
employed workers, to band together by geography or industry to purchase high-
quality, affordable health insurance. By negotiating together, these small businesses
gain the negotiating leverage normally enjoyed by much larger companies. The aim
of the Department’s 2018 AHP rule was to expand access to affordable, high-quality
health-care options, particularly for employees of small employers. Unfortunately, a
group of State attorneys general brought suit, and a Federal court vacated portions
of the AHP rule. This was a setback for the 400,000 otherwise uninsured individuals
nationwide who would have gained coverage under the rule. The Department has
appealed the decision and is awaiting a ruling.
The Short-Term, Limited-Duration Insurance (STLDI) rule is designed to fill gaps
in coverage that may occur when an individual is transitioning from one plan or cov-
erage to another plan or coverage, such as when in between jobs. For Americans
who are priced out of ACA-compliant insurance, access to STLDI can serve as a
safeguard during a period of transition.
Finally, Congress recently passed the Setting Every Community Up for Retire-
ment Enhancement Act. This important legislation, which builds on the Association
Retirement Plans (ARPs) rule issued by the Department in July 2019, allows em-
ployers to join multiple employer plans (MEPs). These plans enable employers to
join retirement plans that are administered by a ‘‘pooled plan provider,’’ even where
the employers do not have a common interest other than adopting the plan. By
banding together, employers can share the administrative burden of providing a re-
tirement plan.
The Department is always willing to discuss with Congress other ways to provide
flexible, affordable health insurance and retirement options for workers.
Question. In the second panel at the June 9th hearing, we heard advocates say
that being a member of a union is a significant predictor of getting UI benefits fast-
er in this crisis, I’m sure because these workers have an advocate and because they
have an institution working to get helpful information directly to them. In Sweden,
Belgium, and Denmark, unions actually help deliver government-supported unem-
ployment insurance directly to workers through their Ghent system.
How can the Department of Labor empower unions and worker advocate non-
profits to help get benefits like UI to workers in an American context?
Answer. The UI system was designed as a Federal-State partnership, and States
have significant discretion in administering the program. Unions and other organi-
zations may provide assistance to individuals who seek to submit unemployment
claims. There is a real need for modernization of UI systems across States, and the
Department is available to work with Congress and States on the modernization of
States’ UI systems.
Question. What are some solutions we can put in place so that employers cannot
free-ride on these programs?
Answer. Whether a free-rider problem exists, and how to address it, depends on
the details of the partnership arrangement. Consideration also should be given to
the effects on non-members of the union or organization, particularly if employers
contribute to or otherwise provide support for the program.
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Question. The Markup did a series of investigations on State UI systems and
found that online benefits systems have buckled under the weight of unprecedented
applicants. In my April 3rd letter to the Department, I noted that the ‘‘Department
of Labor should be taking the lead on innovative technological solutions that relieve
the burden on States to recreate the wheel on their own.’’ In particular, I mentioned
that ‘‘vendors with cloud-based solutions for PUA processing could streamline the
process for State unemployment agencies.’’ We have seen cloud-based upgrades work
well in Rhode Island, Connecticut, Maine, and Mississippi, the latter of which up-
dated to the cloud after Hurricane Katrina hit.
In the context of a global pandemic and the worst economic crisis we’ve seen since
the Great Depression, why did the agency not look into contracting with vendors
for cloudbased solutions to streamline the process for States?
Answer. Cloud-based solutions can potentially address a number of the problems
with UI technology that arose during the COVID–19 pandemic. For instance, cloud-
based solutions could enable State UI applications to more effectively handle a high
volume of claims. Under the longstanding Federal-State partnership toward UI,
States maintain their own UI technology systems—which vary widely—and States
are responsible for decisions about vendors and specific technology solutions. The
Department has worked tirelessly, however, to help States develop technology solu-
tions to deliver benefits effectively to eligible individuals. The Department’s Chief
Information Officer and the U.S. Digital Service provided consultation to 15 States
since the beginning of the pandemic, which included consultation on cloudbased so-
lutions. In addition, the Department-funded UI Information Technology Support
Center provided technical assistance and shared best practices with 43 State unem-
ployment insurance agencies. The help provided by the UI Information Technology
Support Center included technology options to address enhanced claims volume and
assistance in effectively implementing the new CARES Act programs. These tech-
nical assistance resources remain available to the States.
Question. Can you provide an estimate to this committee on how much it would
cost for every State to modernize its Unemployment Insurance IT infrastructure?
Answer. On average, modernized State UI IT systems that handle both Unem-
ployment Insurance tax and benefit administration have cost tens of millions of dol-
lars and, in some cases, more than $100 million.
Question. As you likely know, a vast majority of Americans receive health-care in-
surance from their employer. Some estimates show as many as 80 percent of non-
Medicare eligible individuals are enrolled in employer based coverage.
I am concerned that in the wake of massive job loss and in the midst of a global
pandemic this administration has not done enough to ensure Americans with em-
ployer sponsored benefits have access to the health-care services they need.
I have already called on Leadership here in Congress to include strong health-
care provisions in any future legislation Congress passes to address COVID–19, spe-
cifically: increased support for Medicaid, financial support for those enrolled in
COBRA coverage, reopening the ACA marketplace so that additional individuals can
enroll, and also adjusting premium assistance to those currently on the ACA ex-
change to ensure more can enroll in quality coverage.
How has your Department worked to ensure that millions of Americans who have
lost their jobs and are at risk of losing their employer sponsored health-care cov-
erage can still get the medical treatment they need? Is this something you have
worked with HHS or the administration on?
Answer. In response to the COVID–19 pandemic, the Department—in conjunction
with the Internal Revenue Service—provided extensions to allow participants and
beneficiaries of employee benefit plans additional time to make important health
coverage and other matters affecting their benefits. The Department’s guidance ex-
tended the time to elect COBRA continuation coverage and the date for making
COBRA premium payments.
Additionally, on May 1, 2020, the Department issued Frequently Asked Questions
(FAQs) about COBRA and revised COBRA model notices. These model notices are
intended to be used by plan administrators to notify plan participants and bene-
ficiaries of their rights under COBRA and to notify qualified beneficiaries of their
rights to elect COBRA. The revised COBRA model notices include new information
to help Medicare-eligible Americans make key decisions regarding their health-care
coverage by addressing COBRA’s interaction with Medicare and explaining that
there may be advantages to enrolling in Medicare before, or instead of, electing
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COBRA. The FAQs highlight that if an individual is eligible for both COBRA and
Medicare, electing COBRA coverage may affect enrollment in Medicare as well as
certain out-of-pocket costs.
Question. What should we tell the millions of Americans who have lost their em-
ployer sponsored health-care coverage and may need access to care during the midst
of this global pandemic? Shouldn’t the administration and Leaders in Congress be
working with us to strengthen the ACA marketplace and Medicaid, which could
serve as a critical pathway to medical treatment for the millions of Americans losing
their jobs? Or should we just leave them out to dry?
Answer. There are a number of options available to individuals who have lost
their employer-sponsored health-care coverage. For example, COBRA continuation
coverage allows for the continuation of group health benefits provided by an individ-
ual’s group health plan. The law generally applies to all group health plans main-
tained by private-sector employers with 20 or more employees. Under COBRA, eligi-
ble employees are generally able entitled to enroll in COBRA coverage for 18
months. Qualified beneficiaries entitled to 18 months of COBRA continuation cov-
erage who experience a second qualifying event or who become disabled during an
18-month COBRA coverage period may be eligible to extend their COBRA continu-
ation coverage for an additional 18 months for a total of 36 months. Employers and
plans are required to provide notice to employees and family members explaining
their COBRA rights.
As noted in the Department’s FAQs on COBRA Continuation Health Coverage for
Workers, eligible individuals should consider all options available to them. For ex-
ample, an employee losing eligibility for group health coverage may be able to enroll
in other group health coverage, such as a spouse’s plan, without waiting until the
next open season for enrollment.
The loss of job-based health coverage is also a Qualifying Event that triggers a
Special Enrollment Period in the Affordable Care Act (ACA) Health Insurance Mar-
ketplace. In general, individuals who have lost their employer coverage have up to
60 days to purchase a marketplace plan after the loss of health coverage. Alter-
natively, an individual may report to the marketplace a future loss of coverage up
to 60 days in advance to avoid a gap in health coverage.
Individuals losing employer-based coverage may also come to the marketplace to
learn if they could qualify for Medicaid or the Children’s Health Insurance Program
(CHIP). Individuals who live in States that use HealthCare.gov will receive con-
firmation that they qualify from their State Medicaid or CHIP agency.
The high costs of plans in the ACA marketplace may limit the attractiveness of
individual market coverage options to people who do not qualify for premium tax
credits or cost sharing reductions. As an alternative, individuals may be able to pur-
chase other coverage, such as a short-term, limited duration insurance policy from
a health insurance issuer in their State.
As specified in the revised COBRA model notices issued by the Department of
Labor on May 1, 2020, Medicare eligible individuals should consider whether there
is an advantage to enrolling in Medicare before, or instead of, electing COBRA.
Finally, individuals who have general questions about any of these health cov-
erage options can contact one of the Department’s benefits advisors at https://
www.dol.gov/agencies/ebsa/about-ebsa/ask-a-question/ask-ebsa or 1–866–444–
3272.
Question. Your Department has led administration efforts to expand the use of
health-care plans that can discriminate against individuals with pre-existing condi-
tions and often do not provide comprehensive coverage for individuals that purchase
them.
Notably, during the midst of this global pandemic my office has heard directly
from Virginia residents and heard too many unfortunate stories about individuals
who have been denied care or left with exorbitant health-care bills, because they
have enrolled in skimpy plans pushed by your Department and this administration.
One of the more egregious stories I have heard is a young man that received care
for COVID and left the hospital with a bill of more than $3,000, because the skimpy
plan he was enrolled in—made more accessible by your department—refused to
cover full cost of his care.
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Could you explain why it makes sense for your department to push these plans
that don’t offer comprehensive coverage and often leave Americans with thousands
of dollars in medical bills when they actually go to seek care?
Answer. The Department has worked to provide Americans with more affordable
options for health-care coverage. STLDI plans, which have existed for decades and
during the previous administration, offer flexible and affordable coverage for Amer-
ican individuals and families. This coverage is more affordable, in part, because it
generally does not cover all of the requirements imposed by the ACA, which raise
prices for consumers. For Americans who cannot afford plans that include all ACA
mandated benefits, access to STLDI plans can serve as a valuable alternative. For
consumers with low expected health care costs, who are ineligible for premium tax
credits and Cost Sharing Reductions in the ACA marketplace, and who choose
STLDI plans, the Congressional Budget Office (CBO) expects that premiums may
be as much as 60-percent lower than the lowest cost plans covering all mandated
benefits.
The purchase of STLDI plans can lead to improved health outcomes and give indi-
viduals greater financial protection from catastrophic health care expenses. Individ-
uals purchasing STLDI plans may also gain broader access to health care providers
than they would have through individual market plans, which may have narrower
provider networks.
Additionally, STLDI plans can serve as an affordable and flexible coverage alter-
native for people who expect a short coverage gap due to job loss. While people who
lose their job may be able to remain on their employer plan for up to 18 months
under COBRA, this typically requires paying the entire premium for coverages up
to 102 percent of the cost to the plan affordable option.
Question. My office has received dozens of complaints about these plans and seen
too many patient stories from around the country.
Has your department tracked these stories or heard similar concerns? Have you
taken any steps to look into them and what should we tell these patients that need
care?
Answer. Because coverage may vary depending on the STLDI plan and any appli-
cable State requirements, consumers should assess their options before selecting a
plan, as with any plan selection. The August 2018 final rule includes an important
consumer protection provision, which seeks to ensure that consumers are aware of
the potential limits of STLDI plans. The provision requires issuers to include an en-
hanced disclosure in the contract and in any application enrollment materials to in-
form consumers that these plans are not subject to the same insurance market regu-
lations as other individual health insurance plans.
The Department has not received any complaints from participants relating to
short-term, limited duration plans. Whereas these plans generally operate within
State regulatory environments, the Department lacks authority to carry out inves-
tigations in the event a complaint is received. When the Department receives com-
plaints that are beyond our jurisdiction, those cases are referred to the appropriate
regulator.
Question. As you know, the CARES Act expanded the safety net for unemployed
and partially unemployed individuals by creating the Pandemic Unemployment As-
sistance (PUA) program for individuals, particularly the self-employed, who are typi-
cally excluded from State unemployment programs.
In Virginia, anecdotal reports throughout the State found that self-employed fam-
ily child care home providers (licensed by the State) who care for unrelated children
in their home were declined for PUA (and therefore, also could not access PEUC).
In a survey on June 13 conducted in Virginia, 14 family child care home providers
who are currently closed reported filing for unemployment, half were rejected for
PUA. Among another 31 family child care home providers who applied for partial
unemployment, 20 (64.5 percent) have been rejected for partial payments. Many oth-
ers reported that they have applied for unemployment, but have yet to hear any-
thing related to their application.
The construct of a self-employed family child care home-based business involves
caring for children whose parents pay weekly or monthly fees. These providers de-
pend on these revenues to pay their operating expenses. If a provider previously
cared for eight children and now cares for two children, they have incurred a signifi-
cant reduction in income related to their self-employment. Because the two children
she cares for may still require her to work 40 hours per week, she has not had a
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reduction in hours, but has incurred a significant decline in income. It is unclear
from the survey responses about a singular reason for rejection of unemployment
claims. For example:
• Some family child care providers were told they earn too much income (above
$158 per week).
• Others report that they were told they did not work sufficient hours in 2019.
• Some were told they worked too many hours currently.
• One reported that the receipt of Social Security benefits was the reason her
application was rejected.
• Many were given no reason for the rejection of their application.
The intent of the CARES Act PUA and related PEUC unemployment provisions
was to offer a safety net for the self-employed, including family child care home pro-
viders.
Can you clarify what technical changes may be needed to the PUA and PEUC pro-
gram to ensure that self-employed family child care home-based providers can ac-
cess either full unemployment benefits (if closed) or partial unemployment com-
pensation (if they have had a significant reduction in income)?
Answer. One of the qualifying conditions for an individual to receive PUA is that
he is unemployed, partially unemployed, or unable or unavailable to work for a
COVID–19 related reason listed in the CARES Act.
The PUA program under the CARES Act is largely modeled after the DUA pro-
gram and relies on the DUA regulatory framework where the CARES Act is silent.
DUA regulations provide that a self-employed individual performing less than the
customary full-time services is considered partially unemployed.
Child care providers in the situation you describe may be considered to be par-
tially unemployed under the DUA regulations. Further, under the eligibility criteria
the Department added pursuant to the authority in CARES Act section
2102(a)(3)(A)(ii)(I)(kk), self-employed workers who have sustained a significant dimi-
nution of their customary full-time services because of COVID–19 may be eligible
for PUA where they are forced to suspend the provision of services, though their
benefit amount may be reduced because of income. The Department’s current guid-
ance affirms that individuals who did not suspend the provision of services, but did
sustain a significant diminution of their customary full time services due to
COVID19, may be eligible for PUA. Additional guidance specific to childcare pro-
viders is expected shortly.
Question. Can guidance be given to State labor agencies, or are technical correc-
tions necessary to ensure that self-employed home-based child care providers can ac-
cess unemployment compensation as intended?
Answer. The Department plans to issue clarifying guidance to States on this mat-
ter shortly.
QUESTIONS SUBMITTED BY HON. SHELDON WHITEHOUSE
Question. Rhode Island has worked very hard to implement the Federal unem-
ployment measures included in the CARES Act, which have provided many of our
constituents with a lifeline during this crisis. While DOL has provided States with
some assistance to help set up new systems and effectively administer benefits,
more help to States is needed for training, technology, and other costs associated
with the new Federal policies and high demand for benefits. Additionally, the
COVID–19 pandemic has also cast a light on much needed technology upgrades for
State unemployment systems.
What is DOL doing to help ensure States like Rhode Island continue to receive
assistance that ensures benefits continue to be delivered in a timely manner?
Answer. The Department will continue to vigorously support States as they work
to effectively distribute benefits provided under the CARES Act. The Department
has provided technical assistance to States through guidance, Questions and An-
swers, webinars, and one-on-one interactions. The Department has also connected
States with other resources, such as the Department-funded UI Integrity Center
and UI Information Technology Support Center. Additionally, the Department’s
Chief Information Officer has offered direct IT assistance to States and facilitated
connections with other IT resources, including the U.S. Digital Service.
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The Department collaborated with the U.S. Digital Service and the UI Informa-
tion Technology Support Center, which is operated by the NASWA in a partnership
with, and funding from, the Department, to host a call with the States on July 7,
2020, that focused specifically on innovative State practices that improve workload
management in order to enable timely benefit payments.
Further, I have communicated directly with Governor Raimondo on several occa-
sions concerning UI, and my staff have also worked with the Governor’s staff to as-
sist the State.
Question. What are DOL’s long-term plans to upgrade State unemployment sys-
tems?
Answer. The Department recognizes the need to modernize State UI IT systems.
The COVID–19 pandemic has highlighted the unreliablity of State UI IT systems—
something the Department worked to educate Congress about during the drafting
of the CARES Act. The UI program is structured as a Federal-State partnership
based on Federal law but administered by States under State law. This structure
makes the program unique among the country’s benefit programs in that States
have significant flexibility to establish eligibility provisions, benefit duration and
levels, and taxing structures to pay for benefits.
While State flexibility is important, this structure and the variance in State laws
and processes make it more difficult to develop efficient administrative processes
and to implement technologies that will work across the 53 different States and ter-
ritories operating UI programs.
The Department believes there is opportunity for modernization across States and
would welcome the opportunity to work with Congress and States to that end.
Question. Will you commit to providing additional assistance to State unemploy-
ment systems for immediate and long-term needs?
Answer. The Department is available to work with Congress and States on strate-
gies to ensure States have the tools, resources, and funding necessary to administer
their UI programs.
Question. Has DOL identified and shared successful implementation and adminis-
tration practices among States?
Answer. The Department provides funding for, and partners with, the UI Infor-
mation Technology Support Center operated by NASWA. The Center provides infor-
mation, technical assistance, products, and tools to States to support the moderniza-
tion of their systems and development of technology solutions generally; it also
shares best practices. In addition, the Department hosts a UI Community of Prac-
tice, a collaborative group designed to share best practices and resources to help
States improve UI operations.
The Department also funds and partners with the NASWA UI Integrity Center,
which provides a wide range of resources to help States improve program integrity
and prevent and detect improper and fraudulent payments. Through the UI Integ-
rity Center, States have shared best practices for processing the unprecedented
number of claims received during the pandemic. These best practices have included
the implementation of front-end portals for claimants and staff; the enhancement
of infrastructure to increase online UI system capacity; backend systems to auto-
file and process claims for benefits based on eligibility conditions; the implementa-
tion of a mobile-friendly site for initial applications, for employer submission for
large layoffs, and for hosting a chat box for Frequently Asked Questions; the up-
grade of existing systems, such as processors and content delivery systems; and the
transition of existing systems to a cloud environment in order to enhance system
capacity and improve claims processing.
Question. Rhode Island is one of several States which has been targeted by mali-
cious actors for a massive unemployment fraud scheme.
What could DOL and States have done proactively to prevent the widespread
fraud we have seen from organized crime rings?
Answer. The Department had been vigorously addressing fraud in the UI system
prior to the COVID–19 pandemic. The incentive to fraudulently obtain benefits
under CARES Act programs was significantly increased by two factors. First, the
relative value of benefits received was greatly increased by the Federal Pandemic
Unemployment Compensation benefits—the $600 weekly plus-up. Second, the stat-
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ute relies on self-attestation by PUA claimants regarding their unemployment sta-
tus and the COVID–19 eligibility criteria, increasing the risk of fraud.
The Department funds and partners with the UI Integrity Center operated by the
National Association of State Workforce Agencies. The Center provides technical as-
sistance and tools to States to support UI program integrity and the prevention, de-
tection, and recovery of UI improper and fraudulent payments. Among the tools and
resources available to States are a robust suite of training modules for State staff
on conducting fraud investigations and a UI Integrity Data Hub (IDH). These tools
have been valuable for States during the COVID–19 pandemic.
The IDH is a multi-State data tool that allows participating UI agencies to cross-
match UI claims against a database associated with potentially fraudulent claims
or overpayments. The resources available through the IDH include: a suspicious
actor repository to enable States to submit known fraud data elements that will en-
able the States to cross-match those elements to detect multi-State fraud; suspicious
IP addresses; multi-State claims data; a fraud alert system that allows States to im-
mediately share information through the secure IDH environment on newly identi-
fied fraud schemes/activities in their States (this capability allows States to receive
and review information on these fraud schemes and to receive updates to improve
awareness across the community); and in July 2020, it will include an identity
verification solution for use by all States to determine identity when a claim is first
filed.
The Integrity Center also hosts weekly calls to allow States to share their experi-
ences with fraud activities and fraud prevention strategies.
Question. What is DOL doing to recover improper payments that were made as
a result of the fraudulent schemes recently uncovered? Are States being provided
with help to recover funds?
Answer. The Department issued guidance to States regarding UI program integ-
rity requirements, including processes that assist in the recovery of overpayments.
Additionally, States are working with the Department’s Office of Inspector General,
as well as local, State, and Federal law enforcement, as part of their recovery ef-
forts.
The recovery practices States use for UI payments also apply to the CARES Act’s
UI programs. These practices include offsetting future benefits and intercepting
Federal tax returns. States are also strongly encouraged, where allowed by law, to
intercept State tax returns, garnish wages, and pursue civil actions and property
liens.
In addition, the Department funds and partners with the UI Integrity Center, op-
erated by NASWA. The Center provides technical assistance and tools to States to
support UI program integrity and prevention, detection, and recovery of UI im-
proper and fraudulent payments, as described above.
Question. Would improving Federal and State Government cybersecurity infra-
structure have helped identify these bad actors ahead of time?
Answer. Improving Federal-State UI cybersecurity infrastructure is critical. Hack-
ers and other sophisticated cyber actors can exploit information technology vulner-
abilities to steal information and money, and to threaten, disrupt, and destroy the
delivery of essential services. Stolen information from Federal and State systems,
such as personally identifiable information, is often used by fraudsters in claiming
UI and similar benefits. However, an improved cybersecurity infrastructure is not
sufficient to guard against criminals’ penetration of the UI system. Nor will it pre-
vent a fraudulent claim from being filed or identify bad actors ahead of time. Iden-
tity verification and other sophisticated data analytics and cross-matching tools in-
tegrated into the benefits claim process, coupled with prompt investigation of sus-
picious cross-match hits, would help identify fraud early in the claims cycle and pre-
vent the payment of fraudulent claims.
In its Fiscal Year 2021 budget request—as well as in prior budget requests—the
Department has proposed a package of UI program integrity-related legislation to
increase the tools and resources available to the Department and States to address
improper payments and fraud, including a provision that would require States to
use the IDH.
Question. To what degree did outdated State unemployment systems play in the
fraudsters’ ability to scam the programs?
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Answer. States are heavily dependent on IT to carry out their UI operations.
States with obsolete systems can struggle to make modifications, integrate modern
tools, and improve data analytics capacity that would combat fraud. These chal-
lenges have increased the risk of improper payments and fraud and underscore the
need for modernization of State UI IT infrastructure.
Question. The CARES Act provided temporary expansions to unemployment bene-
fits including a $600 weekly boost, 13 additional weeks of benefits, and the inclusion
of workers who wouldn’t normally be eligible for benefits, such as independent con-
tractors. These benefits have helped many families pay their bills and keep a roof
over their heads during this difficult time.
Do you agree that the expanded unemployment benefits have served an important
role in helping families and the economy?
Answer. Congress passed the CARES Act as the U.S. economy was shutting down.
The $600 weekly payment was an important, extraordinary measure to support
workers who in many instances were being prohibited from earning a living as a
result of necessary public health measures put in place by States and locales. A
study by the University of Chicago indicates that more than two-thirds of workers
receiving benefits under the CARES Act have seen their wages replaced at rates
above 100 percent, with some low-wage workers experiencing replacement rates
above 200 percent (https://bfi.uchicago.edu/workingpaper/2020-62/). The Congres-
sional Budget Office, in response to a query by Chairman Grassley, has reported
that if the $600 plus up were continued past July, five-sixths of the covered workers
would receive higher payments through unemployment than by working, resulting
in a more elevated unemployment rate than would occur otherwise. Given these cir-
cumstances, Congress’s decision to sunset the $600 plus-up at the end of the month
was appropriate. Unemployment benefits will continue to be important after July,
but as the economy reopens and jobs return, it will be appropriate to take a dif-
ferent approach than taken in March as the economy was closing. The Department
is available to work with Congress to fashion the approach that best support work-
ers and economic growth.
Question. What are the administration’s unemployment projections for the months
and years ahead? How did you arrive at those projections?
Answer. The Department does not project data on unemployment or the unem-
ployment rate.
Question. What is DOL doing to prepare for a potential second wave of COVID–
19 that could once again force business closures and spikes in the unemployment
rate?
Answer. As States reopen their economies and workers return to their jobs, con-
tinual consideration should be given to policies that support workers on the job as
well as those who have not yet been able to return to work. The Department is
available to work with Congress on potential strategies to this end.
Workplace safety is a top priority for the Department. Since the beginning of the
pandemic, OSHA has issued extensive guidance to enable workplaces to operate
safely under the current circumstances. As of August 4th, OSHA has published 19
industry-specific guidance documents, general return to work guidance, and 12 in-
dustry specific alerts. OSHA has published two safety posters that have been trans-
lated into at least 14 languages. OSHA also has created and posted nine short, user-
friendly videos highlighting safety tips. The video on respirator usage received more
than 58,000 views.
QUESTIONS SUBMITTED BY HON. CATHERINE CORTEZ MASTO
FINANCIAL BURDENS AND FRAUD
Question. Nevada currently has the country’s highest unemployment rate, at near-
ly one-third of its workforce, and has a high percentage of gig workers and inde-
pendent contractors. Many people who are not covered by UI in Nevada and other
States have voiced grievances about long wait times, lack of transparency, and per-
petual changes to the date of payment when filing claims with PUA. Costs to imple-
ment PUA and other new programs under the CARES Act have been particularly
challenging for Nevada. Our State has had to stand up an entirely separate infra-
structure to manage the work, including both staff and technology.
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Given these new costs for Nevada and other States—on top of significant costs
associated with processing record numbers of unemployment claims—is the Federal
Government doing enough to ensure that all State costs are being covered and to
ensure that States are not saddled with additional financial burdens? What more
can the Department do?
Answer. The Department worked swiftly to distribute the $1 billion in funds made
available under FFCRA to support States administration of regular UI programs.
This funding helped States manage the extraordinary workload caused by the pan-
demic by enabling them to ramp up staffing and call centers, and to improve tech-
nology systems.
The UI programs created by the CARES Act are fully federally funded. Congress
appropriated ‘‘such sums as necessary’’ to support the implementation and adminis-
tration of the CARES Act programs and all States are able to submit related imple-
mentation costs as Supplemental Budget Requests (SBRs) to the Department for re-
view and approval. This SBR funding can include technology costs and other start-
up support for PUA implementation. States will also receive ongoing administrative
funding based on workload.
Question. Is the U.S. Department of Labor providing the guidance necessary to
combat fraud occurring in the PUA program across multiple States and is increasing
costs for States?
Answer. The Department has issued three fraud or program integrity-related Un-
employment Insurance Program Letters (UIPLs) to States:
• UIPL 16–20, Coronavirus Aid, Relief, and Economic Security (CARES) Act of
2020—Pandemic Unemployment Assistance (PUA) Program Operating, Fi-
nancial, and Reporting Instructions.
• UIPL 16–20, Change 1, Coronavirus Aid, Relief, and Economic Security
(CARES) Act of 2020—Pandemic Unemployment Assistance (PUA) Program
Reporting Instructions and Questions and Answers.
• UIPL 23–20, Program Integrity for the Unemployment Insurance (UI) Pro-
gram and the UI Programs Authorized by the Coronavirus Aid, Relief, and
Economic Security (CARES) Act of 2020—Federal Pandemic Unemployment
Compensation (FPUC), Pandemic Unemployment Assistance (PUA), and Pan-
demic Emergency Unemployment Compensation (PEUC) Programs.
In addition, most of the 19 COVID-related UIPLs issued between March 12th and
June 15, 2020 include UI program integrity guidance.
The Department is vigorously working with States, the Department’s OIG, and
law enforcement to combat the increase in fraud resulting, in part, from the added
benefits provided under the CARES Act and the significant increase in volume of
claims. As professional criminals and fraudsters have targeted State UI systems,
the Department has required States to implement for the CARES Act programs the
same mandatory program integrity tools used for the regular UI program.
MISCLASSIFIED WORKERS
Question. As you know, the misclassification of independent contractors does not
end at ‘‘gig workers’’ alone. There are countless workers in Nevada—entertainers,
stage crew, promoters, and more—who all make a place like Las Vegas the capital
of entertainment for visitors from around the world. They have all of the schedules,
duties, and obligations of a W–2 wage employee, but none of the critical protections
necessary in the current economic climate. I have heard from countless Nevadans
who hear that the tourism and entertainment economy will take the longest to re-
cover and who worry about what they can do to provide for their families when the
emergency aid goes away and the crisis still endures for them.
Do you agree that particular hardest hit industries or sectors of our economy like,
those in Nevada, justify extending PUA? What would you recommend to Congress
do to account for hardest hit industries and States?
Answer. Some industries and sectors have been hit harder than others by the eco-
nomic downturn. As the economy reopens, the Department’s existing programs ad-
ministered by the Employment and Training Administration will provide high-qual-
ity job training, employment, labor market information, and income maintenance
services through State and local workforce development systems to all workers, in-
cluding those in particularly hard-hit industries. The Department appreciates that
certain industries and locales have been more seriously affected then others and is
available to work with Congress on potential strategies.
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Question. Would you seek to change the criteria for those who are deemed eligible
for PUA change if the program is extended?
Answer. As the United States reopens and workers return to their jobs, policies
that encourage workers to return to their jobs will be important, as will be contin-
ued support for those who have not yet been able to return to work. The Depart-
ment is available to work with Congress on potential strategies to support workers.
Question. What will you do to address the long-term issues raised by misclas-
sification of workers and ensure that those misclassified employees who remain out
of work will still be able to provide for their families?
Answer. Employers must comply with all applicable laws and regulations regard-
ing the classification of employees and other workers. The Department continues to
provides compliance guidance to help ensure that workers are accurately classified,
and brings enforcement actions where misclassification has resulted in a failure to
pay federally mandated wages. At the same time, the Department recognizes that
there are a variety of circumstances where workers are appropriately recognized as
independent contractors. The Department recently updated its joint employer rule,
and is currently examining the proper definition of independent contractor under
the FLSA.
The Department’s Wage and Hour Division (WHD) builds and maintains relation-
ships with State and Federal agencies to foster communication and better serve the
Nation’s workers and businesses. WHD has memorandums of understanding
(MOUs) with States concerning the various laws enforced by the Division, including
laws concerning misclassification. WHD’s relationships with State and Federal
agencies allow for data sharing, referrals, coordinated enforcement, joint outreach,
and compliance assistance while maximizing the Department’s effectiveness in help-
ing businesses and workers.
With respect to the UI program specifically, State UI agencies are responsible for
determining if workers are classified correctly for purposes of eligibility for unem-
ployment benefits. The tests used to determine if a worker is an employee or inde-
pendent contractor vary according to State law.
CLASSIFICATION OF PUA WORKERS
Question. Many gig workers are misclassified as independent contractors under
State and Federal laws. Many of these workers are receiving PUA benefits, and
some are receiving UI benefits as employees under their State laws. Senator Brown
and I, along with several of our Senate colleagues, wrote you a letter June 8, 2020
asking you to clarify that States are able to provide traditional UI or PUA benefits
depending on their State classification of these workers, rather than presumptively
rushing to judgement and providing PUA alone.
Is it the case that many ‘‘gig workers’’ should qualify for regular State UI where
their States allow?
Should States be applying their own laws to determine whether those workers are
eligible for State UI?
Answer. Whether ‘‘gig workers’’ are covered by a State’s UI program depends on
State law and the particular circumstances of the worker. State UI agencies are re-
sponsible for determining if workers are properly classified for purposes of eligibility
for unemployment benefits. The tests used to determine if a worker is an employee
or independent contractor vary according to State law. The particular circumstances
of ‘‘gig workers’’ can also vary greatly from worker to worker. The Department will
continue to work with the States to ensure that workers are accurately classified
under each respective body of law.
In addition, the Department exercised its authority under the CARES Act to add
a category of PUA eligibility for ‘‘gig workers’’ and other self-employed individuals.
UI Program Letter 16–20—Coronavirus Aid, Relief, and Economic Security (CARES)
Act of 2020—Pandemic Unemployment Assistance (PUA) Program Operating, Fi-
nancial, and Reporting Instructions (https://wdr.doleta.gov/directives/corr_doc.cfm?
DOCN=4628). If a ‘‘gig worker’’ is ineligible for regular UI benefits, PUA may be
available so long as the individual meets the program requirements. PUA is avail-
able to individuals not eligible for regular UI benefits and who self-certify as being
able and available for work, but unable to work because of the COVID–19 pandemic.
Accordingly, a ‘‘gig worker’’ who is not eligible for regular UI benefits may be able
to receive PUA benefits if she meets this eligibility requirement.
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Question. Will the Department put out guidance making it clear that, even if
workers are receiving PUA benefits, it has no bearing on any misclassification
claim?
Answer. PUA benefits are available to individuals who are ineligible for regular
UI benefits and are unemployed, have reduced employment, or are unable or un-
available to work due to the specific COVID19 reasons identified in the CARES Act
and the Department’s guidance. The classification of a worker as an independent
contractor is only relevant to the extent that independent contractors are tradition-
ally not eligible for UI benefits. However, classification of a worker by a State UI
agency is a matter of State law and the particular circumstances of that worker.
Question. What should States do to get benefits into the hands of workers quickly,
when a complete investigation is frustrated by app companies’ failures to produce
wage records?
Answer. Under the PUA program, if a claimant is unable to immediately produce
documentation of his prior income, he is eligible to receive the minimum payment
until documentation is produced that establishes a weekly PUA benefit amount ex-
ceeding the minimum. States have broad flexibility as to the types of documentation
that can support of the claimant’s weekly benefit amount. The failure of an app
company or other contractor to respond within the allotted timeframe should not
interfere with the eligibility determination.
REDUCING WAIT TIMES
Question. I have joined my colleagues in calling for more robust and targeted
funding for the Department of Labor’s programs and ask the Department do all it
can to expedite providing meaningful tools and support to States to serve Americans
in need. The number one issue I hear from my neighbors struggling back home is
the length of time to sign up, receive payments, or reach anyone on the phone to
seek relief.
Will you commit to preparing a plan to request and dedicate targeted funds for
IT, training, and the staff support necessary to help meet the challenges of pro-
viding critical aid to those out of work when they need it most?
Answer. The Department moved expeditiously following the passage of FFCRA to
distribute the $1 billion in administrative funding made available to the States.
These funds helped States ramp up their staffing and improve information tech-
nology systems to better handle the extraordinary increase in workload caused by
the pandemic. In addition, the Department made funding quickly available to States
through Supplemental Budget Requests to enable States to fund the technology
needed to implement the CARES Act’s UI programs.
The Department recognizes the need to modernize State UI IT systems.
The COVID–19 pandemic has highlighted the unreliablity of State UI IT sys-
tems—something the Department worked to educate Congress about during the
drafting of the CARES Act. The UI program is structured as a Federal-State part-
nership based on Federal law but administered by States under State law. This
structure makes the program unique among the country’s benefit programs in that
States have significant flexibility to establish eligibility provisions, benefit duration
and levels, and taxing structures to pay for benefits.
While State flexibility is important, this structure and the variance in State laws
and processes make it more difficult to develop efficient administrative processes
and to implement technologies that will work across the 53 different States and ter-
ritories operating UI programs.
The Department believes there is opportunity for modernization across States and
would welcome the opportunity to work with Congress and States to that end.
Question. Has a historic lack of support and funding for DOL worsened State
agencies ability to adequately respond to this crisis? How can the Department
bridge this gap?
Answer. The administrative funding model for the regular UI program creates a
particular challenge for States because the disbursement of the additional funding
needed to cover increases in workload arrives after the actual increase in work.
States report workload and receive additional funding on a quarterly basis if their
workload exceeds what was projected for base-level funding. Thus, low workloads re-
sult in low administrative funding, and due to the low unemployment rate prior to
the COVID–19 pandemic, State staffing and funding levels were reduced, which
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negatively affected the modernization of information technology systems and other
infrastructure, such as call center operations. The Department is available to work
with Congress to identify potential reforms.
SUPPLEMENTING STATE BUDGETS
Question. Many States, including Nevada, have had major holes blown in their
State budgets in the process of reacting to the COVID–19 crisis. Nevada in par-
ticular, a State that heavily relies on gaming for tax revenue, saw a 99.6-percent
decrease in gaming revenue in the month of April. Tax revenue helps pay the sala-
ries of first responders, public servants, and health-care workers. There is currently
debate if Federal funds should be used to supplement State budgets.
What will be the effect on unemployment nationally, if the Federal Government
does not allow supplementation of State budgets with Federal funds?
Answer. The Department does not project data on unemployment or the unem-
ployment rate.
COMBATING FRAUD
Question. The Department of Employment, Training, and Rehabilitation, which is
tasked with administering unemployment in my State, has reported unprecedented
amounts of fraudulent claims tying up and delaying the process of getting vital re-
lief to those who legitimately need relief now.
What best practices have you seen implemented by States to better authenticate
applicants and what solutions do you recommend to help verify the income of non-
traditional W–2 wage earners income eligibility? How is the Department providing
technical assistance to States?
Answer. The vast majority of States use the Social Security Administration Cross-
match provided through the Department-funded ICON to conduct identity verifi-
cation. Many States also cross-match with their departments of motor vehicles or
State vital statistics records for identity verification. Prior to the COVID–19 pan-
demic, the Department funded the implementation of Identity Verification services
through the UI Integrity Center’s Integrity Data Hub. The testing of Identification
Verification Services (IDV) services is underway, and the NASWA is soliciting
States to serve as early adopters for use of this dataset.
To provide technical assistance to States, the Department funds and partners
with the NASWA-operated UI Integrity Center, which offers States guidance and
tools to support UI program integrity and prevention, detection, and recovery of im-
proper or fraudulent UI payments.
Question. Would addressing the instances of misclassification of certain contrac-
tors and workers across the country would better track and get those eligible in-
vested into the system, thus better protecting the Federal Government and States
against fraud and abuse?
Answer. State UI agencies are responsible for determining if workers are mis-
classified for purposes of determining eligibility for unemployment benefits. State UI
laws vary in the tests they use to determine if a worker is an employee or inde-
pendent contractor, but their tests align with the common law test used by the In-
ternal Revenue Service. The Department will continue to work with States to ad-
dress this issue.
IMPACT ON DOMESTIC VIOLENCE SURVIVORS
Question. How is the Department working or could it work with States and other
stakeholders to ensure survivors of domestic violence, sexual assault and trafficking,
and stalking to be aware of their potential eligibility unemployment benefits?
Answer. Many State laws already have provisions that provide unemployment
benefits for individuals who become unemployed as a result of domestic violence,
sexual assault and trafficking, and stalking. On April 27, 2020, the Department
issued guidance on Unemployment Insurance programs created by the CARES Act.
UI Program Letter 14–20, Coronavirus Aid, Relief, and Economic Security (CARES)
Act of 2020—Summary of Key UI Provisions and Guidance Regarding Temporary
Emergency State Staffing Flexibility (https://wdr.doleta.gov/directives/corr_
doc.cfm?DOCN=3390). The guidance provides that if an individual is ineligible for
regular unemployment compensation and is prevented from teleworking due to do-
mestic violence, sexual violence, or stalking, the individual may be eligible for PUA.
This determination, however, will depend on whether the individual is unemployed
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because of one of the COVID–19-related reasons provided in the CARES Act and
the Department’s guidance. The Department continues to work with States to en-
sure awareness of these provisions.
PREPARED STATEMENT OF BETH TOWNSEND,
DIRECTOR, IOWA WORKFORCE DEVELOPMENT
Thank you, Chairman Grassley, for the opportunity to share with you a ‘‘boots on
the ground’’ view of the impact of the COVID–19 pandemic on a State workforce
agency, charged with implementing the unemployment programs created in the
CARES Act as well as processing traditional unemployment claims caused by wide-
spread layoffs due to the COVID–19 pandemic. I want to preface my remarks by
stating that I am woefully inadequate to sufficiently describe the Herculean efforts
of every member of Team IWD to accomplish everything they have over the last
three months. They have been on the front line of Iowa’s response to the pandemic
assisting hundreds of thousands of their fellow citizens and have unfailingly dem-
onstrated a truly inspiring level of dedication, professionalism, empathy and kind-
ness for the people of Iowa who lost their jobs due to the pandemic. I am so very
proud of their efforts and have witnessed firsthand the difference they are making
in the lives of Iowans as they help them navigate the pandemic and the impact it
has had on our lives.
To begin, it should be noted that Iowa has one of the more generous unemploy-
ment benefit programs in the country. We provide 26 weeks of benefits per year and
our range of payments are from $87 to $591 per week, depending on wages and the
number of dependents. The maximum rates by dependents are as follows: 0 depend-
ents—up to $481; 1 dependent—up to $500; 2 dependents—up to $518; 3 depend-
ents—up to $545; and 4 dependents—up to $591.
Some Iowans could qualify for a maximum of 52 weeks of unemployment from the
beginning of the pandemic based on the CARES Act provisions and the fact Iowa
has triggered extended benefits for the first time since 1983.
To present the impact of the pandemic in its proper context, I want to first share
some numbers from the week before the pandemic really hit Iowa. For the week
ending March 14th we received 2,229 initial UI claims and 27,816 continuing week-
ly UI claims, which is consistent with our sustained low unemployment. We received
an average of 800 calls per day, for a total of 4,155 received that week. We handled
all but 13 calls for a call abandonment rate of 0.31 percent with an average wait
time of 9 seconds. In the two weeks before the pandemic, we paid approximately
$12 million each week in unemployment benefits and paid a total of $129 million
in benefits year to date.
In response to community spread in the State, Governor Reynolds issued an exec-
utive order on March 17th that closed many of Iowa’s businesses and overnight,
tens of thousands of Iowans were laid off or unemployed. Immediately, the citizens
of Iowa had questions and turned to IWD for information and support.
We immediately saw a significant increase in call volume, going from 800 calls
a day to over 13,000 calls a day the week of March 20th, or over 16 times our nor-
mal level. Our daily claims numbers increased six fold from just over 2,000 to over
12,000 on March 17th.
On March 30th, the first business day after the CARES Act was signed into law,
our call volume increased to 28,000 calls (35 times more). We also had our highest
daily volume of claims received at over 16,000 (compared to an average of 400–500
per day pre-pandemic).
Iowa had the benefit of watching other states see marked increases in their claims
numbers and customer assistance requests, so we had some lead time to prepare
for the tidal wave we could see coming. I believe several things contributed signifi-
cantly to the effectiveness of our response early on.
First, the management of our Trust Fund since the 2008 recession has provided
Iowa with greater policymaking flexibility throughout the crisis. We used data and
modeling from our Labor Market Information division to make strategic decisions
including: not charging contributing or reimbursable employers with current unem-
ployment tax charges; delaying many employees from filing claims in the first 2
weeks by requiring they use paid leave before filing unemployment claims, which
was terminated after the passage of the CARES Act; and waiving work search re-
quirements for claimants.
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Second, we recognized there would be a need for strong, on-going and regularly
updated communication with our stakeholders including claimants, employers, legis-
lators, the Governor’s team and other workforce partners. We wanted a dynamic
web page that we could use to provide constant updates. The importance of this be-
came even more apparent when we saw the dramatic increase in traffic on our
website and with social media.
We created a specific COVID–19 tab on our website which is regularly updated.
We utilized website banners, customer service line messages, news releases, social
media and conducted webinars for claimants and employers in English and Spanish
to keep customers informed. We made ourselves available for radio, TV, and news-
print interviews. Recognizing that most people filing now have never filed unem-
ployment claims, we created step-by-step videos for how to file UI claims, including
how to use a new portal to upload documents. We set up an email box to reach indi-
viduals who could not get through on the phone lines and our team attempts to
clean out this email box each day. We continue to update FAQs for common ques-
tions received from various stakeholders as well as posting updated OSHA guide-
lines. In short, we used every available method to communicate with Iowans, and
we continue to do so.
Importantly, we have also worked hard to provide access to our services for non-
English speaking claimants. This included posting important documents in nine dif-
ferent languages, which included the CARES Act information and FAQs. Our cus-
tomer call center has access to a translation service to provide real time assistance
to individuals when they call in. We have also worked closely with refugee agencies
and faith based groups to provide assistance to non-English speaking claimants.
Beginning in mid-March, we redeployed almost our entire staff to work on unem-
ployment claims and customer service. We conducted fast tracked training for over
200 agency employees to assist in handling customer service calls and emails and
provided access to subject matter experts who could provide assistance on more com-
plex issues. We hired and trained over 90 temporary employees to handle customer
service calls. We recruited volunteers from other State agencies to be trained to
work in our call center. To date, we have trained 53 employees from 6 agencies who
worked full- and part-time in customer service, doing data entry, or helping with
appeals. Our ability to quickly redirect and train our employees to support an ‘‘all
hands’’ effort to process and pay UI claims was critical and cannot be overempha-
sized.
Additional critical decisions and efforts included the following. One of our IT staff
created a portal that allowed us to track, in real time, the number of UI claims re-
ceived. We instituted mandatory overtime, including weekends, for claims proc-
essing and answering customer service emails. Pursuant to Governor Reynold’s ex-
ecutive order, we expanded the number of team members that are eligible for over-
time compensation to include exempt employees who are getting paid straight time
over 40 hours a week. The table below shows the amount of overtime worked by
over 400 IWD staff members.
Given the nature of the pandemic, an early consideration was the health and safe-
ty of our workforce. In early March we identified workers to telework and acquired
additional equipment to be able to support a move to teleworking by a majority of
our staff. We surveyed staff to determine who could work from home, who had nec-
essary internet at home and who needed additional equipment. The survey also in-
cluded who could/would work from home, including whether school or daycare clo-
sures impacted that answer. Our IT team distributed and tested equipment from
home to insure it would work as needed.
It is also important to note that, like many States, IWD uses a legacy system de-
veloped in 1972 to process all UI claims. Fortunately, we were able to make techno-
logical upgrades that expanded the hours of the mainframe system each day to
allow staff the ability to work on claims for an additional 2 hours per day. These
upgrades also increased the server capacity to process claims, increased the avail-
ability of our website and supported overnight and weekend batch processing to
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issue payments faster to Iowans. Even before this pandemic, Iowa recognized the
need to modernize its UI system, and we are in the process of doing so. This mod-
ernization is critical for the future and will be absolutely essential if we ever again
face a situation similar to COVID–19. Despite operating a legacy system, Iowa has
been able to successfully implement three unemployment benefit programs created
by the CARES Act in just 8 weeks.
The following charts show the amount of UI benefits paid and claim numbers by
program since March 16, 2020.
Now that the State has begun to reopen, we are asking where do we go from here
and what does our agency look like? How do we help Iowans get back to work, how
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do we help upskill Iowans who have lost their jobs permanently and how do we help
employers find the necessary workforce?
As Iowa is reopening and employers are recalling workers, one thing has become
abundantly clear. We need to incentivize people to return to work. When our gen-
erous State benefits are combined with the Federal Pandemic Unemployment Com-
pensation (FPUC) benefit of $600 per week, 79 percent of Iowans who have received
unemployment since March 15th, have made more on unemployment than their av-
erage weekly wage. This is not because we have low wages in Iowa. In 2018, the
median household income was almost $60,000. It is instead, based primarily on
where we are seeing the largest impact of the pandemic—our lowest paying indus-
tries such as the hospitality and retail industries.
Not surprisingly, we have seen an increase in the number of employers notifying
us that employees are refusing to return to work after being recalled. So far we have
received over 3,000 such notifications. These reports all require a fact-finding inter-
view to determine if the employee has a COVID–19 related reason for not returning
which could include being in the high risk group, lack of child care or no access to
transportation to get to work. While these individuals would most likely be deter-
mined not to be ‘‘able and available for work’’ and thus disqualified from regular
unemployment benefits, they would nonetheless qualify for Pandemic Unemploy-
ment Assistance (PUA) claims. We are currently working on the process that would
allow us to transition individuals to the PUA benefit program immediately after the
fact-finding interview.
Iowa State law also provides that employees who believe their workplace to be
unsafe, can quit their jobs and still receive unemployment benefits. In the pan-
demic, this might occur if the employer is not taking the necessary steps to protect
the employee from the spread of the virus. From everything I have seen, employers
are taking necessary steps to protect their employee and customers, to prevent expo-
sure and the spread of the disease within the workplace, as to not do so would be
counter-productive to trying to reopen their business. These cases, however, have to
be reviewed on a case by case basis and we have strongly encouraged open commu-
nication as the first step in helping employers and employees determine when, how
and who can be returned to work safely.
Throughout the pandemic we have worked closely with the Iowa Business Coun-
cil, the Iowa Association of Business and Industry, State wide chamber alliances,
economic developers and the Iowa Economic Development Authority (IEDA) to share
information and gather input from our employers. We have distributed two surveys
to Iowa’s employers, more than 75,000, for IEDA to determine needs, challenges and
areas where the State of Iowa can assist. Additionally, Governor Reynolds has been
in constant contact with employers of all sizes and industries throughout the pan-
demic.
One program we have been utilizing and promoting is the Voluntary Shared Work
(VSW) program, otherwise known as short-time compensation. The program is in-
tended to provide an alternative for businesses who would otherwise be forced to
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undergo layoffs due to slowdowns in business. VSW permits employers to reduce
employees’ weekly hours and partially replaces lost earnings with unemployment in-
surance benefits. In this way, employers are able to retain their employees and con-
tinue to function even while experiencing a decline in business and revenue. By
avoiding layoffs, employees stay connected to their jobs and benefits while employ-
ers maintains their skilled workforce.
Employers submit a VSW plan to Iowa Workforce Development, outlining the
number of weeks they wish to engage in a VSW plan, and the percentage of the
reduction in hours for their employees. The employees then receive that percentage
of regular UI benefits equal to their work hour reduction. After VSW plan approval,
the employer submits the applications for the employees and a weekly list of all the
employees in the program, and Iowa will issue payment to those employees. Em-
ployees are also eligible for the additional $600 FPUC payment.
Prior to the pandemic, Iowa had fewer than 10 participating employers, com-
prising approximately 800 employees. As of June 5, 2020, Iowa has 183 partici-
pating employers and 8,465 employees. Typical participants include employers in
the healthcare, retail and manufacturing sectors.
When talking with employers, across industries and around the State, the most
consistent message we have received loud and clear is that extension of the FPUC
benefits would have a significant and substantial adverse impact on our employers’
abilities to find an available workforce. FPUC puts employers in a very difficult po-
sition of being asked by their employees to either delay recalling them or to recall
them on a part time basis only so that claimants can continue to draw the addi-
tional benefits through the end of July. Allowing FPUC benefits to expire at the end
of July, would provide incentive to individuals to return to work on a full time basis
and an extension, we fear, would delay a robust reopening in the shortest time pos-
sible. Further, given the length of time and the amount of benefits we provide to
Iowans, we know the short term impact of unemployment, especially as the class
of individuals most affected by the pandemic, will be offset through programs like
PUA, PEUC and extended benefits until at least the end of the calendar year.
As you know firsthand, Senator Grassley, Iowans are hard workers and we have
traditionally had one of the highest labor participation rates in the country. In Jan-
uary and February 2020, our labor participation rate was 71 percent. Even when
our unemployment rate hit 10.2 percent in April, the highest in recorded history,
our labor participation rate was 69.2 percent. It is nonetheless difficult for our Iowa
employers to compete with the amount of benefits currently being paid to individ-
uals to stay home. And while there was a reason to have those benefits when the
bill was passed because we needed to crush the curve, now is the time to get people
back to work. Those who are still unable to go to work because of a medical condi-
tion, being in the high risk category, not having child care or transportation will
continue to be eligible for our generous benefits through the PUA, PEUC and ex-
tended benefits.
In the alternative, if FPUC benefits are extended, I urge you to craft legislation
that is not ‘‘one size fits all.’’ I know $600 a week in benefits in Iowa goes much
further than it does in a major metropolitan area or coastal states where the cost
of living is substantially higher. I have seen recommendations that would tie the
availability of the benefits to a State’s unemployment rate so that once a State falls
below the rate, the benefits would end. Or consider a significantly reduced flat rate
for a short period of time that would cover a transition period for the few months
after July. These alternatives would provide a continued safety net in areas where
recovery is slower and not be a drag on the available workforce in states that are
reopening more quickly.
Something that has not been talked about is the consequence of the additional
benefits to claimants if they decline to return to work. If it is determined they did
not have a good reason to refuse to return to work and are not entitled to benefits
after the date of the recall, they can accrue significant debt in the form of overpay-
ments. Depending on the program they are being paid from, future unemployment
benefits will be offset against the debt until it is repaid, meaning they may not qual-
ify for benefits for what could be a substantial period of time. Iowa also participates
in the Treasury Offset Program that collects State and Federal tax refunds toward
overpayments. This could place individuals in a position where they have quit their
jobs, lost their benefits and incurred a large debt to the State.
I would also ask you to consider the following recommendations when debating
programs moving forward. First, limit the calculations a State must perform to pay
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out Federal benefits. A flat rate, for all those eligible for a program, is absolutely
essential to being able to implement the program quickly and efficiently. Regardless
of the age of the UI system a State uses, these are all new programs that have to
be developed, tested and implemented beginning with the application, review, ap-
proval and payment process. Thus, trying to implement a percentage of wages or
maximum wage as a percentage of benefits received would require an individual re-
view of each claim, thereby creating a labor intensive and lengthy process for each
claim.
A benefit like a payroll tax holiday would be easier to implement, would benefit
everyone in the workforce, including those already or who remained in the work-
force, and would not run through the workforce systems.
If a new unemployment benefit program is created, please consider a prospective
date of implementation. This would give the U.S. Department of Labor time to pro-
vide the necessary guidance to State workforce agencies and time to develop the
program before it is deployed, as well as manage the expectations of people receiv-
ing the payments. Like most states, we started receiving calls on March 30th from
claimants expecting payment of all three of the CARES Act benefit programs. We
have to implement the programs one at a time, which began with FPUC, PUA and
finally PEUC.
While it feels like we have been living in the pandemic for years instead of weeks,
it has only been 9 weeks since the CARES Act was passed. While we were able to
implement and pay three brand new benefit programs in 8 weeks, it was still a chal-
lenging and difficult process to manage the expectations of individuals eligible under
various programs. Implementation is also driven by how long it takes USDOL to
provide necessary guidance and they need an appropriate amount of time to be able
to provide it. While I fully understand and empathize with individuals in need of
benefits, it was nonetheless difficult to imagine for us to do things any faster than
we did because we could not work more than the 60–70 hours a week my staff has
been working since the middle of March. Additionally, my staff bore the brunt of
Iowans anxieties, anger and frustrations when they were not paid in the time they
needed or desired.
Fraud issues have also become a larger issue for State workforce agencies. We are
seeing identity theft primarily. One of the issues that concerns us is the self-
attestation that PUA permitted, which increases the likelihood for identity theft and
fraud. For instance, I received an email last week from an officer in one of our larg-
er employers who had been notified of an unemployment claim filed in his name.
Fortunately, our identity verification processes caught it and no benefits had been
paid. For the self-employed there is no currently no way to verify that they have
not returned to work while receiving benefits beyond their self-attestation. We be-
lieve requiring eligible individuals to provide more proof in support of their claims
would reduce the number of fraudulent claims. USDOL is also providing new and
better guidance to address fraud in PUA claims as well will be helpful when imple-
mented.
With regard to training workers whose jobs have been lost as a result of the pan-
demic, Iowa is well positioned. Over the past 3 years Iowa has developed and imple-
mented Future Ready Iowa, a workforce training program with many different ini-
tiatives to increase the educational attainment of Iowans to 70 percent by 2025.
Last year the legislature committed over $20M in funds to support several different
programs that would increase access to training programs at our local community
colleges through programs like the Last Dollar Scholarship program that paid the
difference between the student’s non-repayable financial aid and the cost of tuition
and fees in high demand occupations. The program has been an overwhelming suc-
cess and our partners at the community colleges have worked hard to recruit
Iowans into programs that will provide high paying jobs in career fields with pro-
jected growth. We believe we can use the infrastructure developed through Future
Ready Iowa will assist us in moving people through training programs faster and
aid our recovery efforts considerably.
Additionally, we recognize that the world we are re-entering is different from the
one we left a few short months ago and we are adapting the way we deliver work-
force services to ensure we can fulfill our mission of developing a future ready work-
force in Iowa. IWD is adding additional virtual training opportunities and utilizing
virtual job fair technology to maintain the health and safety of staff, job seekers and
employers while providing the opportunities needed to get people back to work and
for employers to find the workforce they need.
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In closing, I recognize that Iowa is a smaller State that has not had as many chal-
lenges as other states in assisting those who have lost their jobs due to the pan-
demic. However, I also think Iowa is unique in that we are a State that knows the
value and necessity of collaboration, that we are stronger together. From the begin-
ning we have benefitted from the strong, steady and mature leadership Governor
Reynolds has demonstrated on a daily basis. She has set an expectation that all
State agencies would work together to solve problems and reduce barriers and that
we would be transparent and available to all of our stakeholders as quickly as we
could. We have also worked with all of Iowa’s congressional delegations on an al-
most daily basis to address constituent concerns and to help answer questions for
our elected representatives as they try to navigate the pandemic in the best way
possible for all Iowans. I would like to publicly thank my team at Iowa Workforce
Development for their hard work, professionalism, and dedication. Every day, they
demonstrate what it is to have a servant’s heart.
I hope the committee will also recognize that all State workforce agencies have
worked hard to serve their citizens and implement the Federal legislation passed
to provide necessary pandemic assistance. We have been called on to create and im-
plement huge Federal programs through the unemployment system that are beyond
what we have ever done before or that the systems were designed to do. I know
from speaking with my peers across the country that the staff of our State workforce
agencies have worked long days, long weeks and without breaks since the pandemic
struck. They have sacrificed time with their families in order to be available to do
the mountain of work that we have been required to do. I believe, like Iowa, they
will continue to work hard when we move into the recovery phase, getting people
back to work and helping employers find a skilled and available workforce.
I am humbled and proud to lead our Iowa team. Thank you again Senator Grass-
ley and members of the Senate Finance Committee for the opportunity to share this
information with you.
USEFUL LINKS
Iowa Workforce Development webpage: https://www.iowaworkforcedevelopment.
gov/.
COVID–19 webpage: https://www.iowaworkforcedevelopment.gov/COVID–19.
Labor Market Information webpage: https://www.iowaworkforcedevelopment.gov/
labor-market-information-division.
Future Ready Iowa: https://www.futurereadyiowa.gov/.
QUESTIONS SUBMITTED FOR THE RECORD TO BETH TOWNSEND
QUESTION SUBMITTED BY HON. JOHN THUNE
Question. Unemployment offices in States across the Nation continue to be over-
whelmed with unemployment claims, even as the number of unemployment claims
level off. In addition, States’ unemployment systems are dated. These two factors
likely make additional changes to unemployment programs potentially overly bur-
densome on unemployment agencies.
Can you speak to the general capacities of State unemployment systems and to
what degree they may be able to accommodate further programmatic changes in
terms of the administration of unemployment compensation?
Answer. Generally speaking, I agree that many State unemployment systems are
dated and changes to these systems take time to implement. However, even modern-
ized systems have had difficulty implementing the CARES Act which is indicative
of the complexity of the changes necessary in order to implement programs that are
beyond traditional unemployment programs. Each new program created by Congress
increases the burden on an already stressed system and risks degrading overall reli-
ability and the customer experience. We have been essentially layering one program
on top of another and each new program creates a new layer. Obviously the more
layers we add, the more it jeopardizes the overall performance of our UI processing
system. Each new layer also requires additional testing to ensure that when the
new program is implemented, it does not degrade or interrupt programs already im-
plemented. Making changes to existing programs will be far easier to implement
versus creating yet another, different program,that will take 1–2 months minimum
to implement.
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QUESTION SUBMITTED BY HON. PATRICK J. TOOMEY
Question. In Pennsylvania, the State unemployment agency has discussed the dif-
ficulties of administering the PUA system in particular. In addition to the initial
lack of guidance, this program is particularly ripe for fraud, given that claimants
can self-certify their own eligibility and that they don’t have to provide up-front evi-
dence of prior income.
Are the problems with administering PUA in particular due to primarily the in-
herent structure of the program (for example, the fact that it is self-certifying), or
could they be largely resolved by a modernized IT system?
Answer. Both of those factors have contributed to the difficulties of administering
the PUA program.
A modernized UI system would have enabled Iowa to administer PUA benefits
more quickly. Even basic programmatic changes such as updating application ques-
tions and fields for the PUA program take longer to implement on a mainframe with
COBOL code than on a modern system.
In addition to technology limitations, the structure of the PUA program does
present inherent implementation challenges. For example, due to the amount of self-
certification that the PUA program permits, Iowa was required to review each appli-
cation individually. It was also very difficult to implement a process to make retro-
active payments effective 2 months before the CARES Act was signed into law. It
is also worth noting that because CARES Act payments must be processed through
the same mechanism as State UI payments, there is always a risk that introducing
a new program with different rules for issuing payments will affect all payrolls. As
a result, the payroll process requires extensive testing. Unfortunately, issuing pay-
ments through a separate payroll process could require even more thorough testing
with a longer implementation timeline.
I also agree that the initial lack of guidance created problems for Iowa’s adminis-
tration of the PUA program. U.S. Department of Labor (USDOL) made Iowa aware
of additional PUA program requirements months after payments were first issued
that then required changes to our system. This difficulty was compounded by the
short deadlines imposed by the USDOL to implement these additional requirements
under threat of program discontinuance placed significant strain on our business
and technology teams, not to mention additional stress to a staff that had been
working 70 hours a week without days off for several months.
QUESTIONS SUBMITTED BY HON. TODD YOUNG
UI SYSTEMS
Question. Secretary Scalia spoke at length in his testimony about how ‘‘one of the
greatest challenges in the UI system is the information technology infrastructure
used by States to administer their programs’’—which was primarily why the $600
‘‘plus-up’’ in the CARES Act was set at a flat rate. But, these system challenges
aren’t new—these same system issues occurred back during the Great Recession.
You also describe the complexities with Iowa’s legacy system in your testimony.
What system changes do you think would help States be better prepared for the
longterm in case we ever face a situation similar to COVID–19 again?
Answer. At the outset, it is necessary to think of the ‘‘UI system’’ as more than
simply technology. Without question, upgrading the technology from mainframe/
COBOL to a more flexible architecture is critical. However, equally important are
aspects of the UI system that involve business rules and processes, financial consid-
erations, and communication to customers. With this in mind, the following changes
could help States be better prepared in the long-term if we ever face a similar situa-
tion in the future:
• Require a UI System Review and Plan similar to the State Quality Service
Plan (SQSP) that is submitted to USDOL. Such a plan should include the
staffing plan; information technology changes and requirements; and tem-
plates for customer notifications.
Encourage States to change State laws and administrative codes to provide the
Director (or equivalent) of the State UI Agency with greater authority and flexibility
to implement changes when an emergency is declared by the President or Governor.
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WORK SEARCH REQUIREMENT
Question. Most States, including Indiana, waived job search requirements in order
to encourage people to stay home and prevent further spread of the virus. But, now
as States start to reopen, employers are recalling their workers or hiring additional
staff to get their businesses up and running—and are having difficulty doing so be-
cause of the additional UI plus-up.
At what point will be it reasonable for workers to be expected to search for work
as a condition of receiving unemployment?
How will that happen?
Answer. Iowa has not determined when the work search requirement will be rein-
stated, but I expect it will be shortly after the end of July. We will provide Iowans
more than 2 weeks’ notice prior to the selected date that the work search require-
ment is being reinstated. Most businesses in Iowa have reopened their doors to
bring people back to work. Additionally, the vast majority of job searches are con-
ducted online, so the risk of COVID–19 exposure while conducting a job search is
low and our offices remain closed to the public as we continue to need staff working
with UI claims processing.
Iowa will continue to consider the following suitability factors when applying the
work search requirement: comparable work to prior employment; comparable to
work performed in similar positions in industry; pay and hours similar to prior em-
ployment; and worker safety.
Iowa will continue to consider Iowans for PUA if unable to work as a result of
COVID–19.
$600/UI SYSTEMS—FUTURE LEGISLATION
Question. Some recent proposals in the Senate have included triggers and other
mechanisms to continue the $600 plus-up post-July. Based off what was described
in many of your testimonies about the complexities surrounding the rigidity and age
of State UI systems.
Is it even possible for States to implement these types of proposals?
If so, how long would claimants have to wait until those States get those systems
up and running?
Answer. This is not something that could be implemented quickly or easily. Iowa
is resource constrained and implementing any new program by ‘‘retrofitting’’ it into
the existing UI system will always present challenges. Iowa is pursuing moderniza-
tion, but with a 2-year timeline, we cannot rely on modernization to address the ex-
isting crisis. In the current environment, any new program will require several
weeks to several months to implement. On the spectrum of timeframes, Iowa could
implement an across-the-board flat reduction in the amount of FPUC payments or
a change to a flat percentage of existing benefits (i.e., 50 percent of regular benefits
is the new FPUC amount) very quickly; on the other hand, it would take many
months—at best—for us and other State unemployment agencies to implement an
entirely new return-to-work bonus program which is outside the scope of our experi-
ence. If such a plan were pursued, it would be vital to educate the public on the
front end that these payments would not be available for several months (thus cre-
ating a gap between the end of the FPUC payments and when a new program can
be implemented). The reality of this type of program would be that most people
would go back to work full time because the FPUC benefits would end at the end
of July and it will take several months before any additional benefits could be paid,
resulting in individuals getting a lump sum retroactive payment covering the time
between the end of June and the time they returned to work full time.
QUESTIONS SUBMITTED BY HON. MICHAEL F. BENNET
Question. Thank you for making very clear that Iowa would not be able to admin-
ister a wage replacement regime (in lieu of a flat additional payment) by the end
of July, when the $600 per week additional payment is scheduled to expire.
Please provide separate answers to each of the following questions.
Are you aware of any States that will be prepared to—instead of administering
a flat additional benefit like the $600—replace 100 percent of wages for all workers
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who continue to be unemployed or remain on furlough, given the ongoing health
risks, lack of child care, and lack of available jobs?
Answer. Individuals who are eligible for PUA will continue receiving those pay-
ments until the end of December. Iowa would be unable to implement 100-percent
wage replacement as the new FPUC payment quickly or easily. If such a plan were
pursued, it would be vital to educate the public on the front end that these pay-
ments would not be available for several months (thus creating a gap between the
end of the FPUC payments at the end of July and when a new program can be im-
plemented). The reality of this type of program would be that most people would
go back to work full time because the FPUC benefits would end at the end of July
and it will take several months before any additional FPUC benefits could be paid,
resulting in individuals getting a lump sum retroactive payment covering the time
between the end of June and the time they returned to work full time. For those
unable to return to work because of medical, childcare or transportation issues, they
would see several months with only PUA benefits available.
Question. How much money and time would it take for your State to build a sys-
tem that could handle adjusting wage replacement rates, rather than adding a fixed
payment like the $600 top-up?
Answer. Our best estimate is that it would take a business and technology team
3–6 months to plan, develop, and test for full wage replacement, and would cost be-
tween $150K–$600K. This 3–6-month time frame begins from the point at which
program requirements are received and no payments could be made before the end
of that time frame for FPUC payments.
Question. In other words, if we extended a flat benefit beyond July to allow for
additional time for States to upgrade their systems, how long should we extend that
flat benefit to ensure that States have enough time to transition to a wage replace-
ment regime?
Answer. As described above, a minimum of 3–6 months. Additionally, it is impera-
tive that any program changes are not applied retroactively. In Iowa, retroactive
changes to any payment requires manual adjustments to each claim and weekly
payment to make up the difference. Another fact to keep in mind is that, in 3–6
months, we would expect the number of individuals needing or eligible for continued
benefits would be minimal as we are hopeful that most companies and employers
will have recalled their staff in that 3–6 month period and that there will be suffi-
cient safety protocols in place to insure all but those in the high risk category could
return to work.
PREPARED STATEMENT OF HON. RON WYDEN,
A U.S. SENATOR FROM OREGON
There’s a lot for us to talk about today, and I want to start with Friday’s jobs
report. The President celebrated like it was the greatest victory since the end of
World War II, but let’s put this in perspective.
Speaking conservatively, more than 20 million Americans are still out of work
today, and I bet you’re not celebrating if you’re among the many people who don’t
know how they’re going to pay the rent or put food on the table this month. Watch-
ing the President celebrate victory in the middle of this jobs crisis is yet another
sign that he doesn’t understand what it’s like for people born without a real estate
portfolio.
First, let’s recall exactly how the Senate got here, starting in March. The pan-
demic hit, the economy went into lockdown, and unemployment shot into the strato-
sphere. So when CARES Act negotiations began, Democrats demanded an expansion
to unemployment benefits that would bring more workers into the system and fully
replace people’s lost wages.
Throughout the negotiations, Secretary Scalia said it couldn’t be done because
States run UI programs on Bronze-Age technology that can’t crunch the numbers
for individual workers. We said that doing nothing is unacceptable. When Secretary
Scalia failed to offer a plan to get benefits out in a timely manner, Democrats pro-
posed a flat-sum solution: $600 per week across the board on top of traditional bene-
fits, adding up to full wage replacement for the typical worker.
Now fast forward to today. Here’s what our country’s still dealing with. The pan-
demic is still killing thousands of Americans every week. The nearly 2 million new
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unemployment claims filed last week triple the highest number of claims made in
any week during the Great Recession.
It’s a national scandal that African-Americans are not only dying of COVID–19
at much higher rates, they’re also suffering vastly more economic pain than vir-
tually anybody else. Black unemployment is disproportionately high. And because
black people have been systematically excluded from opportunity and wealth in
America, it’s a lot less likely they have the financial resources to weather this
storm. For the President to say that the recovery has arrived and everything is
turning into sunshine will only perpetuate that economic injustice.
So bottom line, this crisis will go on a lot longer if the Trump administration and
Senate Republicans start yanking out these key pillars of economic support like su-
percharged unemployment benefits. Main Street businesses nationwide are hanging
on by a thread. Workers could lose their homes and fall through the cracks if the
Senate does not help them.
Now I want to respond to a few arguments I’ve heard against supercharged unem-
ployment benefits. First is the idea that Americans who’ve lost their jobs in the pan-
demic are going to be perfectly happy to sit around instead of going back to work.
In my view, that is an insult to America’s workers. It’s also a misunderstanding of
how the system functions.
Talk to the out-of-work Oregonians I’ve spoken with during this crisis, and you’ll
hear from people who want to get back to their jobs. They believe in the dignity
of work. They want to earn their pay and support their families and return to the
lives they had before. They know that they’re more likely to get ahead if they’re
working and moving up the economic ladder than being on unemployment.
Second, members of this committee said it’s somehow unhealthy for people to get
unemployment benefits during this crisis. This is just fundamentally out of touch
with the realities Americans are facing in this crisis. These benefits are what’s sav-
ing millions of jobless people from hunger and homelessness in the middle of this
pandemic. Forcing people back into contagious workplaces would also further spread
the virus that has killed 110,000 Americans and turned nursing homes nationwide
into scenes of tragedy.
Third, I’ve heard talk among Republican Senators of cutting the expanded bene-
fits potentially by half. So let’s get this straight. Between the CARES Act and Fed
lending programs, big corporations are getting trillions of dollars in support to
weather this crisis, but Congress is going to start pinching pennies when the little
guy needs help? The system is already rigged to favor the powerful and wealthy.
The Congress certainly should not stack the deck any further.
Our unemployment insurance system, created in the 1930s, should have been
modernized long ago to cover the self-employed, gig workers, and freelancers. Long
ago, benefits should have been tied to economic conditions on the ground.
I believe that Congress should also examine whether a Federal approach for ad-
ministering unemployment benefits could do a better job than this quilt of 50 dif-
ferent State systems operating today. Nobody predicted the volume of claims they’d
be hit with in this crisis, but whether it’s due to neglect or political sabotage, too
many of these State systems are failing the people who are in desperate need of
help.
I’ll close on one final thought. American workers are not to blame for the jobs cri-
sis that this country still faces today. By now everybody here has seen images of
cars stacked up for miles at food bank distribution centers around the country.
Those are modern-day bread lines. With so many people out of work, America is on
the precipice of an eviction tsunami, particularly in the black community.
Supercharging unemployment benefits—fully replacing people’s lost wages and
bringing gig workers and freelancers into the system—was the right thing to do. I
know that’s not just the opinion of the Democrats who got it done, because the
President is absurdly taking credit for the expansion in misleading campaign ads
on the airwaves right now.
Every Republican member of this committee voted to strip the expanded benefits
and slow down their distribution, and at least a few of them turned around and sent
out op-eds and press releases touting that same expansion. The Chutzpah Caucus
at work.
So the Senate has a choice to make. It’s about fairness for the tens of millions
out of work. It’s about fairness for African Americans who are disproportionately
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suffering. It’s about fairness for the blue-collar worker who looks around and sees
a whole lot more support going to corporations than to workers.
The only fair choice to make is to extend supercharged unemployment benefits,
and do it now.
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COMMUNICATIONS
AMERICAN FEDERATION OF LABOR AND
CONGRESS OF INDUSTRIAL ORGANIZATIONS (AFL–CIO)
815 16th St., NW
Washington, DC 20006
The American Federation of Labor and Congress of Industrial Organizations (AFL–
CIO) is a federation of 56 unions that represent 12.5 million workingmen and
women. We strive to ensure that every person who works in this country receives
decent pay, good benefits, safe working conditions, fair treatment, and full due proc-
ess. Our members work in every economic sector and at all wage and skill levels.
We represent workers in every state, the District of Columbia, Guam, Mariana Is-
lands, Puerto Rico, and the U.S. Virgin Islands.
The global pandemic crisis has helped to expose the fundamental inequities of our
society and the need to strengthen and modernize our 85-year-old unemployment
compensation system. Incorporated in the Social Security Act of 1935 in response
to lingering effects of the Great Depression, our unemployment insurance system
was established when most workers could expect to maintain full time jobs and
spend their entire career with a single employer. It was designed as a state and fed-
eral program that limited eligibility to workers in certain key sectors of the econ-
omy. Agricultural, domestic, government, and non-profit workers were among those
excluded from coverage, as were the self-employed.
Today the nature of work has changed, as have the needs of today’s workforce. Two
income households are increasingly necessary, and the service sector of our economy
has seen tremendous growth. Many more workers have multiple part-time jobs, and
no stable wages from a single employer. Even before the global pandemic, there was
an apparent need to reform our unemployment system in order to meet the chal-
lenges workers confront today.
The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was a nec-
essary response to the unprecedented health and economic crises created by the co-
rona pandemic and has helped to avert a complete economic collapse. However, the
problems the CARES ACT addressed are far from over. COVID–19 deaths and hos-
pitalizations continue to mount as states and localities reopen, and growing number
of even asymptomatic people have had to self-quarantine after testing positive for
the virus.
Key provisions of the CARES Act address the inadequacy of our antiquated unem-
ployment system by providing for full federal funding of new programs and giving
states additional administrative funds for programmatic operations. The Pandemic
Unemployment Assistance (PUA) program established by the CARES ACT allows
independent contractors, free-lancers, misclassified workers, part-time workers, the
self-employed, and those with irregular work histories to access some unemployment
benefits for the first time. Pandemic Unemployment Assistance also made those who
have exhausted all other unemployment benefits, or are unable to work due to ill-
ness, quarantine or caregiving needs eligible for assistance. Although PUA benefits
are far less than standard unemployment benefits, eleven million workers, or thirty
percent of current benefit recipients, would otherwise receive absolutely no income
support. This program is scheduled to expire December 31 2020, but we urge Con-
gress to make this expansion of eligibility for unemployment insurance permanent.
The CARES Act created Pandemic Unemployment Compensation (PUC) a federally
funded $600 per week benefit that is set to expire July 31, 2020. These payments
need to be extended, as they have helped workers make COBRA payments to main-
tain their health insurance, forestall eviction, keep food on the table, and postpone
retirement account withdrawals. This $600 PUC benefit makes a profound dif-
(159)
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ference to the 61% percent of working adults who obtain health insurance through
their jobs, and lose that insurance if and when they are unemployed. These supple-
mental funds not only support workers and their families, but also help to stimulate
local communities where any remaining funds are likely to be spent. We urge Con-
gress to extend these vital payments.
The CARES ACT also established an extra 13 weeks of state UI benefits for Pan-
demic Emergency Unemployment Compensation (PEUC). The additional 13 weeks
become available only after a worker has exhausted all their regular state UI bene-
fits and will be particularly important to workers in the eight states that provide
fewer than 26 weeks of UI benefits. The provision of 13 PEUC weeks reflects an
important recognition that it is virtually impossible to predict the duration of the
coronavirus pandemic or the extent of this extraordinary economic downturn.
The continuation of PUA, PUC, and PEUC benefits will help support families and
stabilizes an economy that has seen a sharp decline in many sectors. State and local
governments that have had to provide more services to residents while deprived of
their usual commercial tax base and have already begun to furlough workers. State
and local governments lost 585,000 jobs in May, and over 900,000 jobs in April. The
public sector job loss exceeds all the jobs lost in the entire US economy during the
worst month of the Great Recession.
The overall unemployment rate in the construction sector is 12.7%. There are now
more than one million-unemployed construction workers, and while employers’
added 464,000 workers in May, that makes up only about half of the jobs lost in
April. The 33,000 jobs lost from the highway, street, and bridge sector in April rep-
resent the biggest one month drop since 1990, when the Bureau of Labor Statistics
began recording industry group data. Another 23,400 jobs lost in the oil and gas
pipeline sector represent a 16% drop, with 50,000 fewer jobs now than last year.
By the end of July another 2,871 layoffs are expected from Boeing, one company
that has already shed 1,331 engineers and technicians through immediate ‘‘vol-
untary’’ layoffs.
Corporate layoffs and retail bankruptcies continue to be announced weekly, but for
an individual worker the unemployment rate is 100 or zero. Congress must do all
it can to restore our unemployment system in order to protect all workers who lose
jobs through no fault of their own.
CENTER FOR FISCAL EQUITY
14448 Parkvale Road, #6
Rockville, Maryland 20853
Fiscalequitycenter@yahoo.com
Statement of Michael Bindner
Chairman Grassley and Ranking Member Wyden, thank you for the opportunity to
address this issue. I have included attachments on long-term economic, social serv-
ice and tax reforms that will be necessary to get people back to work once this crisis
is over.
Earlier this year, I predicted a recession due to bubbles in Cryptocurrency and in
mortgage-backed securities holding rental housing assets, which I communicated to
the House Budget Committee in January. A world-wide pandemic was the furthest
thing from my mind. I reiterated these points to the Senate Budget Committee as
I was suffering from a bad cold. Five days later, that cold turned out to be
SARSC0V2.
In general, the current economy is more medical furlough than recession. Increasing
and adding benefits for many turns it into paid sick leave funded by government,
which is entirely appropriate. It is also dangerous. The implementation of CARES,
particularly the Unemployment Insurance relief, is fraught with problems.
The States have not been able to absorb the money. There are simply too many peo-
ple in need of assistance. The lump sum payments, which were negotiated by Sec-
retary of the Treasury, Steve Mnuchin, made sure that landlords who had leveraged
their properties into mortgaged backed securities would get paid.
This is convenient for the Secretary, as he helped set up these securities to extract
the equity from the limited liability companies that he and his partners own. Aaron
Glantz, who documented the establishment of these firms and securities should be
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161
called to testify before another round of stimulus checks are routed through renters
to the Secretary and his partners.
The immediate danger, which no one is talking about (call me Cassandra) is that
in short order, a large percentage of the unemployed are about to get large back
payments from their state governments. This is occurring as some workers have re-
covered, but many in America’s Heartland are about to need that paid sick leave
as SARSCov2 reaches their states. Recent reports indicate that food prices are in-
flating as the economy continues to stagnate.
This is what is known as a perfect storm. Economic historians will likely call this
period of time HYPERSTAGFLATION. Sadly, the genie cannot be put back in the
bottle, although the best course for now is not to panic if (and when) the storm
breaks.
Thank you again for the opportunity to add our comments to the debate. Please con-
tact us if we can be of any assistance or contribute direct testimony.
Attachment—Addressing the Economic Impacts of COVID–19, House Budg-
et Committee, June 3, 2020
This crisis shows some of the systemic weakness in the economy. Too many people
are paid too little. This creates a second-tier economy of low wages and subpar prod-
ucts. More pay through a higher minimum will mean better products and more peo-
ple working. If layoffs result from a higher wage, a paid training program (to meet
opportunity costs of trainees) from ESL to Associates degrees will add to a push for
higher wages. A higher minimum wage could also be used to recalculate benefits
for retirees and the disabled. The increased economic activity and higher revenues
would pay for themselves.
Low wages do not benefit shareholders, who receive a normal profit. Other workers
benefit because their wages rise with the minimum. Only the CEO-Donor class are
made worse off. Their wage theft is natural, given their low marginal tax rate in
comparison to the time of Eisenhower and Kennedy (whose tax cuts only took effect
in 1965), the differential between productivity and wages started about a year after
the tax cuts took effect. The effect was multiplied in 1982.
Low family wages are also a problem exposed by the current medical furlough. The
EITC and Child Tax Credit were enacted on a bipartisan basis, with Republicans
in the lead. Sadly, benefits are inadequate and non-refundable. This could and
should be fixed. Permanent tax reform with a Subtraction Value Added Tax levied
on employers with a credit for a median income for each child of $1,000 a month,
with pay and with no income cap will solve this problem permanently and needs
no pay-for to offset it.
Attachment—Why Federal Investments Matter: Human Services, January
2020
Our main tool in providing for human services is an employer-paid subtraction
value-added tax. This levy would be used more to channel tax expenditures to em-
ployees rather than through categorical or block grants. The most important feature
is an expanded refundable child tax credit, which would be distributed with pay and
set to provide income at middle-class levels.
The S–VAT could be levied at both the state and federal levels with a common base
and tax benefits differing between the states based on their cost of living (which
would be paid with the state levy). The federal tax would be the floor of support
so that no state could keep any part of its population poor, including migrants. It
is time to end the race to the bottom and its associated war on the poor.
The S–VAT will also facilitate human capital expenditures, with credits to support
tuition, wages and benefits for low-skill workers from ESL and remedial education
to apprenticeship. These benefits can be used in cooperation with existing workforce
investment boards, community colleges and economic development agencies.
Private education providers should also be included in the mix, including and espe-
cially the Catholic education system. Blaine Amendments need repeal, opposition to
unions ended and a focus on non-college bound students encouraged.
Medicaid for senior citizens and the disabled is a huge contingent liability for some
states. In his New Federalism proposals, President Reagan offered to assume these
costs in exchange for state funding of all other federal support. The first half of this
proposal should be implemented in the form of a new Medicare Part E with no re-
quirement for local funding.
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The remainder of health costs would be paid through employer subsidies to low-
wage trainees, as described above through an S–VAT, with state goods and services
taxes (invoice VAT) covering cash, food and health benefits for unattached non-
workers until they can be placed in the appropriate employment or disability pro-
gram (including substance abuse intervention).
Increasing the general wage level, through higher minimum wages, will remove
workers from poverty. The concept of being a member of the working poor should
be banished from the national conversation with an eventual $20 minimum wage
for both employment and training program participation, starting with $15 imme-
diately. This wage level should adjust for inflation automatically. The best support
for state budgets is to make sure that everyone is trained up to their potential.
CENTER FOR PUBLIC JUSTICE
P.O. Box 48368
Washington, DC 20002–0368
202–695–2667
https://www.cpjustice.org/public/page/content/homepage
June 9, 2020
The Honorable Charles Grassley
Chairman
U.S. Senate
Committee on Finance
135 Hart Senate Office Building
Washington, DC 20515
The Honorable Ron Wyden
Ranking Member
U.S. Senate
Committee on Finance
221 Dirksen Senate Office Building
Washington, DC 20515
RE: ‘‘Unemployment Insurance During COVID–19: The CARES Act and the Role of
Unemployment Insurance During the Pandemic,’’ June 9, 2020
Dear Chairman Grassley, Ranking Member Wyden, and Members of the Committee:
The Center for Public Justice is an independent Christian policy research and civic
education organization. We have been devoted to upholding family well-being since
our founding over forty years ago. In the last three years, a prominent focus of our
work has been researching the intersection of work and family life, and equipping
faith-based employers on best practices for their organizational policies and prac-
tices accordingly. We are committed to promoting good work so that all families
have the opportunity to flourish.
As COVID–19 forced quarantine measures earlier this year, the lives of American
workers and families turned upside down. Across the nation, homes turned into
schools, schools became food distribution sites, and work began to broadcast into liv-
ing rooms via video calls. The already-thinning boundaries between the domestic
and the public sphere have been radically changed by the COVID–19 crisis. As the
demands on family and work have fluctuated in response to community health and
safety, access to unemployment insurance has been an important safety net for fam-
ilies.
Our Christian tradition sees both family and work as two God-given areas of bless-
ing and responsibility. But, the current public health and economic crises are hurt-
ing both.
Motivated by our faith values, we believe that this Congress ought to promote un-
employment insurance programs and pandemic recovery that honors both the dig-
nity of work and the dignity of all workers. To that end:
• Supplemental assistance, such as Pandemic Unemployment Compensation,
should be continued, in some form, to uphold workers, their families, and enable
safe returns to work.
• Work share programs could be vital tools for maintaining employer-worker rela-
tionships, and should be promoted and streamlined for easy implementation
across the country.
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• Public dollars should continue to be invested in modernizing and strengthening
the systems administering unemployment insurance, so that they are accessible
for all workers.
• To support religious communities, unemployment systems should continue to in-
clude workers not traditionally included.
Continue Supplemental Assistance with State Unemployment Programs
The supplemental assistance provided to workers who experienced work loss due to
the coronavirus pandemic via federal Pandemic Unemployment Compensation has
been important in sustaining families. State unemployment programs are designed
to replenish a portion of workers’ pay before job loss. Rather than force families to
rely on a sliver of their prior income, PUC helped qualifying workers make ends
meet. For example, a husband in Michigan shared with the Center that the finan-
cial support helped his family pay their bills. In Maryland, a father of a single
mother shared his relief: ‘‘Praise God. She has a child. My daughter receiving UI
took some of the financial pressure off my wife and I to support her through this
time.’’ Caroline in Iowa works in food service. Reflecting on her experience, she
shared with the Center that the additional support through PUC was critical: ‘‘It
helped me support myself through a long, extended period of unemployment.’’ She
is excited to get back to work now, but is thankful that she ‘‘didn’t have to [do] a
job during a time where I could’ve gotten sick through working.’’
The supplemental assistance is scheduled to stop at the end of July. While some
workplaces are beginning to reopen, Michael Strain, a resident scholar and the di-
rector of economic policy studies at the American Enterprise Institute warns that
‘‘we’re still going to be in a bad situation come August or September, even if we rap-
idly improve in June and July. . . . The economy six months from now is still going
to be in very, very bad shape.’’1 This acknowledgement is why Federal Reserve
Chairman Jerome Powell recently advised Congress to extend the supplemental as-
sistance ‘‘in some form.’’2
There is some understandable frustration around this program: Some unemployed
workers are receiving more in unemployment assistance than the compensation
their colleagues are receiving while working.3 But, our current moment calls for
strong supports for both those employed and un- or under-employed. As long as the
uncertainty of the coronavirus is a threat to community welfare, state unemploy-
ment insurance will not be enough alone to help workers stay home when necessary,
or keep them afloat when work fluctuates. Without adequate income to sustain fam-
ilies through these periods of uncertainty, workers may not put public health first.
‘‘Those with direct COVID–19 exposure through their households continue to work
similar hours to others, and those with recent fever symptoms or elevated risk for
COVID complications are not reducing their work hours or taking additional pre-
cautions,’’4 finds Abigail Wozniak, a labor economist at the Federal Reserve Bank
of Minneapolis.
Additionally, many of the nonprofit faith-based and religious employers the Center
equips are experiencing a different timeline than the one assumed in the CARES
Act. In the first several months of the pandemic, these employers were serving their
communities’ immediate needs: organizing food pantries, navigating aid systems,
and connecting service recipients with resources and support. In April, when some
employers were looking towards what they needed to stay afloat, our organizations
were still addressing urgent community needs. Now that communities are adjusting
to a new normal, many of the faith-based organizations in our network have ex-
pressed concern for the future: The Paycheck Protection Program provided critical
short-term support for some institutions, but the trajectory of their work is now un-
certain. Organizations are grappling with how revenue and programming may be
1 James Pethokoukis and Michael R. Strain, ‘‘Recovering from the COVID–19 Recession: My
Long-Read Q&A with Michael Strain,’’ AEIdeas (blog), American Enterprise Institute, June 10,
2020, https://www.aei.org/economics/recovering-from-the-covid-19-recession-my-long-read-qa-
with-michael-strain/.
2 Sylvan Lane, ‘‘Power Urges Congress to Continue Boosted Jobless Benefits ‘In Some Form,’ ’’
The Hill, June 17, 2020, https://thehill.com/policy/finance/503232-powell-urges-congress-to-
continue-boosted-jobless-benefits-in-some-form.
3 Peter Ganong, Pascal Noel, and Joseph Vavra, ‘‘US Unemployment Insurance Replacement
Rates During the Pandemic,’’ Becker Friedman Institute Working Paper No. 2020–62, (May
2020), https://bfi.uchicago.edu/wp-content/uploads/BFI_WP_202062-1.pdf.
4 Abigail Wozniak, ‘‘Disparities and Mitigation Behavior during COVID–19,’’ Opportunity and
Inclusive Growth Institution, Federal Reserve Bank of Minneapolis, Institute Working Paper 32,
(May 2020), https://doi.org/10.21034/iwp.32.
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impacted in the weeks and months to come. For example, charitable contributions
are predicted to decline as much as $40 billion 5 this year and next due to economic
conditions. This uncertain future will likely result in work loss in the coming
months. Without extending a version of PUC, these workers—who worked hard to
serve their communities in the first months of the pandemic—will not have access
to the relief that was available to their service recipients.
Over 150 economists recently signed on to a letter to Congress acknowledging that
‘‘full economic recovery will remain dependent on the public health situation.’’6 In
light of this uncertain reality, as well as what is known about the choices workers
will make to ensure food for their families, we cannot allow PUC to expire at the
end of July without another form of supplement in place. Congress should continue
a level of support that (1) state systems can quickly administer, and (2) will provide
practical support to workers and their families who may experience work loss in
coming months.
Maintain Worker-Employer Relationships with Work Share
Work is inherently good and an important part of human flourishing; it provides
opportunity for humans to cultivate talents, provide for family, and exercise respon-
sibility. Work share programs (also known as short term compensation) 7 could be
a vital tool, especially in our current economy. As community economic and health
conditions evolve, there will likely be slow restarts, and some stops and starts in
the employment. Maintaining the worker-employer relationship within the changing
environment is often in the best interest of both workers and employers. In areas
that have experienced high, persistent rates of unemployment, staying connected to
work can make a big difference to employers as well as workers and their family
routines.
Work share programs enable this mutually beneficial relationship. In the 26 states
that have operational work share programs, employers have access to an alternative
to laying off members of their trained workforce. Instead of layoffs, employers can
temporarily reduce workers’ hours. The employees impacted by reduced hours are
allowed to collect part of their unemployment insurance (assuming they are eligible)
to replace part of their lost wages. The program also requires employers to maintain
worker health and retirement benefits as though worker hours were not reduced.8
A faith-based employment placement program recently shared with the Center that
many of the families they serve are eager to get back to work. Many of these fami-
lies are grateful for the enhanced unemployment insurance to which they had access
while they were laid off. As workplaces reopen, they are doing so slowly, with stops
and starts. In some cases, workers are called back with fewer hours than desired.
Work share, which the Department of Labor has clarified can be used to rehire pre-
viously laid off employees also,9 could benefit both employers and workers. Unfortu-
nately, few workers or employers are familiar with work-sharing.
In considering ways to facilitate safe returns to work, Congress should better pro-
mote work share programs to states and employers. As Congress discusses types of
relief to include in the next relief bill, Congress should continue to incentivize states
to set up work share programs as part of their unemployment insurance system.
These incentives should continue to include funding and technical expertise in build-
ing and maintaining the program infrastructure. Finally, where possible, bureau-
cratic roadblocks should be minimized so that states can accelerate the implementa-
tion of these programs.
Invest in Making State Unemployment Insurance Systems Accessible
In the CARES Act, Congress committed to states funding to improve their unem-
ployment insurance capacity. This was an important step in addressing the anti-
5 Jeremy Beer, ‘‘How Much Will Charitable Giving Decline? A New Survey Provides Us With
a Starting Point,’’ Philanthropy Daily, April 13, 2020, https://www.philanthropydaily.com/how-
much-will-charitable-giving-decline/.
6 Ben Bernanke, Heather Boushey, and Cecilia Rouse to Congress, June 16, 2020, https://
docs.google.com/document/d/1MuJDXICTKdvzKImGL4E6bKfMaNMnxMciBHYz3a5_XZg/pre-
view?pru=AAABcuHr26c*_33N3ASzrbnKgKN977ed6g.
7 U.S. Department of Labor, ‘‘Short-Term Compensation,’’ Office of Unemployment Insurance
(fact sheet), n.d., https://oui.doleta.gov/unemploy/docs/stc_fact_sheet.pdf.
8 Jane Oates, ‘‘Unemployment Insurance Program Letter No. 22–12,’’ Employment and Train-
ing Administration Advisory System, U.S. Department of Labor, June 18, 2012, https://
wdr.doleta.gov/directives/attach/UIPL/UIPL_22_12.pdf.
9 John Pallasch, ‘‘Unemployment Insurance Program Letter No. 21–20,’’ Employment and
Training Administration Advisory System, U.S. Department of Labor, May 3, 2020, https://
wdr.doleta.gov/directives/attach/UIPL/UIPL_21-20.pdf.
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quated systems, but the work is not yet done. Unemployment insurance is an impor-
tant safety net, with or without a pandemic impacting economic activity and human
flourishing. Sadly, even as states have worked to increase their capacity to respond
to this crisis, access to this important program remains challenging. One pastor
shared with the Center that older workers in their congregation are struggling to
navigate the state’s unemployment insurance website. A faith-based nonprofit work-
ing with refugees and immigrants shared with the Center that workers still learn-
ing English are struggling to understand the application requirements.
Unemployment insurance is a system we have underinvested in and failed to main-
tain well, even in spite of the inevitability of occasional economic downturns. Con-
gress should continue to enable states to strengthen their systems now, and think
long-term about what it will take to upgrade and maintain them, so that unemploy-
ment insurance systems work well for all workers.
Support Religious Communities, Include Non-Traditional Workers
Many of those who lead and support religious communities do so in non-traditional
employment roles. Administrative assistants in church offices, child care workers at
centers run in houses of worship, pastors, contractors sharing expertise are all com-
mon examples of those workers who are generally ineligible for assistance during
seasons of hardship from work loss. Yet, they are among the many Americans whose
work contributes to the vitality of our communities.
Religious organizations and congregations administer vital social services to their
local community. They run food pantries, care for the elderly, and facilitate par-
enting classes. Religious organizations and congregations also contribute to the pro-
vision of counseling services, organizing neighborhood associations, and facilitating
civic engagement. In addition to their important role in addressing community
needs, Ram Cnaan, an international expert in the areas of faith-based social care
and policy, has demonstrated that congregations also contribute to the local econ-
omy.10 Given this level of community impact, it is clear that the flourishing of non-
traditional workers is wrapped up with the flourishing of all of our families and in-
stitutions. As Congress considers the future for unemployment insurance, our sys-
tem should continue to include workers who are not traditionally included, but
whose work is no less valuable.
As Christians, our faith calls us to exercise our political authority. The purpose of
government is to advance flourishing. Advancing flourishing in the midst of a pan-
demic may seem to be an impossible task, but federal and state governments are
positioned to offer crucial support to employers, as well as to workers and their fam-
ilies. In order to eventually return to a vibrant, pluralist economy of workplaces,
workers will need the flexibility and support to move in and out of the physical
workplace while maintaining relationships with work when possible. Our desire to
see our nation—and all families that make up our nation—flourish moves us to sup-
port these principled requests.
If you would like to discuss this further, please contact Rachel Anderson, Director
of Families Valued—an initiative of the Center for Public Justice, at Ra-
chel.Anderson@CPJustice.org. Thank you for your leadership and support for our
nation’s families and workplaces.
Sincerely,
Rachel Anderson
Director, Families Valued
Resident Fellow, Center for Public Justice
Stephanie Summers
CEO, Center for Public Justice
10 Ram A. Cnaan and Seongho An, ‘‘Even Priceless Has to Have a Number: Congregational
Halo Effect,’’ Journal of Management, Spirituality and Religion 15, (November 2017): 64–81,
https://doi.org/10.1080/14766086.2017.1394214.
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CONSORTIUM FOR CITIZENS WITH DISABILITIES
820 First Street, NE, Suite 740
Washington, DC 20002
PH 202–567–3516
FAX 202–408–9520
Info@c-c-d.org
www.c-c-d.org
Hon. Chuck Grassley Hon. Ron Wyden
Chairman Ranking Member
U.S. Senate U.S. Senate
Committee on Finance Committee on Finance
219 Dirksen Senate Office Building 219 Dirksen Senate Office Building
Washington, DC 20510 Washington, DC 20510
Dear Chairman Grassley and Ranking Member Wyden:
The undersigned members of the Consortium for Citizens with Disabilities (CCD)
write in response to your recent hearing, Unemployment Insurance During COVID–
19: The CARES Act and the Role of Unemployment Insurance During the Pandemic,
to raise issues of concern for people with disabilities related to Unemployment In-
surance (UI). CCD is the largest coalition of national organizations working together
to advocate for federal public policy that ensures the self-determination, independ-
ence, empowerment, integration and inclusion of children and adults with disabil-
ities in all aspects of society.
People with disabilities live in poverty at more than twice the rate of people without
disabilities; while people with disabilities make up approximately 12 percent of the
U.S. working-age population, they account for more than half of those living in long-
term poverty. More than 65 percent of the 17.9 million working-age adults with dis-
abilities participate in at least one safety net or income support program.1 People
with disabilities also disproportionately hold low-wage (in 2013, 61.2% of working-
age adults with disabilities had incomes below 200% of the federal poverty line com-
pared to 28.8% of working-age adults without disabilities) 2 and part time jobs (32%
of people with disabilities versus 17% for people without disabilities worked part
time in 2019).3 Many people with disabilities have functional or service limitations
that prevent substantial work and receive Social Security Disability Insurance
(SSDI) or Supplemental Security Income (SSI). The SSDI and SSI programs include
work incentives such as Ticket to Work; while some people are able to use these
to transition to full-time employment, many others can only sustain more limited
hours.
Because so many workers with disabilities are part time workers, they often are not
eligible for unemployment insurance. However, the newly passed Pandemic Unem-
ployment Assistance (PUA) program and the increased benefits of Pandemic Unem-
ployment Compensation (PUC) program extends unemployment insurance to more
part time workers and thus will cover many more workers with disabilities. Given
the increased costs due to the pandemic for people with disabilities who may have
to self-isolate for longer due to pre-existing conditions to protect themselves, this im-
provement to the unemployment system is important and long needed. All people
with disabilities, even those with substantial function or service limitations who rely
on SSDI or SSI, should be able to claim the UI benefits that they earned.
In order to ensure that these UI programs work for all people with disabilities, we
urge the Committee to include a disregard in future UI legislation to prevent unin-
tended impacts on eligibility for other means-tested programs, including the Supple-
mental Nutrition Assistance Program (SNAP) and Supplemental Security Income
(SSI). The UI provisions included in the CARES Act excluded the additional PUC
funding from being considered for Medicaid eligibility, a crucial protection in this
public health emergency, but did not protect families who rely on SNAP or SSI.
SNAP provides millions of people with disabilities and their families with crucial
food assistance. Compared to people without disabilities, people with disabilities and
their families are significantly more likely to experience hunger and food insecu-
1 National Council on Disability, 2017 Progress Report (2017), https://ncd.gov/sites/default/
files/NCD_A%20Progress%20Report_508.pdf.
2 Center for American Progress, A Fair Shot for Workers with Disabilities (2015), https://
www.americanprogress.org/issues/poverty/reports/2015/01/28/105520/a-fair-shot-for-workers-
with-disabilities/.
3 Department of Labor, Bureau of Labor Statistics, Persons with a Disability: Labor Force
Characteristics Summary (2020), https://www.bls.gov/news.release/disabl.nr0.htm.
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167
rity.4 With 95% of Americans under some form of a stay at home order and massive
job loss,5 SNAP and other means tested benefits have become all the more crucial
for people with disabilities and their families. In addition, children with disabilities
receiving SSI may face a reduction in benefits due to their parents’ claims of unem-
ployment, due to deeming rules that do not count unemployment the same as wages.
This unfairly punishes children with disabilities and their families for circumstances
outside of their control. Unemployment benefits may also complicate Medicaid eligi-
bility for workers with disabilities who are attempting to work via SSI’s work incen-
tive programs, despite Congress’ decision to disregard PUC compensation for the
purposes of Medicaid and CHIP.
As Congress has done before in emergencies and disasters, it makes sense to exempt
this emergency unemployment from all means-tested programs. We urge you to do
as the House did in their recently passed legislation, the HEROES Act (H.R. 6800)
and include a disregard to ensure that low-income workers with disabilities and low-
income families with children with disabilities, and others will not have to choose
between their Medicaid, SSI, SNAP, and UI in this time of crisis.
We look forward to working with the Senate on this important issue. Please do not
hesitate to contact Bethany Lilly (lilly@thearc.org) with any questions or to arrange
a meeting.
Sincerely,
Association of People Supporting Employment First (APSE)
Autism Society of America
Autistic Self Advocacy Network
Center for Public Representation
Community Legal Services of Philadelphia
Council of State Administrators of Vocational Rehabilitation (CSAVR)
Easterseals
Epilepsy Foundation
The Jewish Federations of North America
Justice in Aging
National Alliance on Mental Illness
National Committee to Preserve Social Security and Medicare
National Disability Institute
National Disability Rights Network (NDRN)
National Down Syndrome Congress
National Organization of Social Security Claimants’ Representatives (NOSSCR)
Paralyzed Veterans of America
RespectAbility
The Arc of the United States
DATA COALITION
1003 K Street, NW, Suite 200
Washington, DC 20001
@DataCoalition
info@datacoalition.org
https://www.datacoalition.org/
June 24, 2020
U.S. Senate
Committee on Finance
Dirksen Senate Office Bldg.
Washington, DC 20510–6200
SUBJECT: Statement for the Record for ‘‘Unemployment Insurance During
COVID–19: The CARES Act and the Role of Unemployment Insurance Dur-
ing the Pandemic’’—Expanding Access to Income and Earnings Data for Re-
search Activities
Dear Chairman Grassley, Ranking Member Wyden, and Members of the Committee:
4 Carlson, Steven, Keith-Jennings, Brynne, and Chaudhry, Raheem (2017). SNAP Provides
Needed Food Assistance to Millions of People with Disabilities. Washington, DC: Center on
Budget and Policy Priorities, https://www.cbpp.org/research/food-assistance/snap-provides-
needed-food-assistance-to-millions-of-people-with.
5 Mervosh, S., Lu, D., and Swales, V. (2020, March 24). See Which States and Cities Have
Told Residents to Stay at Home. Retrieved from https://www.nytimes.com/interactive/2020/
us/coronavirus-stay-at-home-order.html.
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On behalf of the more than 50 members of the Data Coalition, I write to encourage
you to expand access to income and earnings data for targeted research activities.
With improved access to a single data source, researchers and policymakers will be
better positioned to evaluate the impact of CARES Act spending on unemployment,
the Paycheck Protection program, and other policy interventions designed to help
workers and businesses during this pandemic. In the years to come, our country will
need reliable evidence to understand these interventions and to hold the programs
accountable for achieving the intended goals. We call on Congress to ensure the nec-
essary data are available to support analysis for decision-makers and the American
people on these critical policy choices.
In late-2017 a bipartisan commission created by Congress and the President offered
22 clear recommendations about how to improve the country’s data infrastructure
to support evidence-based policymaking. While the comprehensive strategy from the
U.S. Commission on Evidence-Based Policymaking was designed to work as an en-
tire ecosystem, to date, Congress has only taken action on half of those recom-
mendations. The coronavirus pandemic necessitates action on the remaining unani-
mous recommendations from the Evidence Commission to ensure elected leaders
have critical information to understand not just the full impact of the virus long-
term on our economy and population, but also to study and learn from the policies
being implemented by the CARES Act to attempt to mitigate the pandemic’s effects.
The Evidence Commission recognized a dear need for improved access to income and
earnings data. This can immediately be accomplished. by the government by im-
proving data quality for the. National Directory of New Hires and expanding access
to include agencies using the strong privacy framework of the Confidential Informa-
tion Protection and Statistical Efficiency Act of 2018 (CIPSEA). With minor ad-
justments to federal law, approved researchers could have vastly improved,
yet still restricted and privacy-protected, access to existing data on wages
and earnings. The Office of Child Support Enforcement at the Department of
Health and Human Services operates the National Directory of New Hires, created
in the 1996 welfare reforms. This system relies on state-provided data. Enhance-
ments to data access for research purposes within the CIPSEA privacy-framework
paired with improvements to data quality, including increasing the periodicity of re-
porting and doubling the duration of data retention will vastly improve existing re-
search capabilities. Notably, proposals to expand access to this system have pre-
viously been offered by the Barack Obama and Donald Trump administrations in
annual budget proposals to Congress.
By making these improvements, researchers can help evaluate data and build evi-
dence in order to inform good policy decisions. We strongly encourage Congress to
consider and advance improvements to this infrastructure. Thank you for your con-
sideration. I would be pleased to discuss the request further with you or staff at
any time.
Respectfully,
Nicholas R. Hart, Ph.D.
CEO, Data Coalition
LETTER SUBMITTED BY KELLEY DUKAT
June 16, 2020
U.S. Senate
Committee on Finance
Dirksen Senate Office Bldg.
Washington, DC 20510–6200
RE: ‘‘Unemployment Insurance During COVID–19: The CARES Act and the Role of
Unemployment Insurance During the Pandemic,’’ Tuesday, June 9, 2020
Dear Honorable Members of the Senate Committee on Finance, I am writing you
today on behalf of hybrid workers across California and the United States and in
response to the hearings that I watched last week. While I understand the main
issue at stake in the hearing last week was whether to continue the $600 per week
until December or riot, I was completely disheartened to not hear one Senator men-
tion the issue which has been plaguing me since my claim was filed.
Mixed-income (‘‘hybrid’’) workers across this country NEED your immediate help!
Congress and the President passed the CARES Act and (though likely unintention-
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169
ally) are causing hundreds of thousands (if not millions) of mixed-income American
workers to not receive the full amount of financial assistance Congress intended for
ALL Americans to receive at this difficult time during a pandemic and widespread
unemployment.
I am truly a mixed income worker, who has both income from W–2 employment
(about 15 to 20% of my income) but who mostly identifies as a self-employed 1099
worker as an event planner and rideshare driver. I would definitely call myself a
‘‘gig economy’’ worker. I get to set my own schedule and accept work from multiple
entities as I please.
My W–2 income in 2019 came from side jobs as vent staff at conventions, customer
service temp jobs and working in guest services/customer service for the San Diego
Padres—as a fun job. I also worked a seasonal job (and do work again—see later)
for the Navy as a team member at the Naval Exchange Service Command.
As the situation was unfolding with the pandemic, I also received a job offer and
had been fingerprinted to join the team for U.S. Census Bureau. I had completed
my Orientation and Uniform fitting for the Padres and was excited to start my new
role—we had training scheduled for the Guest Experience team as well. Lastly, I
knew both of the event staff companies I worked for on the side as well (in the ‘‘gig’’
economy) would be full of work in the coming months given thatSan Diego is a huge
convention city.
Then in mid-March, the world as I knew it, shut down. Our training for the Padres
and the Census were shut down until further notice. All conventions were canceling.
And with everyone sheltering in place at home and no convention or tourism there
also weren’t going to be Uber passengers, and it wouldn’t be safe to drive anyway.
This was unfortunate too as I had a new car to use—and need to pay for.
I had been on unemployment before after more than one layoff, so I knew and un-
derstood the process of filing the regular way. Congress was thankfully acting quick-
ly on how to respond and I heard about the self-employed workers being included
for the first time. So I was excited and thankful to wait and see how that turned
out. I waited to file until after the CARES Act passed, but we had no direction or
guidance and attempts to reach EDD in California are completely useless and futile.
Since I had federal income, the antiquated computer systems that EDD used would
not allow for me to file online. I had to use a paper form, which meant I didn’t do
income by quarters, but just told. You list all of you ‘‘employers.’’
As I have never filed as a self-employed worker before and didn’t fully understand
the paper form or process, I put my clients or sources of 1099 income as ‘‘employers’’
even though my employer is me. However, I wanted to get the application in be-
cause I needed the money and because I knew it would take 3 weeks for processing.
We had no direction or guidance or info on when the system for PUA would be
added on, I faxed the form on April 1, 2020.
For weeks, I heard nothing. When you can’t file online, you don’t get the ‘‘confirma-
tion’’ number that you get when you do file online. You have no idea where it’s sit-
ting. I knew that likely most of the EDD reps weren’t in a group office so I had
no idea if anyone had even seen this. You can’t contact EDD, I would call several
hundred times per day to no avail. It’s one of the most inept operations I have ever
had the displeasure to work with.
Finally I was given an email address for EDD, and I sent an inquiry to it and I
eventually received an email back where the rep apologized for not hearing back
and since he was working from home, he couldn’t say whether or not they received
the fax, but he said he would forward the claim form via PDF which I sent to him
to make sure it got filed properly.
I don’t recall exactly when I heard or learned about the hybrid issue; I believe it
came through social media before I received my small award level, but I feared what
was coming. I wanted fore-apply for PUA on April 28th, but California and the de-
partment said that would not be allowed or futile because I had W–2 income or
‘‘wages’’ in the system.
PUA in California started at $167 per week, but now has increased up to $450/week
for those who earned $18K+ in 1099 income, which includes me. If the EDD could
consider my 2019 1099 income, I would receive close to the maximum of $450 per
week just from my 1099 earnings; with both 1099 and W–2 earnings combined I
would receive the CA UI maximum of $450/week.
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Honorable Members of this Committee, this is NOT what Congress intended. In
fact, Congressman Adam Schiff said so himself in a Town Hall with the SAG Aftra
Union in May. I present the following YouTube video featuring a Town Hall with
Congressman Adam Schiff where he states the following ‘‘it was our intention they
would have the full benefits of their full income.’’ This is stated about the 10 minute
mark here: https://youtu.be/_G1T76iYNC8.
In fact, Congresspeople Adam Schiff and Judy Chu (and signed by an additional 20
Congresspeople) sent a letter on May 8th to Speaker Pelosi and Leader McCarthy
highlighting this very issue and urging her to include provisions ‘‘to consider lan-
guage to ensure that independent workers with mixed sources of income are able
to access the same relief to make up for lost work that the CARES Act provides
to those with more traditional employment arrangements.’’ Sadly, these provisions
were NOT included in Speaker Pelosi’s HEROES Act a few days later. The full let-
ter is attached below.
How did this problem even happen?
Because whoever drafted the PUA did so using the text and framework provided for
by the Disaster Unemployment Assistance (DUA) from the 1970s as you can see
from this portion of the CARES Act:
(h) RELATIONSHIP BETWEEN PANDEMIC UNEMPLOYMENT ASSISTANCE
AND DISASTER UNEMPLOYMENT ASSISTANCE.—Except as otherwise provided
in this section or to the extent there is a conflict between this section and section
625 of title 20, Code of Federal Regulations, such section 625 shall apply to this sec-
tion as if:
(1) The term ‘‘COVID–19 public health emergency’’ were substituted for the term
‘‘major disaster’’ each place it appears in such section 625; and
(2) The term ‘‘pandemic’’ were substituted for the term ‘‘disaster’’ each place it ap-
pears in such section 625.
The problem is that when the DUA as created in the 1970s, there were no (or an
insignificant number of) mixed-income workers . . . everyone was either 100% W–
2 or 100% 1099/self-employed. That isn’t the case in 2020, and Congress did a huge
disservice to American mixed-income workers by simply doing a ‘‘Copy-Paste’’ ap-
proach to drafting the language of the PUA. The fact that there was no oversight,
no public comment period, no Congressperson (or staff member) that realized this
problem before the CARES Act was signed into law is unfortunately a whole dif-
ferent story. Sadly, what’s done is done.
But now, Members of this Committee, it’s time to correct this error. And, as I men-
tioned before, the hundreds of thousands (if not millions) of mixed-income American
workers NEED your help to fix this problem FAST. Because of this error, we are
individually losing out on THOUSANDS OF DOLLARS Congress intended us to re-
ceive—money many of us NEED to survive to pay for life’s bare essentials.
In addition, I urge this Committee to consider including a provision—if only tempo-
rarily for 12–24 months that would waive excessive earnings so as not to penalize
the American worker who might receive a small amount of income one week which
could eliminate that worker’s weekly UI/PUA benefit PLUS the additional $600
FPUC for that week. I understand these hearings last week focused mostly on this
additional $600 per week, and I understand both sides of the concerns here—hard
to get people back to work when they make more on unemployment and those who
really need that lifeline. Right now I consider myself to need that lifeline since my
work involves crowds and group events—something which may not come back for
6 months to a year or more, however, I would be happy with.
In other words (and in my specific case), I took a new job with a previous W–2 em-
ployer and now because of that week, I need to claim/certify it with the CA EDD
and I not only lose the $93 in UI this week, but also the additional $600 FPUC.
I don’t know how, in any world, one can deem that scenario as fair, since I can fully
prove income I had been earning.
Since I was offered and took a job at a different Navy Exchange store, I had no idea
that I would be ‘‘punished’’ in this manner when I did. I have been forced to receive
0 because only a small portion of my income is being counted and therefore, I would
still receive the $600 benefits you intended if my entire income or at least the ma-
jority of my income is being counted.
At the end of the day, I want to get back to work, whether as an event planner,
a guest services representative or any other of the wonderful gigs I call for work.
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I don’t want to stay unemployed, but while I am forced to because of the pandemic,
I expect to receive the amount of financial help Congress intended me to receive.
And this should be made RETROACTIVE to the date of my claim, which was also
done erroneously by EDD. You can fix this with additional guidance/legislation.
So how to fix this problem?
Whether you a mend the CARES Act (such as what you did with the PPP) or in-
clude new language, provisions and guidelines in the HEROES Act, the two options
that come to mind are:
(1) Allow States to let the applicant choose if they want their W–2 income to be
used for UI or their 1099 income. In my case, I would be given a choice to
either receive $93/week from UI or the $399 to $450/week from PUA.
(2) However, Option 1 above doesn’t take into account the full income of the indi-
vidual either. They still could lose out considerably if their income is evenly
split between W–2 and 1099. Perhaps an individual’s 1099 income can be
funded by the PUA while the States can also provide funding for the W–2 por-
tion of their income . . . obviously, only ONE $600 FPUC would be included,
but at least the money the Federal Government earmarked for 1099 workers
(PUA) would then still get to the 1099 worker. a. Example: Let’s say my 2019
total income is $45,000, with $40,000 in 1099 and $5,000 in W–2. The State
pays the normal UI for W–2 income at $100/week and then the federal govern-
ment via PUA would pay, for example, $300/week additional for a total of
$400/week UI (plus the weekly $600 FPUC) based on $45,000 in total earn-
ings.
(3) Mandate that the states use their own leeway/flexibility as written into the
law to alter or adjust their state UI code to include someone’s full income and
have the federal government then fund the difference. I don’t have a pref-
erence as to which program my claim is under (UI or PUA) but I do want my
entire income included in my benefits amount. This could be done through
guidance issued to the states through the Department of Labor or through
separate legislation such as was enacted to adjust the rules and provisions for
the PPP program.
This is your opportunity to truly help so many people in dire need,
I urge you to enact the best and most expedient course of action in these matters
to help all of the American mixed income workers who, TO THIS DAY, have re-
ceived little to no financial assistance since the pandemic hit and states went into
lockdown. The amount I no longer receive (due to excessive earnings) was not ade-
quate to even purchase groceries in the state I live in. and while the $600 per week
is helpful, for someone like me, I now get nothing.
As far as the $600 per week in FPUC, I heard both sides of the debate and I under-
stand both sides. For me, without the hybrid worker situation being resolved, I don’t
receive the $600 per week to make up for lost work anyway. In some ways I don’t
feel I have an opinion in the fight as I miss out either way. However, I have already
lost out on thousands of dollars I need to survive because of the hybrid situation,
and once you resolve that, that $600 per week will likely be a lifeline for me. Since
I have already returned partially to some work, the $450 return to work bonus will
likely be useful to me as well—if you were to go along that route. I understand that
it has been and will be difficult for employers to get someone to go back to work
if they make more on unemployment, I also think it’s a lifeline for many who are
behind on payments and could allow them to get back on their feet and help the
economy. So I believe that I do lean toward the argument that you should extend
the payments, however, you could make a provision based on income levels and/or
whether someone has returned to work.
Please solve the hybrid issue most urgently and paramountly before thousands of
us become homeless and please don’t allow those of us who have returned to work
to be punished for this work.
Sincerely,
Kelly Dukat
CC: Office of Kamala Harris, and Office of Dianne Feinstein
Supporting Documents/Resources:
California Hybrid Income Taskforce Facebook page: https://www.facebook.com/
groups/hybridincometaskforce.
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Petition on Hybrid Issue: https://www.change.org/p/unemployment-relief-for-inde-
pendent-workers-with-mixed-income-types.
Letter from Schiff, Chu: (attached).
My Interview with NBC San Diego in regard to this issue: https://www.
nbcsandiego.com/news/local/hybrid-workers-struggle-with-financial-assistance/
2316394/.
Rolling Stone Interview: https://www.rollingstone.com/music/music-features/musi-
cians-struggle-to-get-pandemic-assistance-993437/.
Variety Magazine: https://variety.com/2020/film/news/entertainment-industry-
groups-reform-pandemic-unemployment-assistance-program-1234602395/
Schiff, Chu Seek Unemployment Relief For Independent
Workers With Mixed Income Types
Workers With Both Independent and Traditional Employment Currently Ineligible
for Federal Pandemic Unemployment Assistance
Washington, DC—Rep. Adam Schiff (D–Burbank) and Rep. Judy Chu (D–Pasa-
dena) sent a letter to House Speaker Nancy Pelosi and Minority Leader Kevin
McCarthy last week urging that future coronavirus response legislation ensure that
independent workers with multiple types of income are able to access the same un-
employment assistance that the CARES Act provides to those with more traditional
employment arrangements.
‘‘Due to the sporadic and unpredictable nature of work in film, television, theater,
and music, many professionals in the entertainment industries earn a living
through a combination of traditional (W–2) and independent (e.g., 1099) employ-
ment,’’ the Members wrote in their letter. ‘‘As a result, even if they have lost a sub-
stantial source of income due to coronavirus-related disruption of their independent
work, these workers are ineligible for Pandemic Unemployment Assistance.’’
While some workers may qualify for regular unemployment compensation if they
have also lost their W–2 work, this can significantly under-measure their true earn-
ings. And those whose W–2 income has continued but only represents a small por-
tion of their earnings-for example, a worker who receives residual income from a
previous project-are left with greatly reduced income yet are ineligible for any un-
employment assistance.
The full list of signers includes: Adam B. Schiff (D–CA), Judy Chu (D–CA), Earl
Blumenauer (D–OR), Brendan F. Boyle (D–PA), Julia Brownley (D–CA), Tony
Cardenas (D–CA), David N. Cicilline (D–RI), Yvette D. Clarke (D–NY), Jim Cooper
(D–TN), J. Luis Correa (D–CA), Theodore E. Deutch (D–FL), John Garamendi (D–
CA), Jimmy Gomez (D–CA), Alan S. Lowenthal (D–CA), Stephen F. Lynch (D–MA).
Carolyn B. Maloney (D–NY). Jerrold Nadler (D–NY). Grace F. Napolitano (D–CA).
Chellie Pingree (D–ME). Janice D. Schakowsky (D–IL). Brad Sherman (D–CA), and
Debbie Wasserman Schultz (D–FL).
In March. Rep. Schiff and Members of Congress from Los Angeles and other enter-
tainment hot-zones around the country sent a letter to the Speaker and Minority
Leader requesting that emergency unemployment benefits be made available to free-
lancers, contractors, and other independent workers who have lost income as a re-
sult of the pandemic. The CARES Act included the new Pandemic Unemployment
Assistance (PUA) program, extending benefits to independent workers who do not
fully qualify for regular unemployment.
Read the full letter below:
May 8. 2020
The Honorable Nancy Pelosi
Speaker
U.S. House of Representatives
Washington, DC 20515
The Honorable Kevin McCarthy
Minority Leader
U.S. House of Representatives
Washington, DC 20515
Dear Speaker Pelosi and Leader McCarthy:
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173
Thank you for your efforts to pass the CARES Act in March, legislation that pro-
vides a crucial foundation for our response to the coronavirus crisis and that is pro-
viding desperately needed relief to millions of Americans and small businesses.
During consideration of the CARES Act, we wrote to you to request that emergency
unemployment benefits be made available to freelancers, Contractors, and other
independent workers who have lost in-come as a result of the pandemic. We are
very appreciative that the CARES Act included the new Pandemic Unemployment
Assistance (PUA) program, extending benefits to independent workers who lack the
resources of a large employer but do not fully qualify for regular unemployment.
However, while PUA has begun providing support to many previously ineligible
workers, as currently constructed many independent workers with multiple sources
of income are excluded from fully qualifying for its expanded benefits. This includes
workers with mixed employment types and multiple sources of income who have lost
income but are not fully covered by either regular unemployment or PUA.
In particular, due to the sporadic and unpredictable nature of work in film, tele-
vision, theater, and music, many professionals in the entertainment industries earn
a living through a combination of traditional (W–2) and independent (e.g., 1099) em-
ployment. As a result, even if they have lost a substantial source of income due to
coronavirus-related disruption of their independent work, these workers are ineli-
gible for PUA. Some of these workers may qualify for regular unemployment com-
pensation if they have also lost their W–2 work, but this can significantly under-
measure their true earnings. And those whose W–2 income has continued but only
represents a small portion of their earnings-for example, a worker who receives re-
sidual income from a previous project-are left with greatly reduced income yet are
ineligible for any unemployment assistance.
As you consider additional legislation to respond to COVID–19, we urge you to con-
sider language to ensure that independent workers with mixed sources of income
are able to access the same relief to make up for lost work that the CARES Act
provides to those with more traditional employment arrangements.Thank you for
your consideration and your leadership through these difficult times.
Sincerely,
CC: The Honorable Richard Neal
Chairman, Committee on Ways and Means
The Honorable Kevin Brady
Ranking Member, Committee on Ways and Means
LETTER SUBMITTED BY TERRY DUMAS
June 18, 2020
U.S. Senate
Committee on Finance
Dirksen Senate Office Bldg.
Washington, DC 20510–6200
RE: Unemployment for gig workers and independent contractors—HYBRID WORK-
ERS
Dear Committee Members, I am writing to bring your attention to a major problem
with the CARES Act. I live in Massachusetts and I’m contacting you because I know
that you are considering additional measures to help unemployed workers due to
the COVID–19 crisis. I am an independent contractor and run a consulting business
from my home. I haven’t worked since March 10, 2020 due to COVID–19. Unfortu-
nately for me, I am what’s called a ‘‘hybrid’’ worker who received both a W–2 and
1099s from various clients in 2019. The W–2 work was for two quarters and was
only one-third of my annual income. Due to this W–2, I am ineligible for Pandemic
Unemployment Assistance (PUA), which means that my true earnings from 2019
are significantly under-measured since my 1099 income cannot be considered in my
unemployment claim. The bottom line is that workers with mixed employment types
and multiple sources of income who have lost income are not fully covered by either
regular unemployment or PUA.
As you consider additional legislation to respond to COVID–19, I urge you to con-
sider language to ensure that independent workers with mixed sources of income
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174
are able to access the same relief to make up for lost work that the CARES Act
provides to those with more traditional employment arrangements.
This is a national issue. I researched the ‘‘hybrid’’ worker unemployment problem
on-line and found the attached chart prepared by a group in California:
The UI vs. PUA Problem
Historical Historical Benefit
Type of Worker Total Eligibility
W–2 Income 1099 Income Amount
W–2 Only $80,000 – $80,000 UI 450
1099 Only – $80,000 $80,000 PUA 450
W–2/1099 Hybrid $5,000 $75,000 $80,000 UI 52
As you can see, ‘‘hybrid’’ workers are at a significant disadvantage compared to tra-
ditional workers. Please support modifications to the program to allow individuals
to show their mixed sources of revenue (both W–2 and 1099) for a full and fair ac-
counting of their annual income.
Many gig workers and independent contractors have received minimal help through
the Cares Act. I urge you to work with your colleagues to get legislation in place
to make the necessary changes.
Thank you for your consideration.
Sincerely,
Terry Dumas
GREATER BOSTON LEGAL SERVICES
197 Friend Street
Boston, MA 02114
Tel: 617–371–1234
Fax: 617–371–1222
U.S. Senate
Committee on Finance
Dirksen Senate Office Bldg.
Washington, DC 20510–6200
Re: ‘‘Unemployment Insurance During COVID–19: The CARES Act and the
Role of Unemployment Insurance During the Pandemic’’
Statement of Luz Arevalo, Brian Flynn, Monica Halas,
Hannah Tanabe, and Elizabeth Whiteway
Employment Law Unit
Thank you for the opportunity to submit a written statement on behalf of Greater
Boston Legal Services (GBLS) and the clients we serve. We are attorneys at GBLS,
who have and continue to represent hundreds of clients on unemployment insurance
(UI) issues.
We are writing today, on behalf of our unemployed individual clients and client
community-based organizations, to urge this Committee not to allow the federal UI
benefit provisions of the CARES Act to expire, and, in light of the uncertain health
and economic conditions of the coming months, to tie their reauthorization and ex-
tension to economic triggers, not future dates certain.
GBLS is the largest provider of legal aid services in Massachusetts. We have as-
sisted clients with unemployment insurance claims for decades. In the last few
months, we have seen an unprecedented demand for assistance accessing the UI
system, and have helped over fifteen hundred of Massachusetts’ most vulnerable
workers with their claims in that time. The availability of the CARES Act’s federal
UI benefits has been-and continues to be-a vital lifeline for our clients. Expanded
UI benefits have allowed our clients to put food on the table, care for sick family
members, and keep current on their rent. Allowing expanded benefits to expire pre-
maturely would have disastrous consequences for the well-being of these workers,
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175
of their families, and of the public at large. Just a few examples of GBLS clients
who have benefited from the, CARES Act’s UI benefits include:
• Lilly, a survivor of domestic violence and single mother of two young children.
Lilly is originally from Cambodia, and her primary language is Khmer. Most
recently, she worked as a personal care attendant, but was laid off by the fam-
ily that employed her on March 7, 2020 due to COVID–19. Because of her lim-
ited English proficiency, Lilly experienced significant difficulty completing her
UI application. She could not afford diapers and formula for her infant while
waiting to be approved for UI benefits. Two months later, on May 7, Lilly was
approved for PUA and PUC. She is concerned she will not be able to find
childcare for her two young children during the pandemic, and does not know
how she will continue to provide for them if PUC is allowed to expire at the
end of July.
• Victoria, a single mother at high risk to contract COVID–19. PUC benefits have
provided Victoria and her family stability during uncertain times, allowing
them to keep up on rent, car payments, and utility bills without fear of running
out of money for medicine and food during the pandemic.
• David, a 27 year-old restaurant worker who has been trying for years to rebuild
his life after experiencing child abuse. After the restaurant he worked at closed
due to the pandemic, PUC benefits allowed David to keep up on rent and make
payments towards a used car so that he could make deliveries as an essential
worker.
• Michelle, a 62 year-old, self-employed licensed hairdresser who could not work
due to COVID–19. Before the PUC and PUA were implemented, she managed
to pay her March rent and was left with nothing else. Federal UI benefits have
allowed her to continue paying for rent and for food. Without these benefits, she
would be homeless.
• Hilaria and Gerardo, both of whom lost their jobs. Gerardo, a stone-cutter, con-
tracted COVID–19, remaining in the hospital for three weeks. While his job
paid for four weeks of sick-time, it then ended all pay. Gerardo’s intubation cost
him a vocal cord and the ability to eat from the mouth, requiring occupational
therapy. Hilaria’s unemployment has allowed her to provide and care for
Gerardo and their three children.
• Regina, who lost her job and would have been homeless without federal PUC
benefits. She is uncertain when she will be able to secure work in the future,
and she hopes and prays for an extension of PUC benefits. She does not know
how long she will be able to survive without these extended benefits.
During these past months, more than 40 million workers have filed UI claims. Be-
cause COVID–19 has disproportionately affected low-wage, vulnerable workers, mil-
lions of these claimants likely face circumstances just like GBLS’ clients, and are
relying on expanded UI benefits for their survival. Due to this unprecedented de-
mand and the technical difficulty of implementing these new programs, payment of
benefits has been delayed for many workers.1 Thankfully, the situation has im-
proved, and state agencies have been able to begin working through backlogs of
claims and disbursing payment to a greater percentage of claimants.2 At a time
when most American households cannot withstand a single missed paycheck,3 how-
ever, workers reliant on unemployment insurance because of COVID–19 need time
to recover from these delayed payments. For instance, other pieces of emergency leg-
islation, such as eviction and foreclosure moratoria, will expire just as the CARES
Act’s Pandemic Unemployment Compensation (‘‘PUC’’) provisions are set to expire
at the end of July.4 Allowing expanded UI benefits to expire at this time will lead
1 Anya van Wagtendonk, ‘‘Study: 71 Percent of Jobless Americans Did Not Receive Their
March Unemployment Benefits.’’ Vox (April 25, 2020). https://www.vox.com/covid-19-
coronavirus-economy-recession-stock-market/2020/4/25/21236595/unemployment-benefits-71-
percent-didnt-recieve-coronavirus-layoffs.
2 Andrew Stettner and Amanda Novello, ‘‘Unemployment Payouts Accelerated During April
and May—But Are Still Too Slow.’’ The Century Foundation (June 2, 2020). https://tcf.org/con-
tent/commentary/unemployment-payouts-accelerated-april-may-still-slow/.
3 Annie Nova, ‘‘A $1,000 Emergency Would Push Many Americans Into Debt.’’ CNBC (January
23, 2019). https://www.cnbc.com/2019/01/23/most-americans-dont-have-the-savings-to-cover-a-
1000-emergency.html.
4 Massachusetts Bill H. 4647, for example, which halted foreclosures and evictions in Massa-
chusetts is set to expire on August 18, 2020.
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to devastating consequences for working families, as well as for the economy as a
whole.
The Committee should also consider that the health and economic effects of COVID–
19 have disproportionately harmed black workers and communities. A recent study
found that as of April, less than half of the adult black population was employed,
with more than one in six black workers losing their jobs between February and
April.5 At the same time, black workers are more likely to be among the essential
workers on the front-line of the pandemic, thus facing a greater risk of exposure
and illness, and the need to remain quarantined.6 As a result, allowing expanded
UI benefits to expire will exacerbate the existing income and wealth disparities be-
tween black and white households.7
Even as cities and state begin to reopen, millions of workers likely will not be able
to find work quickly. As universities announce plans to conduct (at the least) their
fall semesters ‘‘remotely,’’ thousands of low-wage custodial and dining workers in
Boston and Cambridge alone are likely to be or remain furloughed or laid-off.8 The
economic impact will ripple to nearby businesses which depend on student popu-
lations for demand. Many workers will inevitably contract COVID–19 as it con-
tinues to spread through the remainder of this year and beyond, and will be unable
to safely return to work while recovering. Parents facing canceled summer programs
and the possibility of limited in-person schooling in the fall will have to prioritize
childcare over returning to work.
The Committee will likely hear arguments that the CARES Act’s UI provisions
disincentivize workers from returning to work.9 These concerns are baseless. State
unemployment insurance laws and the CARES Act provisions require workers to re-
main ‘‘able and available’’ to return to suitable work, including if they are recalled
to jobs to which it is safe to return. The Pandemic Unemployment Assistance
(‘‘PUA’’) provisions of the CARES Act make exceptions to this able and available re-
quirement where workers experience symptoms of or are diagnosed with COVID–
19, must self-quarantine based on medical advice, must care for family or household
members diagnosed with COVID–19, or must provide childcare due to COVID–19-
related closures, all situations where it would be unsafe or untenable to return to
work through no fault of the worker.10 Eliminating or reducing expanded benefits,
including PUC payments, would force workers who are already sick or at heightened
risk of becoming sick back to work against medical advice and before it is safe to
do so-for themselves, their coworkers, and the public at large- because they cannot
make ends meet otherwise. We urge this Committee to deliberate based on reality,
rather than hollow stereotypes.
For all these reasons, and on behalf of unemployed workers, we respectfully request
that this Committee extend the CARES Act’s UI provisions, which are vital to the
well-being of workers, their families, and the public. Thank you.
Respectfully submitted,
5 See Elise Gould and Valerie Wilson, ‘‘Black Workers Face Two of the Most Lethal Preexisting
Conditions for Coronavirus—Racism and Economic Inequality.’’ Economic Policy Institute (June
1, 2020). https://www.epi.org/publication/black-workers-covid/.
6 See Jeanna Smialek and Jim Tankersley, ‘‘Black Workers, Already Lagging, Face Big Eco-
nomic Risks.’’ New York Times (June 1, 2020). https://www.nytimes.com/2020/06/01/business/
economy/black-workers-inequality-economic-risks.html.
7 In 2017, for example, The Boston Globe reported on a study conducted by the Federal Re-
serve Bank of Boston, Duke University, and the New School which found that the median net
worth of black households in the Greater Boston Region was just $8, compared to $247,500 for
white households. See Akilah Johnson, ‘‘That Was No Typo: The Median Net Worth of Black
Bostonians Really is $8.’’ The Boston Globe (December 11, 2017). https://www.bostonglobe.com/
metro/2017/12/11/that-was-typo-the-median-net-worth-black-bostonians-really/ze5kxC1jJelx24
M3pugFFN/story.html.
8 Deirdre Fernandes, ‘‘Six Harvard Graduate Schools Will Hold Only Online Classes This
Fall.’’ The Boston Globe (June 3, 2020). https://www.bostonglobe.com/2020/06/03/metro/har-
vards-education-school-will-go-fully-online/. As of this writing Harvard College and other uni-
versities are yet to announce their plans for the fall semester.
9 See Jeff Stein, Heather Long, and Josh Dawsey, ‘‘Labor Secretary Eugene Scalia Faces
Blowback as He Curtails Scope of Worker Relief in Unemployment Crisis.’’ The Washington Post
(Apr. 10, 2020). https://www.washingtonpost.com/business/2020/04/10/labor-secretary-eugene-
scalia-faces-blowback-he-curtails-scope-worker-relief-unemployment-crisis/ (noting that Secretary
Scalia ‘‘expressed concerns about unemployment insurance being too generous’’); see also, Carl
Hulse, ‘‘Jobless Aid Fuels Partisan Divide Over Next Pandemic Rescue Package.’’ The New York
Times (May 28, 2020) (quoting Senator Lindsey Graham as promising that expanded unemploy-
ment insurance would be ‘‘extended over our dead bodies’’).
10 See H.R. 748 § 2102(a)(3)(A).
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Luz Arevalo
Brian Flynn
Monica Halas
Hannah Tanabe
Elizabeth Whiteway
Employment Law Unit
On the testimony: Jason Salgado HLS’21
LETTER SUBMITTED BY BEN HERMES
June 14, 2020
U.S. Senate
Committee on Finance
Dirksen Senate Office Bldg.
Washington, DC 20510–6200
RE: ‘‘Unemployment Insurance During COVID–19: The CARES Act and the
Role of Unemployment Insurance During the Pandemic’’
Date: Tuesday, June 9, 2020
Dear Honorable Members of the Senate Committee on Finance, mixed-income (‘‘hy-
brid’’) workers across this country NEED your immediate help! Congress and the
President passed the CARES Act and (though likely unintentionally) are causing
hundreds of thousands (if not millions) of mixed-income American workers to not
receive the full amount of financial assistance Congress intended for ALL Amer-
icans to receive at this difficult time during a pandemic and widespread unemploy-
ment.
I am a 1099 independent contractor that works for a digital marketing company in
Los Angeles, but I am also a very part time actor.
I haven’t worked a single hour of W–2 employment in almost THREE
YEARS (my last W–2 day of work was on July 11, 2017 as an actor on ‘‘The
Young and The Restless’’ soap opera).
After spending weeks learning about the CARES Act and PUA, trying to reach the
CA EDD unsuccessfully after close to 3,000 attempts, and attending SAG–AFTRA
webinars about UI and the CARES Act, when PUA finally became available here
in CA on April 28th, I applied.
However, the CA EDD sent a normal UI acceptance letter on Monday, May 4th indi-
cating that my very low W–2 acting residual earnings from 2019 (residual earn-
ings for days I physically worked 3–15 years ago) were solely going to be used
to calculate my UI weekly benefit instead of qualifying me for PUA—the program
for which I waited and applied—and that I would be receiving $112/week (as op-
posed to the initial $167/week all PUA applicants receive . . . although PUA in CA
has now increased up to $450/week for those who earned $18K+ in 1099 income.)
If the EDD could consider my 2019 1099 income, I would receive $385/week just
from my 1099 earnings; with both 1099 and W–2 earnings combined I would receive
the CA UI maximum of $450/week. Important to note: I have zero control over the
amounts of these random acting residuals and when these residuals arrive.
After 3,000 attempts, I finally spoke to a CA EDD representative on May 7th, and
when I told her that I believed I should be PUA, she told me I couldn’t qualify for
PUA because of my W–2 earnings. I explained that those ‘‘earnings’’ were from
physical work performed 3–15 years ago, but she said her hands were tied, the CA
EDD was just following the guidelines given to the states by the Department of
Labor based on the language in the CARES Act, and that, as it’s written, I don’t
qualify for PUA.
Honorable Members of this Committee, this is NOT what Congress intended.
In fact, Congresspeople Adam Schiff and Judy Chu (and signed by an additional 20
Congresspeople) sent a letter on May 8th to Speaker Pelosi and Leader McCarthy
highlighting this very issue and urging her to include provisions ‘‘to consider lan-
guage to ensure that independent workers with mixed sources of income are able
to access the same relief to make up for lost work that the CARES Act provides
to those with more traditional employment arrangements.’’ Sadly, these provisions
were NOT included in Speaker Pelosi’s HEROES Act a few days later.
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178
The full letter is attached below. How did this problem even happen?
Because whoever drafted the PUA did so using the text and framework provided for
by the Disaster Unemployment Assistance (DUA) from the 1970s as you can see
from this portion of the CARES Act:
(h) RELATIONSHIP BETWEEN PANDEMIC UNEMPLOYMENT ASSISTANCE AND
DISASTER UNEMPLOYMENT ASSISTANCE.—Except as other-wise provided in this
section or to the extent there is a conflict between this section and section 625
of title 20, Code of Federal Regulations, such section 625 shall apply to this sec-
tion as if—
(1) the term ‘‘COVID–19 public health emergency’’ were sub-
stituted for the term ‘‘major disaster’’ each place it appears in such section
625; and
(2) the term ‘‘pandemic’’ were substituted for the term ‘‘disaster’’
each place it appears in such section 625.
The problem is that when the DUA was created in the 1970s, there were no (or an
insignificant number of) mixed-income workers . . . everyone was either 100% W–
2 or 100% 1099/self-employed That isn’t the case in 2020, and Congress did a huge
disservice to American mixed-income workers by simply doing a ‘‘Copy-Paste’’ ap-
proach to drafting the language of the PUA. The fact that there was no oversight,
no public comment period, no Congressperson (or staff member) that realized this
problem before the CARES Act was signed into law is unfortunately a whole dif-
ferent story. Sadly, what’s done is done.
But now, Members of this Committee, it’s time to correct this error. And, as I
mentioned before, the hundreds of thousands (if not millions) of mixed-income
American workers NEED your help to fix this problem FAST. Because of this error,
we are individually losing out on THOUSANDS OF DOLLARS Congress intended
us to receive—money many of us NEED to survive to pay for life’s bare essentials.
In addition, I urge this Committee to consider including a provision—if only tempo-
rarily for 12–24 months—that would waive excessive earnings so as not to penalize
the American worker who might receive a small amount of income one week which
could eliminate that worker’s weekly UI/PUA benefit PLUS the additional $600
FPUC for that week. In other words (and in my specific case), if I currently receive
a random acting residual of $150 this week, I need to claim/certify it with the CA
EDD and I not only lose the $112 in UI this week, but also the additional $600
FPUC. I don’t know how, in any world, one can deem that scenario as fair, espe-
cially when I have no control over the amount of the residual or when it arrives.
At the end of the day, I want to get back to work, whether as an actor or as a
digital marketing executive. I don’t want to stay unemployed, but while I am
forced to because of the pandemic, I expect to receive the amount of financial help
Congress intended me to receive.
So how to fix this problem?
Whether you amend the CARES Act or include new language, provisions and guide-
lines in the HEROES Act, the two options that come to mind are:
(1) Allow States to let the applicant choose if they want their W–2 income to
be used for UI or their 1099 income. In my case, I would be given a choice
to either receive $112/week from UI or $385/week from PUA.
(2) However, Option 1 above doesn’t take into account the full income of the in-
dividual either. They still could lose out considerably if their income is evenly
split between W–2 and 1099. Perhaps an individual’s 1099 income can be
funded by the PUA while the States can also provide funding for the W–2 por-
tion of their income . . . obviously, only ONE $600 FPUC would be included,
but at least the money the federal government earmarked for 1099 workers
(PUA) would then still get to the 1099 worker.
a. Example: Let’s say my 2019 total income is $45,000, with $40,000 in
1099 and $5,000 in W–2. The State pays the normal UI for W–2 income
at $100/week and then the federal government via PUA would pay, for
example, $300/week additional for a total of $400/week UI (plus the
weekly $600 FPUC) based on $45,000 in total earnings.
This is your opportunity to truly help so many people in dire need.
I urge you to enact the best and most expedient course of action in these matters
to help all of the American mixed-income workers who, TO THIS DAY, have re-
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179
ceived little to no financial assistance since the pandemic hit and states went into
lockdown.
Kind regards,
Ben Hermes
cc: Senator Diane Feinstein
cc: Senator Kamala Harris
Congress of the United States
Washington, DC 20515
May 8, 2020
The Honorable Nancy Pelosi The Honorable Kevin McCarthy
Speaker Minority Leader
U.S. House of Representatives U.S. House of Representatives
Washington, DC 20515 Washington, DC 20515
Dear Speaker Pelosi and Leader McCarthy:
Thank you for your efforts to pass the CARES Act in March, legislation that pro-
vides a crucial foundation for our response to the coronavirus crisis and that is pro-
viding desperately needed relief to millions of Americans and small businesses.
During consideration of the CARES Act, we wrote to you to request that emergency
unemployment benefits be made available to freelancers, contractors, and other
independent workers who have lost income as a result of the pandemic. We are very
appreciative that the CARES Act included the new Pandemic Unemployment Assist-
ance (PUA) program, extending benefits to independent workers who lack the re-
sources of a large employer but do not fully qualify for regular unemployment.
However, while PUA has begun providing support too many previously ineligible
workers, as currently constructed many independent workers with multiple sources
of income are excluded from fully qualifying for its expanded benefits. This includes
workers with mixed employment types and multiple sources of income who have lost
income but are not fully covered by either regular unemployment or PUA.
In particular, due to the sporadic and unpredictable nature of work in film, tele-
vision, theater, and music, many professionals in the entertainment industries earn
a living through a combination of traditional (W–2) and independent (e.g., 1099) em-
ployment. As a result, even if they have lost a substantial source of income due to
coronavirus-related disruption of their independent work, these workers are ineli-
gible for PUA. Some of these workers may qualify for regular unemployment com-
pensation if they have also lost their W–2 work, but this can significantly under-
measure their true earnings. And those whose W–2 income has continued but only
represents a small portion of their earnings—for example, a worker who receives re-
sidual income from a previous project—are left with greatly reduced income yet are
ineligible for any unemployment assistance.
As you consider additional legislation to respond to COVID–19, we urge you to con-
sider language to ensure that independent workers with mixed sources of income
are able to access the same relief to make up for lost work that the CARES Act
provides to those with more traditional employment arrangements.
Thank you for your consideration and your leadership through these difficult times.
Sincerely,
Adam B. Schiff Judy Chu
MEMBER OF CONGRESS MEMBER OF CONGRESS
Earl Blumenauer Jimmy Gomez
MEMBER OF CONGRESS MEMBER OF CONGRESS
Brendan F. Boyle Alan S. Lowenthal
MEMBER OF CONGRESS MEMBER OF CONGRESS
Julia Brownley Stephen F. Lynch
MEMBER OF CONGRESS MEMBER OF CONGRESS
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Tony Cárdenas Carolyn B. Maloney
MEMBER OF CONGRESS MEMBER OF CONGRESS
David N. Cicilline Jerrold Nadler
MEMBER OF CONGRESS MEMBER OF CONGRESS
Yvette D. Clarke Grace F. Napolitano
MEMBER OF CONGRESS MEMBER OF CONGRESS
Jim Cooper Chellie Pingree
MEMBER OF CONGRESS MEMBER OF CONGRESS
J. Luis Correa Janice D. Schakowsky
MEMBER OF CONGRESS MEMBER OF CONGRESS
Theodore E. Deutch Brad Sherman
MEMBER OF CONGRESS MEMBER OF CONGRESS
John Garamendi Debbie Wasserman Schultz
MEMBER OF CONGRESS MEMBER OF CONGRESS
CC: The Honorable Richard Neal
Chairman, Committee on Ways and Means
The Honorable Kevin Brady
Ranking Member, Committee on Ways and Means
IOWA COALITION AGAINST SEXUAL ASSAULT
3030 Merle Hay Road
Des Moines, IA 50310
515–244–7424
https://www.iowacasa.org/
March 11, 2020
Hon. Charles E. Grassley
Chairman
U.S. Senate
Committee on Finance
219 Dirksen Senate Office Building
Washington, DC 20510
Senator Joni Ernst
730 Hart Senate Office Building
Washington, DC 20510
Dear Senators Grassley and Ernst, The Iowa Coalition Against Sexual Assault
(‘‘IowaCASA’’) is a statewide nonprofit organization with more than 35 years of ex-
perience advocating on behalf of victim service programs and survivors of sexual
harassment, abuse, and assault. As you know, we are hoping to get work on the
Violence Against Women Act wrapped up soon. In addition to the provisions we’ve
already discussed with your staffs, we wanted to voice our strong support for the
unemployment insurance language in section 703 of H.R. 1585, the Violence Against
Women Reauthorization Act of 2019. We sincerely thank you for your efforts on this
critical issue and we encourage the Senate to include these provisions in its version
of this legislation.
We believe this provision, which allows access to unemployment insurance, contrib-
utes to the economic stability of survivors of sexual violence and domestic abuse who
face the greatest jeopardy. Victims of sexual violence and domestic abuse often face
risk of losing their jobs for a myriad of reasons. Victims of stalking are regularly
dismissed from their jobs. We hear stories from survivors of violence who lose their
jobs for taking time off to recover emotionally and physically from the trauma
they’ve endured. We think that it’s crucially important that, in the rare instances
where survivors need to leave their jobs because of sexual and/or domestic violence,
they have access to unemployment insurance. This allows them to maintain their
economic stability while in a critical transition period. Without necessary access to
unemployment insurance, survivors could be forced to stay in a dangerous situation
longer than they wish to, and longer than is safe for themselves and their family
members.
Enacting this provision would ensure survivors and victims can access valuable ben-
efits that would prevent sexual violence and domestic abuse in the long run. Women
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181
and children are left most vulnerable in the midst of financial, employment, and
housing instability—all of which can increase the risk for sexual violence victimiza-
tion.1 This commonsense provision would help provide much-needed economic secu-
rity to these families.
We hope you will consider supporting this provision, and we look forward to con-
tinuing to work together to move this policy initiative forward. Please don’t hesitate
to reach out to us with any questions or concerns you may have.
Sincerely,
Elizabeth Barnhill
Executive Director
Iowa Coalition Against Sexual Assault
director@iowacasa.org
cc: Senator Ron Wyden, Ranking Member—Finance Committee
Senator Lindsay Graham, Chair—Senate Judiciary Committee
Senator Dianne Feinstein, Ranking Member—Senate Judiciary Committee
LEADERSHIP CONFERENCE ON CIVIL AND HUMAN RIGHTS
1620 L Street, NW, Suite 1100
Washington, DC 20036
202–466–3311 voice
202–466–3435 fax
www.civilrights.org
June 23, 2020
The Honorable Chuck Grassley
Chairman
U.S. Senate
Committee on Finance
Washington, DC 20510
The Honorable Ron Wyden
Ranking Member
U.S. Senate
Committee on Finance
Washington, DC 20510
RE: Statement for the Record, U.S. Senate Finance Committee Hearing on ‘‘Unem-
ployment Insurance during COVID–19: The CARES Act and the Role of Unemploy-
ment Insurance During the Pandemic,’’ June 9, 2020
Dear Chair Grassley and Ranking Member Wyden:
On behalf of The Leadership Conference on Civil and Human Rights, a coalition
charged by its diverse membership of more than 220 national organizations to pro-
mote and protect the rights of all persons in the United States, I thank you for the
opportunity to submit our views on the importance of reauthorizing and extending
the Pandemic Unemployment Compensation (PUC), Pandemic Unemployment As-
sistance (PUA), and Pandemic Emergency Unemployment Compensation (PEUC)
programs contained in the Coronavirus Aid, Relief, and Economic Security (CARES)
Act. We ask that this statement be entered into the record of the U.S. Senate Fi-
nance Committee hearing entitled ‘‘Unemployment Insurance during COVID–19:
The CARES Act and the Role of Unemployment Insurance During the Pandemic,’’
held on June 9, 2020.
As the COVID–19 crisis continues to rage in the United States, it is of paramount
importance that Congress attend first and foremost to the health and safety of the
country and continue to provide critical and necessary relief and aid to everyone,
particularly to the communities hit hardest by the pandemic. The United States now
leads the world both in the number of confirmed COVID–19 cases and COVID–19
deaths, and at the same time, millions of people have lost their jobs because of the
virus, causing substantial financial insecurity. We appreciate the work that Con-
gress has done to reduce the devastating impact of COVID–19 on the health and
economic security of people in America; but our fight against this virus is far from
1 Basile, K.C., DeGue, S., Jones, K., Freire, K., Dills, J., Smith, S.G., Raiford, J.L. (2016).
STOP SV: A Technical Package to Prevent Sexual Violence. Atlanta, GA: National Center for
Injury Prevention and Control, Centers for Disease Control and Prevention.
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over, and the road to recovery remains precarious for the most vulnerable in this
country.
Although everyone has been impacted by the COVID–19 pandemic, not everyone
has been impacted the same. Longstanding inequities and systemic racism have not
only resulted in Black and Brown communities facing increased risk of COVID–19
illness and death,1 but also in Black and Brown workers suffering alarming rates
of unemployment due to the pandemic.2 Working people of color are disproportion-
ately represented in lower-wage jobs that must be done outside the home, which has
placed them at greater risk of joblessness during the pandemic than higher-income
White workers who are more likely to hold the kinds of office jobs that have been
able to transition to remote work.3 Low-wage industries such as hospitality and re-
tail that rely heavily on the labor of people of color have experienced the highest
rates of unemployment.4 In particular, women of color comprise a disproportionate
share of jobs in the hardest hit industries, compounding the economic insecurity
many families of color experience.5
For these and other vulnerable communities, the process of economic recovery may
be slow as communities of color continue to face alarmingly high unemployment
rates. After losing more than 22 million jobs between February and April, the econ-
omy added 2.5 million jobs in May.6 This bump in employment, however, does not
tell the complete story. Total job losses since February is still around 20 million,
and the unemployment rate is still higher than the highest level of unemployment
reached during the Great Recession. Moreover, the gains that were experienced
were not felt equally. Though the reported unemployment numbers improved slight-
ly overall, the unemployment rate for Black workers increased in May, and unem-
ployment rates for Black (16.8 percent), Hispanic (17.6 percent), and Asian (15 per-
cent) workers remained higher than the national average.7 This trend is further pro-
nounced across gender lines. The unemployment rate for White men in May was two
percentage points below the national unemployment rate, reported at 11.3 percent.8
Meanwhile, the unemployment rates for Black and Hispanic women were a striking
17.5 percent and 19.5 percent respectively, and the unemployment rate for White
women was at 13.6 percent.9
The CARES Act, though not complete, has provided a necessary lifeline to millions
of people who have found themselves out of work during this pandemic. The PUA,
PUC, and PEUC have been particularly impactful for working people on the eco-
nomic margins, low-wage workers who do not have the savings or access to re-
sources that can help sustain them through a crisis. This is especially true for many
working people of color who—because of years of discrimination in employment, edu-
cation, housing, and lending—suffer from racial wealth gaps that make it more dif-
ficult to withstand sudden job loss. With fewer resources to draw on, nearly half of
Black and Latino families, for example, report increased food insecurity or the in-
1 See ‘‘The COVID Racial Data Tracker,’’ The Atlantic, available at https://covidtracking.com/
race (last visited June 23, 2020).
2 See Patricia Cohen and Ben Casselmen, ‘‘Minority Workers Who Lagged in a Boom Are Hit
Hard in a Bust,’’ New York Times (June 6, 2020), https://www.nytimes.com/2020/06/06/busi-
ness/economy/jobs-report-minorities.html.
3 Elise Gould and Heidi Shierholz, ‘‘Not Everybody Can Work from Home,’’ Economic Policy
Institute (March 19, 2020), https://www.epi.org/blog/black-and-hispanic-workers-are-much-less-
likely-to-be-able-to-work-from-home/.
4 Chad Stone, ‘‘People Already Facing Opportunity Barriers Hit Hardest by Massive April Job
Losses,’’ Center on Budget and Policy Priorities (May 12, 2020), https://www.cbpp.org/blog/peo-
ple-already-facing-opportunity-barriers-hit-hardest-by-massive-april-job-losses.
5 See Jasmine Tucker and Julie Vogtman, ‘‘When Hard Work Is Not Enough: Women in Low-
Paid Jobs,’’ National Women’s Law Center (April 2020), https://nwlc.org/resources/when-hard-
work-is-not-enough-women-in-low-paid-jobs/.
6 Elise Gould, ‘‘While Welcome Gains, Job Losses Since February Still Total 19.6 Million,’’ Eco-
nomic Policy Institute (June 5, 2020), https://www.epi.org/press/while-welcome-gains-job-losses-
since-february-still-total-19-6-million-now-is-not-the-time-to-stop-providing-relief/.
7 Bureau of Labor Statistics, Department of Labor, ‘‘The Employment Situation—May 2020’’
(June 5, 2020), https://www.bls.gov/news.release/pdf/empsit.pdf.
8 Cohen and Casselmen, supra note 2. As many as 4.9 million people may have been mis-
classified as employed rather than unemployed in the May jobs report making the actual unem-
ployment rate much higher than what was reported by BLS. See Chad Stone, ‘‘CARES Act
Measures Strengthening Unemployment Insurance Should Continue While Need Remains,’’ Cen-
ter on Budget and Policy Priorities (June 9, 2020), https://www.cbpp.org/research/federal-
budget/cares-act-measures-strengthening-unemployment-insurance-should-continue.
9 Cohen and Casselmen, supra note 8.
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ability to fully pay their mortgage, rent, or utilities as a result of coronavirus—al-
most double the percentage reported by White families.10
Yet, PUC is set to end in about a month, on July 31st, leaving our most vulnerable
working people without a critical supplement to unemployment insurance (UI)—one
that has allowed many families to make ends meet. PUC helps ensure that working
families can remain whole during this pandemic. Regular state UI benefits generally
replace less than half of the average unemployed worker’s earnings. The average
weekly benefit amount varies by state, but the average benefit nationwide was only
$378 in March, with some working people receiving much less.11 In Louisiana, for
example, the average benefit was only $211 per week.12 During this particular eco-
nomic crisis, when businesses are shuttered, when there may be no jobs to return
to, and the duration of the crisis is determined largely by the virus itself, state ben-
efit amounts without PUC are insufficient for the average worker. Allowing PUC
to expire will not end the recession or make jobs return; it will only increase finan-
cial hardships, and the people who will feel these hardships most acutely are people
of color who have already been systemically economically disadvantaged and who
are particularly vulnerable to COVID–19.
PEUC, which provides federal funding for an additional 13 weeks of state UI bene-
fits, is set to expire on December 31st despite no indication that the need will dis-
sipate. During the week ending on May 30th, over 1 million individuals claimed
PEUC benefits,13 and these benefits are particularly important for communities of
color. Specifically, extending the duration of UI benefits through PEUC is critical
for Black workers who have been disadvantaged in the job market and as a result
have historically experienced longer periods of unemployment as compared to White
workers.14 Failure to extend benefits would only exacerbate the harm caused by
prior policy choices that have made Black communities more vulnerable to unem-
ployment in the first place.
Similarly, PUA, which provides relief to working people who have exhausted their
state UI benefits or who have been left out of regular state UI entirely—inde-
pendent contractors, freelancers, self-employed workers, workers seeking part-time
work, and those who do not have a long-enough work history to qualify for state
benefits—is set to expire on December 31st. Though slow to start, PUA has provided
real relief during this crisis to millions of people. Over 9 million individuals claimed
PUA benefits during the week ending May 30th.15 Without PUA, not one of these
individuals would qualify for any other form of unemployment assistance. And the
need continues: over 1.45 million people filed new PUA claims just in the first two
weeks of June.16 To allow PUA to expire under these circumstances is to allow eco-
nomic ruin for millions of Americans.
As this dual public health and economic crisis goes on, we know that many people
will not be able to return to work quickly. For communities hard hit by coronavirus,
family members may still need to provide care for someone diagnosed with COVID–
19. Employers may have gone out of business or may be slow to reopen at full capac-
ity. Still, many childcare facilities may remain closed, making employment outside
of the home impossible for some. Even pre-pandemic, lack of affordable childcare
presented significant challenges for Black and Latino mothers who are more likely
to be the sole or primary breadwinners for their families and who disproportionately
occupy low-wage jobs with inconsistent, or nonstandard schedules, making childcare
a struggle.17 Whatever the reason, these individuals and their families will continue
to need support from PUA, PUC, and PEUC during this economic crisis. These pro-
grams must be reauthorized and extended.
10 Steven Brown, ‘‘How COVID–19 Is Affecting Black and Latino Families’ Employment and
Financial Well-Being,’’ Urban Institute (May 6, 2020), https://www.urban.org/urban-wire/how-
covid-19-affecting-black-and-latino-families-employment-and-financial-well-being.
11 Stone, supra note 8.
12 Id.
13 Department of Labor, News Release, ‘‘Unemployment Insurance Weekly Claims’’ (June 18,
2020), available at https://www.dol.gov/ui/data.pdf (last visited June 23, 2020).
14 See Christian E. Weller, ‘‘African Americans Face Systematic Obstacles to Getting Good
Jobs,’’ Center for American Progress (December 5, 2019), https://www.americanprogress.org/
issues/economy/reports/2019/12/05/478150/african-americans-face-systematic-obstacles-get-
ting-good-jobs/.
15 Department of Labor, supra note 13.
16 Id.
17 Leila Schochet, Center for American Progress, ‘‘The Child Care Crisis Is Keeping Women
Out of the Workforce’’ (March 28, 2019), https://www.americanprogress.org/issues/early-child-
hood/reports/2019/03/28/467488/child-care-crisis-keeping-women-workforce/.
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Importantly, to meet the need, these benefits should not be tethered to an arbitrary
deadline but must be tied to specific economic triggers to ensure that these critical
measures stay in place until the labor market recovers. It is unlikely that our na-
tion’s economic recovery will be quick or that it will be experienced equally. Given
the uncertainty around when this crisis will end, and the magnitude of the need,
Congress must ensure that relief measures do not expire too soon or become unnec-
essarily politicized, which would only add to the hardship being faced by vulnerable
communities because of this pandemic.
The pandemic has exposed and exacerbated persistent disparities in our UI system.
As we emerge from this crisis, we also ask that the Committee consider long-term
structural reforms to strengthen the ability of UI to deliver meaningful assistance
to vulnerable families and individuals and act as a stimulus for the economy. Many
of our coalition members have identified key components of effective long-term re-
form,18 including mandating a minimum of 26 weeks of UI in all states, requiring
states to replace a higher share of people’s lost income, ensuring that UI is available
to part-time workers in every state, making work-sharing available in every state,
and fixing extended benefits triggers on economic indicators so additional weeks of
benefits are turned on automatically based on increases in the unemployment rate.
We thank you again for the opportunity to express our views. We urge this Com-
mittee to support reauthorization and extension of the PUC, PEUC, and PUA to
meet the need created by the current economic crisis. Specifically, such an extension
should be tied to the labor market to ensure that relief is available for as long as
the economic conditions warrant, particularly given the growing uncertainty regard-
ing the extent and duration of the downturn. We also ask that the Committee con-
sider structural reforms designed to strengthen UI for everyone. Please contact
Gaylynn Burroughs, Senior Policy Counsel, at burroughs@civilrights.org with any
questions.
Sincerely,
Vanita Gupta
President and CEO
LEGAL AID AT WORK
180 Montgomery Street, Suite 600
San Francisco, CA 94104-4244
T: 415–864–8848 | F: 415–593–0096
www.legalaidatwork.org
June 23, 2020
U.S. Senate
Committee on Finance
Dirksen Senate Office Bldg.
Washington, DC 20510–6200
Re: Legal Aid at Work’s Statement for the Record for the Hearing on ‘‘Unemploy-
ment Insurance During COVID–19: The CARES Act and the Role of Unemployment
Insurance During the Pandemic,’’ Tuesday, June 9, 2020
Dear Senate Committee on Finance:
Legal Aid at Work (‘‘LAAW’’) is pleased to offer the following letter about the imple-
mentation of the Coronavirus Aid, Relief, and Economic Security Act, also known
as the CARES Act.
LAAW is a California-based nonprofit legal services organization. For over 100
years, we have served low-income, working families, and worked to enforce and
strengthen workers’ rights. Through our free clinics and helplines, direct representa-
tion, and policy advocacy, we enforce compliance with, and seek to expand, existing
workplace protections. The CARES Act is near and dear to our organizational heart.
The populations we serve face income inequality, vast differences between the cost
of living and their salaries, and uncertainty in the midst of a global pandemic. Low-
income workers bear the biggest economic burden as a result of state shutdowns,
and it is the government’s responsibility to take care of our most vulnerable citizens.
18 National Women’s Law Center et al., ‘‘Fixing Unemployment Insurance in Response to
COVID–19’’ (March 2020), https://nwlc-ciw49tixgw5lbab.stackpathdns.com/wp-content/
uploads/2020/03/NWLC-et-al.-UI-COVID-Factsheet-20200323.pdf.
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185
As a workers’ rights organization in California, LAAW has seen first-hand the direct
and powerful impact the programs created under the CARES Act have had on low-
wage workers. LAAW operates twelve Workers’ Rights Clinics across California and
an additional five subject-matter specific helplines. Through these clinics and
helplines, we have heard from thousands of workers who are unemployed due to
COVID–19 and are unsure when they will be able to return to work. Specifically,
since March 16, 2020, our Workers Rights Clinics have conducted approximately 750
intakes. To put that in perspective, in the year prior, we conducted only 285 intakes
in that same time frame. The key problem discussed, overwhelmingly, was Unem-
ployment Insurance benefits. These numbers only represent the intakes our law
clerks and attorneys performed after assessing for eligibility for our program; in
fact, we had over 1,600 phone calls to our Workers’ Rights Clinic in that same time
period. Additionally, for our newly launched clinic designed specifically to help
workers file for Pandemic Unemployment Assistance (PUA), there were over 300 re-
quests for appointments in the first few weeks alone.
Because many of our clients live paycheck to paycheck in jobs that have been dis-
proportionately affected by the pandemic, such as domestic labor and restaurant
staff, the vital assistance of the programs created by the CARES Act cannot be over-
stated. Specifically, the additional money provided to workers under Pandemic Un-
employment Compensation (PUC), is a lifeline for these workers. The average Un-
employment Insurance benefit amount in California is $321 per week (roughly
$1,400 per month).1 When compared to the cost of living in California, it is clear
that this amount is not sufficient to support a worker and their family. The median
monthly rent of a two bedroom apartment in March 2019 in San Francisco was
$2,474, in San Diego $2,030, and in Los Angeles $1,752.2 It is clearly impossible for
families to survive on Unemployment Insurance benefits alone without the addi-
tional $600 from the federal government. Indeed, for many of them, the $600 per
week is the difference between starving and putting food on the table, homelessness
and making rent, affording healthcare and dying of preventable diseases.
In addition to skyrocketing unemployment rates, even workers who are still em-
ployed are now struggling to work and provide care for children and family mem-
bers whose school or place of care is now unavailable. Many of these workers must
turn to Unemployment Insurance benefits as there is no other care option, and they
are unable to perform work right now. One of our clients, ‘‘Tamara,’’ works as a se-
curity guard and is a single mother to a three-year-old. Her daycare suddenly in-
formed her on a Wednesday that they would no longer be taking care of children
because of COVID. She called her job to inform them that she may not be able to
work that Thursday or Friday. The supervisor she spoke with gave her backlash,
saying that Tamara was going to have to take sick time, get written up, or possibly
get fired.
As Tamara’s story shows, it is essential that any future legislation continues to en-
sure parents can continue to receive Unemployment Insurance if they are unable
to work because of the need to care for their children and ensures workers like Ta-
mara will not lose their job in these situations. However, any proposal must go be-
yond just children and include all family members for whom the worker is providing
care. Individuals in communities of color are especially impacted by family care-
giving protections, because they are more likely to be caregivers and also workers.
Approximately 68% of Latinx caregivers are also in the workforce, as well as 67%
of Asian caregivers, 60% of Black caregivers, and 56% of white caregivers.3
Although the new programs under CARES may have had a bumpy implementation,
now implemented, they are a lifeline for the over 325,000 Californians who filed new
Unemployment Insurance claims in April 2020 alone.4 This is especially significant
considering that April 2019 saw only around 44,000 new unemployment claims. The
most recent data indicate that over 2.4 million Californian jobs were lost from
March to April, far exceeding the previous month-to-month high of 132,800 jobs lost
1 Employment Development Department, Quick Statistics, https://www.edd.ca.gov/
About_EDD/Quick_Statistics.htm (last visited June 23, 2020).
2 Nick Wallace, What Is the True Cost of Living in San Francisco?, Smart Asset (March 4,
2020), https://smartasset.com/mortgage/what-is-the-cost-of-living-in-san-francisco.
3 NAC and AARP Public Policy Institute, 2015 Report: Caregiving in the U.S. 61, AARP (June
2015), https://www.aarp.org/content/dam/aarp/ppi/2015/caregiving-in-the-united-states-2015-
report-revised.pdf
4 Loree Levy and Aubrey Henry, California Unemployment Rate Rose to Record 15.5 Percent
in April, Employment Development Department (May 22, 2020), https://www.edd.ca.gov/News-
room/unemployment-may-2020.htm.
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during the Great Recession from December 2008 to January 2009.5 Removing these
protections now that workers are just starting to reap their benefits and before the
end of this pandemic is even known would be irresponsible and devastating to work-
ers and our overall economic recovery.
Rather, these programs must be extended and there must be further investment in
effective implementation. Our own work in California implementing the first-in-the-
nation Paid Family Leave program can be instructive. As we learned, it is critical
that implementing agencies like the Department of Labor partner with grassroots
organizations, communities of color, and immigrant communities to ensure effective
outreach and equitable implementation. If these communities are not aware of the
programs, they will not be able to benefit from them.
Based on the above, we urge that Congress take action to reauthorize PUC and pro-
vide an appropriate extension of PUA and PEUC based on economic triggers, rather
than specific dates, to ensure these essential financial supports do not end pre-
maturely. This is essential to ensure that workers and our economy survive this
pandemic. It is vital that we fight both the spread of COVID–19 and the effects of
preventable, poverty-related dangers.
Very truly yours,
Jenna Gerry
Senior Staff Attorney
Work and Family Team
Legal Aid at Work
Simone Lieban Levine
Law Clerk
Work and Family Team
Legal Aid at Work
LUTHERAN SERVICES IN AMERICA
100 Maryland Avenue, NE, Suite 500
Washington DC 20002
202–499–5832
Statement of Charlotte Haberaecker, President and CEO
On behalf of the one in 50 Americans who rely on the 300 Lutheran health and
human services providers throughout the United States that comprise Lutheran
Services in America, thank you for considering our statement at this important
time. With our active presence in over 1,400 communities in 45 states as seen on
this map, our work is critically important in improving the lives of America’s most
vulnerable people, ranging from seniors, veterans, and people with disabilities to
children, youth and families, and the homeless.
The COVID–19 pandemic dramatically affects all of the people we serve and serv-
ices we provide. Our 300 health and human service organizations are on the front
lines caring for people while taking extraordinary steps to protect their staff and
people served. Yet they increasingly struggle with equipment shortages, especially
personal protective equipment; severe workforce shortages necessitating hazard pay;
declining revenue; and the need to reduce or eliminate needed services. These se-
vere challenges are occurring while our organizations simultaneously face limited
cash reserves, decreasing revenue and already-tight margins.
Our work is deeply embedded in communities across the country where we have
provided services for over 150 years. Yet our work-which comprises a significant
part of the health and human services delivery system-cannot continue without spe-
cific measures taken soon to support nonprofit health and human service organiza-
tions. Without needed resources to support our work during this time of crisis, we
will be unable to meet the increasing needs of individuals and communities at their
most vulnerable time. One specific resource that is direly needed is an in-
crease in the federal unemployment insurance reimbursement for self-
funded nonprofits (also known as ‘‘reimbursing employers’’) to 100% of
costs.
5 Loree Levy and Aubrey Henry, California Unemployment Lowers Slightly to 16.3 Percent in
May, Employment Development Department (June 19, 2020), https://www.edd.ca.gov/news-
room/unemployment-june-2020.htm.
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Since 1972 when nonprofit organizations were required to provide unemployment
benefits to their employees for the first time, 501(c)(3) charitable nonprofits were
given the option to opt out of the State Unemployment Tax system and have been
permitted by Congress to self-insure claims for unemployment benefits by paying
back the state unemployment trust fund for benefits paid to their former employees.
These ‘‘reimbursing employers’’ include nonprofits, state and local governments, and
federally recognized Indian Tribes that follow the law by electing to make payments
in lieu of contributions to state unemployment trust funds.
As currently enacted into law, Section 2103 of the CARES Act provides that the fed-
eral government will cover 50 percent of the cost of claims charged to these reim-
bursing employers. This will subject self-funded nonprofits throughout the country
to crippling payments to their state unemployment systems later this year, while
other employers will likely experience little or no additional costs resulting from
mass COVID–19-related layoffs. The impacts will be real. Many nonprofits will
be hit with a bill for reimbursement to states at a time when the demand
for services is highest.
Seventy-five percent of payroll costs in the nonprofit sector are paid out by ‘‘reim-
bursing employers.’’ Together, these organizations provide much of the infrastruc-
ture that we rely on to serve people in all our communities. Addressing this issue
by providing 100% reimbursement for these nonprofits will help ensure
that they will be able to better direct their limited resources to serving vul-
nerable people through the care and services they provide every day.
PHILADELPHIA UNEMPLOYMENT PROJECT
112 N. Broad St., 11th Floor
Philadelphia, PA 19102
267–976–4706
Statement of John Dodds, Director
The Philadelphia Unemployment Project has been around since 1975 and we have
never seen anything like this. Massive increases in unemployment like we have ex-
perienced over only a couple of months are unprecedented.
The current unemployment rate in the nation of 13.3% is far higher than at any
time since the Great Depression, other than April. Pennsylvania’s unemployment
rate is 15.1% in the latest count and Black unemployment nationally rose again to
16.8% in May. The Bureau of Labor Statistics has indicated that the national num-
ber for May is an undercount and could actually be 16.3%. In the week the BLS
did the unemployment survey for May there were 29,965,415 people collecting un-
employment benefits but the BLS said that only 20,935.000 were unemployed.
‘‘The unemployment rate itself is significantly going to understate the drop in eco-
nomic activity,’’ indicated Stephanie Aaronson, the director of economic studies at
the Brookings Institution. In other words, despite President Trump’s victory lap, un-
employment remains totally out of hand.
As the collapse of the economy took place the Congress passed the CARES Act to
try to avert an economic catastrophe. Included in the Act was an extension of unem-
ployment benefits to 39 weeks and a $600/weekly supplement to worker’s unemploy-
ment checks. The CARES Act provided $887 Billion for small and large businesses
and $260 Billion for 40 million workers thrown out of their jobs. While the business
funds have been extended for longer periods and much is still unspent, the $600
supplement is due to expire after only 4 months, long before most workers will be
able to return to their jobs. Remember, workers whose employer calls them back
must return to work unless they have good cause or they will lose their unemploy-
ment checks. The House has passed legislation to continue the supplement another
six months, however President Trump and Leader McConnell are opposed to con-
tinuing the program, as tens of millions remain out of work.
Consumer spending amounts to 70% of the US economy. Providing the $600 supple-
ment gave a great boost to laid-off workers who were able to maintain their living
standards despite the pandemic and some lower paid workers have gotten more
than that when working. 40% of low wage workers lost a job in March according
to the Federal Reserve, as lower paid employees have been hardest hit by the pan-
demic. The supplement has helped keep the economy from totally imploding and
using the unemployment system to get stimulus funds to those in need is a common
sense means of inserting stimulus, targeted to those in need and keeping the econ-
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omy from going under. (Although the PA unemployment service has been far from
efficient, leaving many thousands of PA workers waiting for their unemployment
checks for as long as 10 to 12 weeks, but that’s a story for another day.)
On top of the stimulus provided to the broader economy by the $600 supplement,
there is the situation for so many families who need that money to survive. Enough
statistics have been provided. I now want to provide testimony from some of Phila-
delphia’s unemployed on the importance of the supplement.
‘‘I am currently receiving these benefits. I am in the live event and theatre produc-
tion sector, and our industry has no way of coming back to work right now . . . and
will not until there is an effective treatment or cure for COVID–19.’’—James Jack-
son
‘‘I am still in dire need of mine I will be homeless if/lose mine.’’—Ash H.
‘‘I am a single mother of two young children and an independent contractor and has
been out of work since March due to the pandemic. I have been collecting the PUA
benefits plus the $600 stimulus for 12 weeks now and without it my family and I
would have nothing! I would not be able to pay any of my bills, have food in my
home, diapers and many other essential things my youngest child needs. Without
the extra $600 stimulus I still would not be able to live off of the $195 a week espe-
cially because the dependent allowance is only $8.00.Please do not stop the $600
stimulus prematurely because without it many families including mine would lose
everything!’’—Alyssa Paul
‘‘I receive this and yes it’s not the time to cut it off. This is how I pay my rent and
bills. I only receive $175 a week. That’s not even enough at the end of the month
to pay my rent and bills if they cut it off.’’—Ty Clark
‘‘I’m in desperate need of my continued $600/week pandemic payments as I’m not
working and haven’t been called back to work. I’m the only person in my household
who’s able to provide for our family. I’m a father of 3 kids who need to eat and have
running utilities. This will be a major setback if my benefits are discontinued! I’m
not a lazy person. I’m someone who wishes to return to work soon but if this shall
happen myself and my family will be homeless worst then before the pandemic if
this should happen!’’—Marcellus Swann
‘‘I get the $600. Without it my unemployment is only $95 a week.’’—Kris Hagan
‘‘I really need this assistance because it helps to cover my bills as well as taking
care of my child. I currently had to reapply for benefits and not sure if I will get
unemployment or get a small amount of weekly benefits, so this PUA will help to
cover my bills until I find a job or get called back to work.’’—Lewanna Golding,
Long-term substitute teacher
To protect these families and continue a solid stimulus to the economy we need to
maintain this supplement to the benefits of laid off Americans.
LETTER SUBMITTED BY MICHELLE PHILLIPS
June 17, 2020
U.S. Senate
Committee on Finance
Dirksen Senate Office Bldg.
Washington, DC 20510–6200
Dear Senate Committee on Finance,
I am writing to you in hopes for change regarding W–2/1099 Hybrids not eligible
for PUA until UI claims are exhausted. I am a self-employed massage therapist
with a $1,748 UI starting claim balance from a 2019 on-call position that I worked
a few days at ($4,000.) My primary income was from my mobile/brick and mortar
massage business ($36,000). In March I officially closed my business due to COVID–
19 with the intention of doing mobile massage only once massage is approved in
California. I have paid into unemployment for 20 years and went independent 2
years ago to accommodate a full time school schedule. As of June 19th, massage will
reopen in California but in-home massage is not approved.
In March I filed for UI and was approved for $81/week for approximately 22
weeks, the time it will take to exhaust the $1,748 starting claim balance. My pri-
mary self-employment income of $36,000 is not being acknowledged. As low as my
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189
balance is, I don’t understand why EDD chose to spread my income over so many
weeks. Why couldn’t they pay out a more reasonable $167 or $300 weekly payment
over less weeks (i.e., $1,748/6 weeks = $291 weekly)? I would then be able to file
for PUA which would be based off my primary source of $36,000 self-employment
income. I submitted an EDD Appeal on June 16th and attended the June 17th Zoom
California EDD Appeal Court Hearing.
The additional $600 weekly has been my saving grace. When it expires end of
July, I’ll have 5 weeks left of my UI claim at $81/week before I can apply for PUA.
Who knows how long that will take before I receive a payment? I’m hoping to be
in my new career field of ultrasound by then but I hear many hospitals are on a
hiring freeze and testing centers have limited availability in scheduling licensing
exams. At that point in time, mobile massage may or may not be approved to return
to and I don’t know if my clients (some immune compromised) will even allow it.
The CARES Act is excluding us hybrids who have very little W–2 income and ma-
jority 1099. I don’t believe this was the intention. Here are my solutions that I’d
appreciate being taken into consideration:
(1) As previously stated, weekly unemployment should be increased to a reason-
able number Spread over less weeks. Allowing the claimant to be eligible to
file for PUA sooner, where the Majority of their income was acquired.
(2) If PUA is federal and UI is state, the claimant should be able to file for both
simultaneously as the claimant claims and pays taxes to both. UI would pay
based of the W–2 income and PUA would be based off the 1099 income.
(3) If a claimant has predominantly been a W–2 employee in the past and has
paid into unemployment for years, then they should be eligible for the max-
imum UI.
(4) If a claim balance is low, EDD should just send the balance via check or direct
deposit. It would conserve EDD resources so that they may focus on larger
claims/issues.
(5) The $600 weekly extension should continue for those who are unable to return
to their work (such as mobile massage therapists) and to those whose income
is significantly less after they’ve returned to work (i.e., 50% less up to $1,000
weekly income, paystub required to submit). Extend the additional $600/week-
ly for 3 months or until the end of 2020.
I believe I should have retroactive pay of $300–$369 per week from when I filed
my claim mid-March based off my total income and years paid into UI. PUA would
have approved me for much more than UI. I am a US Citizen, I pay taxes on time
every year, a business owner, and full time student (having to pay my school loan
while still attending the last 2 years). Thank you for your consideration and please
acknowledge us hybrids who have not been getting the financial support we deserve.
Sincerely,
Michelle Phillips
CC: Office of Kamala Harris and Office of Diane Feinstein
LETTER SUBMITTED BY ROBIN ROGERS
June 10, 2020
U.S. Senate
Committee on Finance
Dirksen Senate Office Bldg.
Washington, DC 20510–6200
Hello, I am primarily an independent contractor from San Diego and I work as a
‘‘Brand Ambassador.’’ My job entails doing educational product sampling events and
in-store demos within the health and wellness industry. One of the most challenging
aspects of this type of position is to schedule enough hours to earn a living. Con-
sequently, it is often necessary to piece together a decent amount of hours by work-
ing for different companies. In 2019 and up until March 17th when all my ‘‘gigs’’
were canceled due to COVID–19, I worked for four separate companies and I was
paid by only one as a W–2 employee. I was an independent contractor for the other
three, which accounted for 85% of my income. I earned about 27K from 1099 income
in 2019 and I am currently only receiving $114 per week in UI benefits. I should
be receiving a substantially higher benefit amount, if my total income is taken into
consideration.
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190
Unfortunately, the CARES Act (and its interpretations) is preventing me and all
mixed-income earners from receiving the full amount of PUA Congress intended us
to get, because of very little W–2 income. There are many of us ‘‘creative types’’ in
California. Would you PLEASE help us get what we are entitled to?
Thank you kindly,
Robin Rogers
LETTER SUBMITTED BY CHEYENNE SALÉS
U.S. Senate
Committee on Finance
Dirksen Senate Office Bldg
Washington, DC 20510–6200
I respectfully request that our elected officials recognize and prioritize the signifi-
cant financial impact of including a small amendment to the CARES Act with re-
gard to unemployment. The world’s focus shifts away from the daily struggles many
face with the elimination of work in industries that will not recover in the foresee-
able future and many sole proprietors/small business owners won’t recover at all.
A known but unresolved issue that will address the unemployment systems criteria
for implementing the Pandemic Unemployment Assistance (PUA) program is needed
now.
Specifically, I refer to ‘‘Hybrid’’ workers, taxpayers that have multiple jobs as inde-
pendent contractors that form a significant portion of the work force in this country.
We pay taxes on income derived from both 1099/W–2, typically very low W–2 earn-
ings as this often is from part-time ‘‘supplemental’’ work. Pre-pandemic the W–2 in-
come was the ONLY eligible option to collect unemployment insurance and for hy-
brid workers this has not changed!!
Consider the Meeting and Events/Hospitality Industry that operate large corporate,
healthcare and sporting events. This industry will be slow to recover amidst health
concerns over air travel, financial costs to bring groups to hotels that share large
scale meeting rooms, buffet style meals and other activities. This requires the logis-
tics of professionals much like those in the entertainment industry who work tire-
lessly behind the scenes to make it all happen.
In the case of hundreds of thousands of independent contractors throughout the
country we are falling through a crack by being asked to survive on amounts start-
ing as low as $40 in California (in my particular case $86/week) because the ONLY
income allowed in the current unemployment calculations is from a small but quali-
fying PART-TIME job. The minimum amount for PUA in California is $167 (50%
of the average UI claim for each respective State in 2019) The reality for many is
part time jobs are one of the first to reopen and by working 1 day a week they are
disqualified from ANY of the federal funds that were supposed to be a lifeline. As
futile as it feels to write this knowing that without many elected politicians being
willing to fight this fight on our behalf many continue to suffer in silence. While
other groups with lobbyists, lawyers or other organizations working on their behalf
jump to the front of the focus.
At every update by Labor Secretary Julie Su and many other local politicians they
simply say that the State of California does not have the authority to make these
changes. They must come from the Federal Government so we continue to be at the
mercy of our elected officials to make change. There are literally millions contrib-
uting to social media platforms, desperate for solutions and help as far too many
across this nation say they are aware of the issue but do nothing more. There are
many executive orders for other groups that have been resolved on a state level that
I question if the reason this change is not being addressed runs deeper.
A simple fix . . . allow ALL income no matter how it is taxed to be considered when
evaluating a person’s qualifications for the CARES Act assistance currently being
managed by existing, antiquated and seriously underperforming unemployment sys-
tems.
Thank you for your time,
Cheyenne Salés
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TEXAS COUNCIL ON FAMILY VIOLENCE
P.O. Box 163865
Austin, TX 78716
800–525–1978
tcfv.org
June 23, 2020
Hon. Charles E. Grassley, Hon. Ron Wyden
Chairman Ranking Member
U.S. Senate U.S. Senate
Committee on Finance Committee on Finance
219 Dirksen Senate Office Building 219 Dirksen Senate Office Building
Washington, DC 20510 Washington, DC 20510
Hon. John Cornyn
U.S. Senate
Committee on Finance
219 Dirksen Senate Office Building
Washington, DC 20510
Re: Submission for Hearing Record
Dear Chairman Grassley, Ranking Member Wyden, and Senator Cornyn:
I write regarding the hearing held by the Senate Finance Committee earlier this
month: ‘‘Unemployment Insurance During COVID–19: The CARES Act and the Role
of Unemployment Insurance During the Pandemic.’’
With over 1,300 members, the Texas Council on Family Violence is the statewide
coalition of family violence service providers and allied programs working to pro-
mote safe and healthy relationships by supporting service providers, facilitating
strategic prevention efforts, and creating opportunities for freedom from family vio-
lence. While promoting safe and healthy relationships, TCFV advocates for the well-
being and security of all Texans, those from historically marginalized populations
and those facing barriers to safety such as poverty, homelessness and housing insta-
bility—often prompted or exacerbated by job loss.
The Texas State Legislature initially created access to unemployment insurance for
survivors of family violence and stalking in 2003. Texas has since expanded upon
this access for survivors and included access to UI for victims of sexual violence.
While the original provisions and earlier expansions were hard fought and took sev-
eral Legislative Sessions to accomplish, the last expansion of access to survivors of
sexual assault in 2013 passed without controversy. The Texas Workforce Commis-
sion has reported relatively low numbers of utilization of UI by survivors applying
under this provision.
With respect to receipt of unemployment benefits by survivors during the pandemic,
we are heartened that Congress has provided this access to survivors nationwide.
The stay at home orders, some of which are only now being lifted, mean that some
survivors (unless they were ‘‘essential workers’’) have been forced to co-locate
around the clock with abusive intimate partners, and that some will have to leave
their jobs and their homes in order to secure safety for themselves and their family
members. Pandemic Unemployment Assistance (PUA) has proven incredibly helpful
to some survivor workers who would not have qualified under the requirements of
the regular unemployment insurance program, primarily because they have not
worked long enough. As is the case for most states during the pandemic, however,
the unprecedented number of unemployment applications has meant a very long
wait for benefits approval for most, including survivor workers- especially those who
were turned down for regular unemployment insurance, but later found eligible for
PUA.
Last week, TCFV served as faculty for an Office on Violence against Women (OVW)
supported webinar for lawyers and advocates on COVID–19 and unemployment in-
surance access for survivors of domestic and sexual violence. Nearly 400 lawyers
and advocates signed up to attend (with Texans comprising 10% of those interested),
which testifies to both the interest in this subject area and the need for the Con-
gress to do more.
In closing, we understand that the Senate is likely to take up the issue of extending
unemployment insurance in the next several months. Should you have the oppor-
tunity to strengthen survivors’ access to unemployment insurance benefits including
provisions that would include survivors on the ‘‘good cause’’ lists in all states, ex-
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192
tending PUA for those not eligible for general unemployment, and providing needed
training to states’ labor department staff, we strongly encourage you to do so.
We would be pleased to respond to any questions, and request that this letter be
placed in the hearing record.
Thank you,
Linda X. Phan
Director of Public Policy
Texas Council on Family Violence
cc:
Hon. Lindsey Graham Hon. Dianne Feinstein
Chairman Ranking Member
U.S. Senate U.S. Senate
Committee on the Judiciary Committee on the Judiciary
224 Dirksen Senate Office Building 224 Dirksen Senate Office Building
Washington, DC 20510 Washington, DC 20510
Æ
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