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DOL Urged to Clarify When Work Refusal Warrants Jobless-Aid Cut

June 12, 2020, 5:07 PM

A testy exchange on Capitol Hill highlighted an arcane but increasingly relevant legal question: Can the federal government advise states to keep paying unemployment insurance benefits to workers who decline job offers they believe to be unsafe?

Labor Secretary Eugene Scalia told the Senate Finance Committee this week it’s up to states to define “suitable work” and the factors that, if satisfied by the employer, would disqualify a worker from unemployment compensation if they refuse the job.

The fact that states have primary authority to adopt laws that define suitable work isn’t in dispute. But a group of Democratic senators and worker advocates counter that provisions of federal unemployment insurance law grant the Labor Department leeway to determine when workers may remain eligible for jobless benefits if they refuse to work due to safety concerns.

As some states continue to mull how to guide employers and workers on the matter, DOL is facing increased calls to provide more clarity, such as by informing states that an offer isn’t suitable if an employer hasn’t complied with the Centers for Disease Control and Prevention’s Covid-19 workplace guidelines. The issue is taking on heightened importance as more states and localities relax quarantine orders, businesses implement return-to-work plans, and some states experience a resurgence of virus infections.

More specific advice is particularly needed, proponents say, to balance against the department’s recent guidance that “strongly encouraged” states to “request employers to provide information when workers refuse to return to their jobs"—part of an effort to police fraudulent claims.

“It’s creating serious confusion on the part of workers, employers and, I would add, on the part of states,” said Maurice Emsellem, a program director for the National Employment Law Project, which advocates for low-wage workers. By instead encouraging states to discontinue benefits when workers turn down job offers, DOL is “creating more of a problem, confusing the states even more as to what protections need to be in place,” he added. “Without those protections, clearly, a lot of workers are going to feel like, ‘I have to return to work, whether it’s safe or not.’”

While Scalia sparred with Senate Finance ranking member Ron Wyden (D-Ore.) and Sen. Bob Casey (D-Pa.) over the issue during Tuesday’s hearing, he also indicated the department hasn’t foreclosed the possibility of providing more safety-specific guidance for states.

“The Department will continue communicating with Congress on this issue,” a DOL spokeswoman said, adding that the agency expects to provide answers to additional questions raised during the hearing.

States have gone in a variety of directions in the absence of further guidance from DOL. Some, such as Ohio, Missouri, and Iowa, are urging employers to report workers who refuse job offers, so that state officials can stop paying them jobless claims. North Carolina and New Jersey are among those that have issued guidance to explain when the risk of contracting the virus at work is high enough that a worker can refuse an offer and maintain weekly benefits.

Can DOL Take Action?

Wyden and Casey questioned Scalia about a letter they and 20 other Senate Democrats sent to him last month. They argued DOL has the power to issue guidance so workers understand they can remain on regular state unemployment insurance and a new federal jobless program for independent contractors after turning down an offer that they feel is unsafe during the pandemic.

The letter referenced a Federal Unemployment Tax Act provision barring states from denying benefits 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.”

A worker turning down a job when the employer fails to ensure proper protections against Covid-19 exposure would clearly qualify as “conditions…substantially less favorable,” the Democrats wrote.

Further, they pointed to Congress’s establishment of Pandemic Unemployment Assistance for independent contractors, freelancers, and others not traditionally eligible for regular state benefits. The $2.2 trillion CARES Act (Public Law 116-136) said PUA is governed by earlier federal regulations covering the Disaster Unemployment Assistance program. One section of those regulations 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.”

The DOL didn’t respond to the letter, prompting Wyden and Casey to pump Scalia for answers during the hearing.

“The requirement is that it be suitable work—suitable work has to be safe. And so the states are to judge that,” the secretary said in response to a question from Casey.

“I think that, certainly, if a worker has facts telling him or her that the workplace is unsafe because there are unmitigated COVID exposures, we would think that the workers should not have to go back until that workplace is in fact made safe,” Scalia added.

But he stopped short of pledging guidance to build on his statement that “suitable work has to be safe.”

“Secretary Scalia is abdicating his responsibility to help keep workers safe by not providing guidance to states about when workers can turn down jobs in unsafe conditions and continue to receive unemployment benefits,” Wyden said in a statement to Bloomberg Law. “As the virus continues to spread it’s critical that workers and employers know what constitutes safe conditions. Congress will need to take action if the Trump administration does not.”

Doug Holmes, who lobbies for employers on jobless benefits policy and used to direct Ohio’s unemployment compensation division, said the question of whether individuals may refuse a work offer for safety reasons and stay on unemployment insurance is “the responsibility of the states,” unless Congress revises federal law.

“Each state already has a body of case law that addresses this issue in interpretation of the state law and [its] administration,” Holmes, president of UWC–Strategic Services on Unemployment & Workers’ Compensation, said via email. “Generally speaking, if a workplace is determined to be unsafe for employment as a matter of state law, individuals may assert that they are unemployed for good cause. The specific definitions of these terms vary from state to state.”

Dale Ziegler, a former deputy administrator of the DOL’s Office of Unemployment Insurance, also backed Scalia’s testimony.

“Generally, I would agree with the secretary that DOL doesn’t have the authority to define suitable work for all the states,” Ziegler said. “States make their own UI laws and define the eligibility requirements.”

States Fill the Gap

North Carolina’s Division of Employment Security issued a list of seven Covid-19-related reasons that would allow a worker to refuse work and stay on jobless insurance—a model that could serve as a blueprint for other states.

Being unable to get to work because of travel restrictions due to Covid-19 is one factor. Another is if “you reasonably believe there is a valid degree of risk to your health and safety due to a significant risk of exposure or infection to Covid-19 at your employer’s place of business due to a failure of the employer to comply with guidelines as set out by the CDC” or other government authorities.

Proposals pending in several state legislatures also aim to clarify the issue.

In Colorado, a Senate-passed bill now pending in the state House, S.B. 207, would block the state’s labor department from denying unemployment benefits due to a claimant’s refusal to work if they meet one or more criteria related to Covid-19.

The factors include whether the employee has a compromised immune system, making them more susceptible to illness; whether the employee has a child whose school is closed due to the public health emergency or a household member under quarantine; or whether the workplace isn’t complying with local, state, and federal orders related to preventing infections.

Colorado lawmakers saw a need to enact changes to last more than just a few months, as was the case with executive orders and emergency rules issued in immediate response to the pandemic, said state Sen. Chris Hansen, who sponsored the measure.

Similar bills were introduced in the last few weeks and await legislative committee action in Michigan, New Jersey, North Carolina, Ohio, and Pennsylvania.

“While most of us can safely return to work, some people have legitimate safety concerns that should be taken into account,” Pennsylvania state Rep. Josh Kail (R) said in a statement announcing a bill introduction. “No one should have to choose between a paycheck and his or her health.”

To contact the reporters on this story: Ben Penn in Washington at bpenn@bloomberglaw.com; Chris Marr in Atlanta at cmarr@bloomberglaw.com

To contact the editors responsible for this story: John Lauinger at jlauinger@bloomberglaw.com; Jay-Anne B. Casuga at jcasuga@bloomberglaw.com

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