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Keep Unemployment Boost at Flat Number, States Advise Congress

July 24, 2020, 8:24 PM

State workforce agencies have advised Congress not to switch enhanced unemployment benefits to a formula based on workers’ past wages, warning that use of an individualized model could require months of preparation time.

The nonpartisan trade group representing all state unemployment offices estimated it would take states four to 12 weeks or more to reprogram their systems if Congress decides to require that expanded benefits be calculated according to each claimants’ prior wage records, according to a letter to lawmakers.

The National Association of State Workforce Agencies wrote to lawmakers Thursday as Congress tries to broker a solution before a $600 weekly supplement in all unemployment checks expires this weekend.

“Maintaining a flat amount without a calculation is the preference of NASWA members,” the group said in the letter, which was designed to assist policymakers. The House Ways and Means Committee received the letter and shared it with Bloomberg Law.

Debate over whether and how to give workers additional money to pad their unemployment checks during the pandemic is one of the main partisan fault lines as Congress moves toward formal negotiations over another major stimulus bill.

President Donald Trump and his chief stimulus negotiator, Treasury Secretary Steven Mnuchin, said Thursday they’re looking to revamp the unemployment boost so that workers receive about 70% of their prior earnings per week.

But lawmakers from both parties have expressed concern that states would struggle to handle the administrative burden of paying benefits based on each worker’s prior wages—documentation that isn’t readily available for the millions of workers drawing weekly checks through the new Pandemic Unemployment Assistance program for independent contractors and others who wouldn’t normally qualify for regular benefits.

“If such a policy solution is chosen, the effective date should be set well in the future, with a continuation of a flat amount until that future effective date,” the letter added.

Delays marred timely processing of unemployment benefits in many states during the earlier part of the pandemic, and state agencies across the country continue to cope with a crushing workload as between 20 million and 30 million people rely on jobless aid.

The group’s advice is consistent with messaging from the U.S. Department of Labor, which acknowledged in recent outreach to states that a wage-replacement approach would entail “heavy lifts.” The department also told the House Ways and Means Committee in May that it “strongly opposes” a varying formula to replace the $600 supplement.

A media representative for the National Association of State Workforce Agencies didn’t immediately respond to a request for comment.

To contact the reporter on this story: Ben Penn in Washington at bpenn@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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