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Labor’s Scalia Won’t Commit to Extending Virus Jobless Aid (2)

May 11, 2020, 6:28 PM; Updated: May 11, 2020, 10:46 PM

The federal government’s top labor official warned that extending more generous pandemic-related unemployment benefits for workers beyond a July 31 expiration date would require close scrutiny to determine the proper approach.

If the next phase of Covid-19 relief legislation were to address the $600 weekly unemployment boost states are currently providing, it would “warrant a very careful look ... at whether continuing that particular method is the right way to go,” Labor Secretary Eugene Scalia said during a Consumer Technology Association webinar Monday.

The secretary’s remarks come as Congress and the Trump administration are informally discussing another round of stimulus relief. Some Democratic lawmakers are calling for the $600 supplement provided in the $2.2 trillion CARES Act to be extended through the end of 2020. Republicans are voicing concerns that the current system disincentivizes workers from returning to their jobs.

When CTA President Gary Shapiro asked if the more generous payments will be extended, Scalia replied, “Let’s see where we are. I think that the program that we adopted where there’s a flat payment amount regardless of prior income was one we were forced into a bit because of limitations of the state computer systems.”

‘Bad Decision’

Shapiro pressed Scalia on the growing concern among business leaders that workers who earn more in unemployment benefits than they did in their prior jobs will simply not go back to work.

“I certainly am not unaware of the moral hazard, as you put it, Gary, that concerns some people, but do remember that this program does expire in July, and I think it’s a bad decision by a worker to not come back to a job,” because they’ll get their enhanced unemployment benefits for only a few more weeks, Scalia said.

The secretary noted the department is shifting to support states as they reopen their economies after focusing earlier efforts on helping them respond to a historic surge in unemployment claims by updating antiquated software systems. The more recent effort entails getting workers off of unemployment compensation when they have the ability to return to their jobs, he said.

Congress recently authorized $26 million for the DOL Office of Inspector General to investigate abuses of the unemployment insurance system.

“We’ve certainly talked to the inspector general about abuses that may occur with respect to people who” are declining to return to work when offered opportunities, Scalia said.

In addition to probing the unemployment insurance process, the DOL’s internal watchdog is reviewing a range of other ways the department is responding to Covid-19, including audits of its occupational safety, mine safety, and wage-hour branches.

(Updated with additional information about inspector general audits in 10th paragraph. A previous version of this story corrected a quote in the 6th paragraph. )

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

To contact the editors responsible for this story: Melissa B. Robinson at mrobinson@bloomberglaw.com; John Lauinger at jlauinger@bloomberglaw.com

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